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Privatizing Public Goods- Our Lives Up for Sale

Privatizing Public Goods- Our Lives Up for Sale

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Published by Yanuar Nugroho

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Categories:Types, Research
Published by: Yanuar Nugroho on Aug 01, 2008
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06/16/2009

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THE JAKARTA POST – Opinion & Editorial, Monday, 15 July 2002
Privatizing public goods: Our lives up for sale
Yanuar Nugroho
Researcher, General Secretary,Uni Sosial Demokrat, Jakarta,yanuar-n@unisosdem.org Beware. In the coming years, we in Indonesia may have to pay more not only for our drinkingwater, but also for bathing and watering flowers at home. We may also have to pay for permissionto dig a well in our backyards.Worse, farmers and villagers may no longer be able to access water from rivers or springs, forcorporations will already have been given the right to access all water resources.And as marine resources management would be privatized, hiding behind the authorities toprotect the area, fishermen will be in danger of being wiped out by the corporations away from theopen space where they usually fish.Are these worries real? They seem to be. And most probably there are more examples.The bill on water resources has already reached the legislature, to be ratified by the end of thisyear. Other bills are lining up -- forest management, mining, marine resources, etc. They involvethe plans to implement one of the conditions imposed in the Letter of Intent (LoI) involving theInternational Monetary Fund: Privatization. And it has gone beyond what we may think:Privatizing of "public goods".Instead of fighting for authority in natural resources management, the government seems to haveno other choice but to follow what the IMF prescribes. Take Presidential Decree No. 96/2000. Itstates that share-ownership for any companies working in the water sector can make up 95percent of their total share. Such a commitment, according to research by the
Indonesian Forumon Globalization
this year, clearly sabotages the authorities in charge of managing waterresources.Similar to the dispute around the issue of selling the permission to utilize free-frequency 2.4 GHzfor wireless data communication (in contrast to the phone lines, who owns frequencies anyway?),the case in water privatization seems quite subtle. But if it succeeds, the next in line for sale mightbe air, or other public goods which we would never have imagined before. What is behind all ofthis?According to a recent book by Keith Bezanson, the notion of "public goods" has recently assumedcenter stage in the international agenda of policy makers for two reasons. First, political andsocial pressure is mounting for the financing of a wide range of new initiatives in the name ofpublic goods. Second, there is much disagreement on the value and potential of an internationalpublic goods approach in addressing global concerns.This has raised a number of key questions. The most important one is the conceptual frameworkthat integrates the key factors affecting the definition, delivery and consumption of public goods.Although the bright side of it might be acceptable -- potential payoffs, particularly in terms of
 
better and more effective policies to address common concerns -- on the other side, the lack ofclarity could lead to misguided policies and involve high opportunity costs.We have to be very aware; it is not possible to escape values, preferences, interests,asymmetrical knowledge and power relations in defining "public goods" and in arranging for theirprovision.This is the point where the problem becomes very complex, when the notion of public goods isthen related to resources available in the developing countries. These are the countries leftbehind and trapped in serious foreign debt. Most are implementing the IMF's ambivalentprescriptions by imposing the "Structural Adjustment Programs" (SAP).Under this prescription, financial liberalization and open market are extended and reinforced andthe problem of privatization of public goods begins. What is the argument? Pushing exports toearn foreign exchange -- prioritized over basic necessities, food production and other goods fordomestic use -- to pay the debt.And for doing so, economies in the Third World have been being deflated; the governments arewithdrawn not only from public enterprise but also from compassionate support of the basichealth and welfare of the most vulnerable, according to the 1999
Economic Justice Report, 1999 
.The SAP may not have put the suffering Third World countries back on a steady economic keel,but they have certainly helped undermine democracy in those nations.In 1999 Joseph Stiglitz wrote that there are real risks associated with delegating excessive powerto international agencies. Such institutions can become an interest group, concerned withmaintaining its position and advancing its power.He adds, that if we believe in a democratic process, countries must make decisions forthemselves; economic advisors should only advise them of prevailing views.Indeed, SAPs really only make sense when seen through the lens of economic globalization. Thisis how we might be able to understand the whole logic behind privatizing public goods.They are an integral part of the free market orthodoxy that aims to give free rein to privatecorporations to trade, invest and control all resources, including the natural ones. By doing so,they move capital around the globe with a minimum amount of government interference; as thedebt loan on all governments, particularly those of the Third World, has crippled their capacity tolook after their citizens, let alone to protect and manage natural resources and public goods frombeing privatized.The needs of capital are not always the same as the needs of society, says writer Noreena Hertz,but this is the age of silent take-over, in which government power and people's authority havebeen wiped out by the potent control of corporations.It seems that we are in an era where all of us are being indoctrinated in liberalized trade andinvestment, heartily endorsed by the world's biggest banks and corporations. A deregulated,privatized, corporate-led free market is being touted as the answer to humanity's problems. Theproof, though, is not so easily found.Further, is there any possibility of customer politics of the stick-and-carrot type to enticecorporations and business community to redefine their roles in society? Can governments, while

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