OPINION & EDITORIAL - The Jakarta Post, 24 September 2003
Freeing up services: Delayed, not canceled
Director,The Business Watch Indonesia, Surakarta,firstname.lastname@example.org Rejoicing and lamentation greeted the collapse of the world trade talks in Cancun last week.Those who lamented represented the developed countries, which have had their pursuit ofprofit slowed down. Those celebrating included representatives of developing countries,which prematurely thought that it was a victory of the poor world against large corporations.The deadlock at the fifth Ministerial Meeting of the World Trade Organization (WTO) may be just the start of an attack on the brute force in our daily lives exercised by the power ofbusiness. One sector is services.When liberalization of services throughout the world was being discussed in Cancun underthe session on the General Agreement on Trade in Services (GATS) the working committeeat our legislature was working around the clock to finish deliberations on the water resourcesbill, which allows private companies to control water resources for commercial purposes,despite mounting protests from non-governmental organizations. The special committee hadasked for a plenary House session to pass the bill on Sept. 23.The involvement of the World Bank is crucial to the progress of the bill. Minister ofSettlements and Regional Infrastructure Soenarno confirmed on Friday speculation that thewater resource bill had something to do with the Water Resources Sector Adjustment Loan(WATSAL), a US$300 loan from the World Bank. Under this scheme, the bank disburses theloan in three stages: The first $50 million was disbursed in June 1999 and the seconddisbursement, amounting to $100 million, was made at the end of 2001.The remaining $150 million will be disbursed once Indonesia completes its water reforminitiative, which includes the enforcement of a water resource law that allows for privatizationof the water sector.The issues of water liberalization and privatization are only part of liberalization andprivatization of services in general. The draft of the Cancun Ministerial Text on services said,"We reaffirm that the negotiations shall aim to achieve progressively higher levels ofliberalization with no a priori exclusion of any service sector; and in accordance with GATSprovisions, there shall be due respect for the right of Members to regulate and to introducenew regulations in pursuance of national policy objectives." The draft remained withoutsignificant change until the end of the conference.What does this imply?Water, electricity, health, education, telecommunications, rubbish collection, transport policy,banks, investment, insurance, radio, e-mail, setting up a massage parlor, tourism, land --these examples all fall within the category of service, more particularly, GATS. The market?The world's population of 6 billion.Global, free trade, not only in goods but also in services seems to be a vast modern utopianproject. It aims at bringing all countries into the realms of industrial nations. Never before hassuch an ambitious exercise been attempted. Many poor countries have not been able toafford adequate investment in their service sectors, such that multinational corporations, it issaid, will help them with both capital and expertise.