Contents

Contents..................................................................................................................... 1 Is Public-Private Partnership (PPP) neocolonialism or a pattern of cooperation?...........2 PUBLIC-PRIVATE PARTNERSHIPS..................................................................................2 Introduction................................................................................................................. 2 Bibliography..............................................................................................................13

Is Public-Private Partnership (PPP) neocolonialism or a pattern of cooperation?

PUBLIC-PRIVATE PARTNERSHIPS
Outline This research project aimed at grappling with the question of public-private partnership as a model of development cooperation with special emphasis on the Global South- Africa in particular. Thus the project interrogated the mechanisms employed in public-private fit, as well as engaged theoretical significance of PPP. In a nutshell, the work set off with an introduction hence looking at the foundations of PPP. Other areas dealt with include the philosophy and rationale of PPP, theoretical basis of PPP, PPP and foreign aid in Africa, two case studies of PPP in Africa (PEPFAR and Eco-tourism concession in Kruger National Park), advantages and disadvantages of PPP, neocolonial aspects of PPP, and lastly the work drew conclusions.

Introduction Public-Private Partnership is an institutional relationship between the state (government) and the private sector (profit or not-for profit private firms). Here, different public and private actors jointly participate in defining the objectives, the methods and the implementation of an agreement of cooperation (Jutting, 1999). This scheme is often referred to as PPP or P3. Such partnerships are characterized by the sharing of investment, risk, responsibility and reward between the partners. While some examples of P3s go back decades or more, there can be little doubt that interest grew rapidly in the 1990s. The United Kingdom particularly embraced what were called "private finance initiatives" (PFIs) to get private participation in the provision of public services beginning about 1992. Initial British PFIs were concentrated in the transportation sector, but more recently they have been used in a variety of areas, including roads, hospitals, and schools (Bettignies & Ross, 2004). Over the past 25 years, PPC has also become an important part of local economic
2

development policy. This change is highlighted in the reinventing government movement that gained momentum in the 1990s (Savitch, 1998). As governments around the world struggle to provide more and better services to their citizens on limited budgets, organizational innovation has come to the delivery of public services. This search for new methods for the production and delivery of public services has given us new concepts (or at least new labels) such as the more general "alternative service delivery" (ASD), and the more specific "public private partnerships" (PPPs or P3s). ASD refers to the full set of alternative arrangements that can supply goods and services that would otherwise have been provided directly by public enterprises alone. This will include P3s, but also contracting-out of services and outright privatization. The effort to find better ways to produce government services is not mere nibbling around the edges of government - to some it represents a sea change in the very nature of government; it has even been referred to as "reinventing government" (Bettignies & Ross, 2004). While holding out the promise of a more efficient allocation of society's resources and a better "value for money" for taxpayers, P3s are not without their critics. Public sector unions are particularly opposed to what they see as attempts by governments to shift their work to private sector firms paying lower wages and offering an inferior quality of service. And there is no disputing the fact that some P3s have not worked out as projected by the partners. In their examination of P3s, which included reviews of a number of specific projects, Boase (2000) and Daniels and Trebilcock (1996) recognize both the potential benefits and costs of P3s. The costs they cite include lack of transparency and accountability, and the potentially serious problems that can arise when contracts are not well-designed.

Philosophy and rationale behind PPP The inability of the government to provide services to its citizens has often left a gap. Hence, private sectors saw the gap and capitalized on it by negotiating their way to cater for the inadequacies hence improving the basic capabilities of the citizens (Appiah-Kubi, 2001). The government thus needs a collaborative approach with the private sector in addressing the requirements of essential services e.g. health and education (Ghosh, 2008). Theoretical underpinnings of PPP The utility of theories is seen in their description and explanation of the public-private fit, prescription and policy advice, as well as predictions on empirical generalization i.e. that certain relationships will hold. In this respect, liberal, and in particular, neoliberal institutionalism will be engaged succinctly. According to Wong, Ruparel, and Mwanakatwe (2008), in a business environment, public-private interface presents two crucial aspects. The first aspect deals with the quality regulation of the activities of the private entities. Second is the quality and significance of collaboration and coordination between public and private entities in a bid to improve economic growth. These two aspects fall in the neoliberal institutionalism view of conditional cooperation in the Prisoners Dilemma (Grieco, 2006). In the view of that, issues of compliance, reciprocity, and sanctioning are at the core of cooperation as espoused by neoliberals. Thus, in the public-private interface regulatory agencies, customs and tax revenue agencies, business and land registries and judicial mechanisms are all engrossed into the public-private interface in a cooperation. This brings to the fore some of the inhibitions of cooperation such as hefty costs, risks, and barriers to partnership. As such, costs have a bearing on

the range of opportunities that can accrue profit, whereas risks and uncertainties impact on the nature and types of investments (Grieco, 2006). Additionally, the quality of public-private partnership is contingent to governments supportive role in ensuring growth. This supportive role is in form of retarding the associated barriers, collaboration in the identification of growth opportunities, and provision of public goods and services that are in tandem with the needs of the private sector. As well, to curb cheating, the government has to subscribe to the principle of transparency and accountability, and control corruption so as to overcome the inhibitions of cooperation (Wong, Ruparel, & Mwanakatwe, 2008).

Public-Private Partnership and Foreign Aid in Africa

We commit ourselves to the goal of eradicating poverty in the world, through decisive national actions and international cooperation, as an ethical, social, political and economic imperative of mankind- Copenhagen Declaration, 1995.

The African continent in the post colonial era has been plagued by insurmountable problems such as poverty, civil strife, disease, and other serious challenges. These problems have proved to be an obstacle towards development and thus making the continent dependent on foreign aid. However much of the bilateral and multilateral aid offered has been pegged with stringent conditionality. According to Bond, (2003, p. 330),African states as conceptual states, physical realities and governing units are being challenged by global interests, neoliberal economic policies and profound internal social and physical upheavals. Since the African states are in need of foreign assistance, they are at a disadvantaged position as dependents and thus have no choice but to implement the conditionality. The neoliberal economic policies call for free markets, elimination of government subsidies, deregulation, privatization and increasing the role of the private sector.

Privatization has been controversial given the simple fact that the private sector is geared towards making profits while eliminating the role of the government. PPPs are however believed to be an alternative to full privatization whereby the private companies and governments assume partial responsibility and co-partnership for the delivery of services (Tati, 2005, p. 316). Governments have therefore been more open towards PPPs as they retain some degree of involvement in the provision of public utilities unlike in full privatization. PPPs therefore gained importance with the involvement of the private sector in the provision of public utilities such as health, water and sanitization.

PEPFAR (Presidents Emergency Plan for AIDS Relief)

Health care has been one of the key sectors in which numerous public-private partnerships have evolved. PEPFAR was a $15billion initiative that pledged funds for a five year period to fight AIDS. Initially only twelve countries in Africa were covered: Botswana, Ivory Coast, Ethiopia, Kenya, Mozambique, Namibia, Nigeria, Rwanda, South Africa, Tanzania, Uganda and Zambia. (Joireman, 2006, p.157). The initiative was renewed to cover five more years in 2008. Now the fund covers more countries especially since its renewal in 2008. The PEPFAR initiative embodied a public-private partnership with the combination of resources from the public sector with resources from the private sector to combat the HIV/AIDS pandemic. The US government is working in close relationships with the national governments as well as the private sector in the countries they are funding (AVERT, 2011) There have been critical concerns over the funding of key health sectors such as the fight against HIV/AIDS. One of the concerns is that states will tend to abdicate their role in providing the public

service. This, according to Joireman, (p.159) has led to even further weakening of an initiative designed to provide strong effective public services. It is also crucial to recognize that the United States is also a supporter of economic reforms and programs that promote fee-based health care and primary education. For example in Kenya, it was widely argued that poor people who could not afford healthcare, the disease was more prevalent amongst them. The imposition of fees on basic healthcare has decreased the number of attendees as they simply cannot afford and thus ceases to be a priority. Many argue that access to health is a basic human right (Offiong, 2001, p. 181). With the introduction of private management of health services, health care has become quite expensive. This has had a detrimental impact on the social well-being of the poor. As construed in the development thinking, the main objective of foreign aid as an imperative instrument of international co-operation is to facilitate the transfer of critical development-oriented resources from the developed North to the developing South in a bid to retard underdevelopment in the South. The skeptics of foreign aid are quick to question the effectiveness of foreign aid in poverty reduction. They have highlighted that aid is not only donor driven, but also exhibit hidden interests of the donors. Donors have been accused of conceiving projects, designing them, supervising their implementation, and evaluating them on the basis of preconceived criteria. Instead of responding to the special needs of the South, aid is tailored to cater for the security interest needs of the aid agencies or those of their countries of origin. They attain this by securing markets, promoting exports, and creating an enabling environment for private foreign investment through foreign aid and their neoliberal conditionality. This is hence the entry point of publicprivate interface (Rugumamu & Mutagwaba, 2001).

Merits and Demerits of Public Private Partnership Projects

Advantages:
According to Tetrevova (2006) the advantages of PPP projects include: a. More efficient and higher quality. This is particularly found in the construction and operation of infrastructure where PPP is utilized greatly. The efficiencies of the privatesector ensure that among other things the projected costs are not exceeded and the given deadlines are met. b. Solving the problem of limited disposable sources of the public sector. The capital power of the private sector is sensibly utilized to implemented projects which would not be possible without the partnership. c. More benefits and satisfaction for the citizens are realized and utilized. d. Strengthening the public administration resulting to the shortening of the process of decision-making diminishing the rate of bureaucracy. e. Transferring substantial amount of risks to the private entity while the state securities are not required.

Disadvantages:
Tetrevova (2006) has continued to give disadvantages of public-private partnership projects as follows: a. PPP projects prefer the economic aspects of the project to the social, environment or other aspects. b. Slow preparation of individual PPP projects which takes a bit long(most of the time from 2yrs) if the project is to be of high standards(economic reasons).

c. High demands for ensuring transparent relationships at all the stages for example selecting a partner, defining the terms and the conditions, competence and responsibilities and so on. These demands end up escalating the long-term and complicated character-up contracts. d. Considerable negative financial impacts in the case the partnership has to be repudiated. e. Possible transfer of risks from the private sector to the public sector to the public system e.g. risks of bankruptcy. f. Insufficient experience of the partners, particularly if the public sector while contracting such projects where an informational asymmetry, is likely to operate in favor of the private companies. g. From macro-economic point of view; the long-term character of these projects cause their mandatory expenses to grow and their hidden debts to arise which end up existing for many years which could end up affecting negatively the fighting power of the future governments and burden significantly the future generations.

Neocolonial aspects of PPP

Grappling with this research, we were able to identify a few aspects that point to the fact that public-private partnerships are neocolonial models for fighting poverty and under-development. One peculiar aspect is that in the PPP interface, most governments have come up with draconian legislations on property lease. For example, initially Kenya has a clause that provided for land
9

lease for duration of 999 years. This was later subjected to heavy criticism and the Lands Minister; James Orengo led an onslaught thus the change in the new constitution that provides for 99 years of land lease. Is this really to the advantage of Kenyans? The answer is a resounding No. Ninety nine years represent two generations, based on the current life span report, and therefore, private capital will disenfranchise and disenchant two generations of their indigenous asset (Namunane & Siringi, 2011). By the same token, exclusive minority land ownership by foreigners is a monumental problem for the local population. There have been imprudent designs of political strategies for the rural population due to lack of thorough analysis of economic history. Hence the expropriation of land by foreigners has significantly impacted on the survival of indigenous agricultural production. This is caused by the unequal distribution of land between private freeholders and local landholders under communal system of tenure. As seen in Southern Africa, the differential is identified in the quality of the land-soil fertility (Hendricks, 2001). However, in some instances, the role of the neocolonial state is suspect. Chidzonga holds that, the magnificent array of institutional arrangements that government put in place to facilitate and encourage production in the communal areasimproved road transport,phenomenal expansion in the extension services, assistance with procurement of inputs, improvement of market facilities, and increased access to credit (Chidzonga, 1993). Therefore, the legacy of settler colonialism is evident on the maps of developing countries. Hendricks (2001) further posits that these patterns of cooperation have led to uneven class formation facilitated by neocosmos conversion of local population to wage income earners rather than give them access to the means of production. This political exclusion has direct bearing on African proletarianization.

10

Again, private capital and investments are hugely driven with the desire to minimize costs and risks and at the same time maximize profits. When the private entities close their financial years, the huge profit margins are repatriated back to their countries of origin thus leaving inconsequential amounts in the Global South. However, the overall verdict of public-private partnerships is positive and seen as an avenue to address the slow economic growth of the developing world. They have initiated marvelous housing projects, tolling services, healthcare facilities, and Information Communication and Technology services among others.

Conclusion The growth of PPP in different sub-markets is enormous although the government should draw mechanisms that would protect the citizens from malpractices emanating from PPP. For instance, there should be mechanisms that would cushion people from being forced to shift to expensive private provisions as a result of the failures of the public sector. Again, as seen in the health sector, the interplay between patients interests and maximization of profits points to another red tape. It is reported that in India, private sector involvement in health has been marred by not only suspicious prescriptions and unnecessary prolonged hospital stays for
11

patients, but also doctors ownership of private pharmacy outlets and fee splitting between diagnostic centers and referring doctors (Ghosh, 2008). To standardize PPP regulations and procedures, the Government of Kenya established a 13 member committee in 2005- the Kitolo Committee-which is tasked with setting standards, guidelines, and procedures for any PPP undertaking in Kenya (Kitolo, 2008). Hence, all governments should establish mechanisms for institutionalizing standards and prescriptions thus addressing problems of accountability, unethical practices and conflict of interest (Ghosh, 2008). Based on the above, the government should therefore introduce a third sector and in this case, NonGovernmental Organizations (NGOs). Regardless of all the criticism, Non-governmental Organizations are in a better position to utilize specialist services and employ workers at lower wages as a result of contracts. Their entry into the Public-Private Model can thus ameliorate accessibility, equity, and quality of services especially in rural settings (Ghosh, 2008). Lastly, regardless of the growing critical annotations on PPP, it would be fair to categorically assert that the model has served as an imperative pattern of cooperation that has addressed the inadequacies and development setbacks in developing countries.

12

Bibliography
Appiah-Kubi, K. (2001). State-Owned Enterprises and Privatization in Ghana. Journal of Modern African Studies , 39 (2), 197-213. AVERT. (2011, February 12). PEPFAR and the Global Health Initiative. Retrieved February 26, 2012, from President's Emergency Plan for AIDS Relief (PEPFAR): http://www.avert.org/pepfar.htm#contentTable0 Bettignies, J., & Ross, T. (2004). Economics of Public Private Partnerships. Canadian Public Policy , 30 (2), 135-154. Boase, J. P. (2002). Beyond Government? The Appeal of Public Private Partnership. Canadian Public Administration , 43, 75-92. Bond, G. C. (2003). Globalization, Neoliberalism and Historical Conditionalities. Journal of African American History , 88 (4), 330-338. Chidzonga, M. (1993). The Situation of Women in agriculture in the Communal Areas of Zimbabwe. In R. Mkandawire, & K. Matlosa, Food Policy and Agriculture in Southern Africa (p. 188). Harare: SAPES Books. Farlam, P. (2005). Assessing Public-Private Partnerships in Africa. Pretoria: The South African Institute of International Affairs. Ghosh, M. D. (2008). Public-Private Partnership in Helth Care. In K. V. Ramani, D. Mavalankar, & D. Govil, Strategic Issues and Challenges in Health Management (pp. 43-71). London: Sage. Grieco, J. (2006). Anarchy and the Limits to Cooperation. In P. Williams, D. Goldstein, & J. Shafritz, Classical Readings and Contemporary Debates in International Relations (pp. 379-390). Belmont, CA: Thomson, Wadsworth. Hendricks, F. T. (2001). Questioning the Land Question: Agrarian Transition, Land Tenure, and Rural Development in the Former Settler Colonies of Southern Africa. In A. G. Ahmed, & K. K. Prah, Africa in Transformation: Political and Economic Transformation and Socio-Political Responses in Africa (pp. 33-60). Addis Ababa: Organization for Social Science Research in Eastern and Southern Africa (OSSREA). Joireman, S. F. (2006). HIV/AIDS in Africa. In D. Rothchild, E. J. Keller, D. Rothchild, & E. J. Keller (Eds.), Africa-US Relations: Strategic Encounters (pp. 147-161). Boulder: Lynne Rienner Publisher.

13

Jutting, J. (1999). Public-Private Partnership and Social Protection in Developing Countries: The Case of the Health Sector. Bonn: University of Bonn. Libna, T. (2006, April 03). Theoretical and Practical Aspects of PPP Projects. Retrieved February 25, 2012, from Vadyba Management: http://www.leidykla.vu.lt/fileadmin/Vadyba/12-13/105-110.pdf Kitolo, A. M. (2008, July 23). uneca_ppp-kenyaexpsa.pdf. Retrieved March 05, 2012, from Kenyan Experience on PPPs: http://www.mcli.co.za/mcliweb/events/2008/23jul2008/uneca_ppp-kenyaexpsa.pdf Loveridge, S., & Schaeffer, P. (2002). Toward an Understanding of types of Public Private Cooperation. Public Performance and Management Review , 26 (2), 169-189. Namunane, B., & Siringi, S. (2011, October 3). State seeks to take over land from foreigners. Retrieved March 05, 2012, from Daily Nation: http://www.nation.co.ke/News/State+seek+to+take+over+land+from+foreigners+/-/ 1056/1247562/-/dw90xs/-/index.html Offiong, D. A. (2001). Globalization: Post-Neodependency and Poverty in Africa. Enugu: Fourth Dimension Publishing. Rugumamu, S., & Mutagwaba, B. (2001). Foreign Aid and the Poverty Menace in Tanzania: An Overview of Recent Experiences. In K. K. Prah, & A. G. Ahmed, Africa in Transformation: Political and Economic Transformation and Socio-Political Responses in Africa (pp. 17-31). Addis Ababa: Organization for Social Science Research in Eastern and Southern Africa (OSSREA). Savitch, H. V. (1998). The Ecology of Public Private Partnership: Europe. In J. Pierre, & J. Pierre (Ed.), Partnership in Urban Governance: European and American Experience (pp. 175-185). New York: St. Martins. Tati, G. (2005). Public-Private Partnership and Water Supply Provision in Urban Africa: The Experience of Congo-Brazzaville. Development in Practice , 15 (3/4), 316-324. Wong, M., Ruparel, R., & Mwanakatwe, P. (2008). Enhancing the Business Environment. In R. Utz, Sustaining and Sharing Economic Growth in Tanzania (pp. 207-221). Washington, DC: The World Bank .

14

15