Widespread privatisation marginalises the poor: UN report

Widespread privatisation of public goods in many societies is systematically eliminating human rights protections and further marginalising those living in poverty, according to a new report, released by the United Nations (UN).

The 25-page report by the UN is eye-opening in the light of Indian government think-tank Niti Aayog releasing Guidelines for Public-Private Partnerships (PPPs) for tackling Non-Communicable Diseases (NCDs) in government-run district hospitals. Niti Aayog's move paves the way for legitimising PPPs wherein private entities that run healthcare services in government leased land can charge 'user fee,' from the patients.

The UN report criticises the 'user fee,' model. It says, “Infrastructure projects will be most attractive to private providers where significant user fees can be charged and construction costs are relatively low. But the poor are badly placed to pay, cannot afford to use many services, and often live in distant or otherwise under serviced areas. Water, sanitation, electricity, roads, transport, education, health care, social services and financial services are far less likely to be provided adequately or at good quality levels to the poor.”

By UN's own admission, the World Bank, the International Monetary Fund, and even the UN itself have aggressively promoted widespread privatisation of basic services, without regard to the human rights implications or the consequences for the poor. Philip Alston, the UN Special Rapporteur submitted his report to the UN General Assembly and said, “Privatising the provision of criminal justice, social protection, prisons, education, basic healthcare and other essential public goods cannot be done at the expense of throwing rights protections out of the window.”

The report says that currently the World Bank's Private Participation in Infrastructure Database tracks projects in 139 low and middle-income countries in energy (electricity and gas), transport (airports, railways and roads), telecommunications, water and sewerage sectors and lists 7023 projects which are management or lease contracts, concessions, green field projects and divestitures representing $1758 billion in total investment.

Further, it says, in a 10-year review of World Bank supported public-private partnerships, it was concluded that the projects were “largely successful in achieving their development outcomes, but data are scarce on the effects on the poor”, as well as on access and service delivery. In other words, business performance is carefully tracked, but rights-related or poverty-related impact studies are rare.

“There is a real risk that the waves of privatization experiences to date will soon be followed by a veritable tsunami,” it warns.

Alston in his analysis of UN's views state that there is an official push and emphasis on public-private partnerships (PPPs) to fulfil Sustainable Development Goals (SDGs) by the UN, even as UN itself admits that its expertise on PPPs within the organisation is relatively limited and scattered. Another group, Business and Sustainable Development Commission said that SDGs are a business opportunity while stating that poverty, inequality and lack of financial access should be turned into new market opportunities for smart, progressive, profit-oriented companies.

Also a review of ten most recent staff reports dealing with countries in Africa reveals that International Monetary Fund (IMF) was actively advocating privatisation in six cases, while in others governments themselves noted their commitment to PPPs, states Alston's report.

The report quotes a study by the National Audit Office of the UK which concluded that private finance initiative model had proved to be more expensive and less efficient in providing hospitals, schools and other public infrastructure than public financing.

It says that cost of services like cleaning, in London hospitals is higher under private finance initiative contracts. Also costs of a privately financed hospital were 70 per cent higher than public sector hospital.

Another study conducted by the European Court of Auditors of the European Union, examined 12 PPPs in France, Greece, Ireland and Spain in road transport and IT and concluded that there were widespread shortcomings and limited benefits.

“Neo-liberal economic policies are aimed at shrinking the role of the State, especially through privatisation. This agenda has been remarkably successful in recent years and continues to be promoted aggressively by the World Bank, IMF, the UN and the private sector. The logic of privatisation assumes no necessary limits as to what can be privatised, and public goods ranging from social protection and welfare services, to schools, pension systems, parks and libraries, and policing, criminal justice and the military sector, have all been targeted,” states Alston.

The report recommends that while privatisation in theory is neither good nor bad, the ways in which it has most often occurred in recent decades and the ideological motivations driving much of it need to be examined.

“Insist that appropriate standards be set by public and private actors involved with privatisation to ensure that data on human rights impacts are collected and published,” it recommends, while appealing for stronger international procedures and mechanisms to be put in place.

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