Selling the silver

The ongoing national debate on privatisation has been gaining currency. There are diverse opinions being expressed by all and sundry on the subject. Some views have been clouded simply because they represent partisan political positions. Those who are noted economists or lay some claim to having economic training, have all weighed in on the debate.

It is be expected that Government, the private sector and the trade union movement will voice their positions on the subject, as these opinions at the end of the day will shape the course of action that is likely to be pursued.

The national debate on this subject is of high importance, as it serves to galvanise a body of opinions, which can help the decision makers in their deliberations. Since the intention of a national debate is to serve the useful purpose of canvassing the opinions of the public while at the same time educating the masses, it is expected that the issue would be properly defined.

The debate should therefore be guided by the fact that first and foremost, an understanding of the issue of privatisation is paramount. If this is not the case many in their contributions would stand to be accused of shooting in the dark; or put another way, voicing opinions in pure ignorance.

In evaluating the contributions of some callers to radio talk show programmes, such lack of knowledge is evidently displayed.

What is meant by privatisation? A Google search comes up with a definition of denationalisation or disinvestment; which is, “changing something from state to private ownership or control”. Privatisation refers to a situation where a government decides to transfer control of a government and public owned resource, to the private or business sector, either partially or totally.

What this really means is that privatisation brings about the termination of public programmes and separation of state from various kinds of corporate activities. According to Starr (1988), privatisation is the transfer of public assets to private sector through different means like sale or lease of government land, infrastructure, and other different ventures.

Privatisation may be in the form of delegation of power and deregulation of entry in certain business sectors or activities, which were in the past considered as public monopolies.

While there are compelling arguments for and against privatisation, those who oppose it, would contend that since the profit motive rules supreme, consumers may be required to pay high prices for services, unless government institutes control measures.

There is also the fear that where government is not in a position to exercise a measure of control over private sector businesses, the decisions taken by enterprises could affect those in the public sector. As a consequence of the opening of the door for businesses to regulate themselves, it means that the opportunity presents itself for unacceptable business practices to take place.

Whilst it is important to know what privatisation is all about and the arguments for and against it, it is equally important to know why it is introduced in the first instance. Four reasons have been identified. They are accounting, economic, political and social reasons. It is viewed that governments always move to consider privatisation as an option in times of economic crisis.

It is usually suggested that a government moves to privatise state enterprises because it is conceived that the private sector can deliver quality products and services more efficiently and at a much lower cost to the taxpayers. It is debatable whether this is a myth rather than a fact.

In initiating a discussion on privatisation, the presumption is that the government is moving to sell off state assets. This however, may not be the case, given that the approach to privatisation may take the form of outsourcing, or the entering into public-private sector partnerships.

* Dennis De Peiza is a Labour Management Consultant with Regional Management Services Inc.

Visit our Website: www.regionalmanagementservicesinc

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