The privatization question
“Privatization is the process of transferring ownership of specified property or business operations from a government organization to a privately owned entity, as well as the transition of ownership from a publicly traded, or owned, company to a privately owned company.”
As mundane a definition as it appears, this concept fosters feverish debate between policy makers and average citizens. Therefore, it was no surprise when the issue of privatization became a major point of contention in the last general election, and the issue on which the Opposition Barbados Labour Party (BLP) is widely considered to have lost the opportunity to run the country.
The perception of the role of Government is an important consideration in discourse about privatization. It is safe to say that a large percentage of Barbadians believe that government should be the provider of services which include water, sanitation and transportation in keeping with its historical track record of doing exactly that.
The Barbadian state throughout the years has managed to provide a bounty of services for its populace, many of which in other parts of the region and the world are defined by private capitalist interests.
However, now that Barbados is not on as sound an economic footing as it once was, it has become harder to achieve this. The once not faultless but ever churning wheels have become less steady.
Two weeks ago, the Sanitation Service Authority (SSA) engaged the services of private waste haulers to assist in the collection of garbage across the island following months, if not more, of cries from citizens about the lack of consistent collection.
The National Union of Public Workers (NUPW), which represents SSA workers, has articulated its displeasure over the arrangement. According to the press, “The NUPW believes this is part of a wider privatization plot and has warned that it will not sit idly by and allow the SSA to be placed in private hands.”
The NUPW is most interested in the workers maintaining their jobs and existing contractual terms. As such, the union’s call for immediate engagement with Government and the SSA on these and related issues is reasonable and should be responded to with haste.
As of now, I believe the Government when they say that the new public-private arrangement is not a privatization plan but a stop gap. But clearly as a result of how Government has engaged with trade unions of late, they have reasons to be skeptical, if not entirely doubtful, of Government’s stated plan.
Let’s be clear, if the Government wishes to engage in privatizing the SSA or any other entity, they must be forthright and transparent about those intentions. The example of private sector input in the SSA begs the broader question of what other entities could go the route of privatization.
The benefits of privatization are well documented and much celebrated. “According to privatization’s supporters, this shift from public to private management is so profound that it will produce a panoply of significant improvements: boosting the efficiency and quality of remaining government activities, reducing taxes, and shrinking the size of government. In the functions that are privatized, they argue, the profit-seeking behavior of new, private sector managers will undoubtedly lead to cost cutting and greater attention to customer satisfaction.”
Privatization is not the plaster for all sores economic and otherwise. The concept is not without its challenges and these might be particularly acute for a country like ours. Perhaps it is that privatization is not the route to pursue but rather public private partnerships in keeping with the SSA example where private entities, for financial gain, fill a gap for a resource poor government.
If for no other reason than relieving Government of the heavy financial burden, the Transport Board may seem a good candidate for going the private route, given the heavy costs of maintaining its fleet of buses and providing a bus service which, at its best, is not as reliable as it needs to be.
In relation to the NUPW’s suspicion that Government is minded to privatize sanitation services, there exists a number of considerations that should be made before embarking on such a process. Additionally, the process in the interest of efficiency should not be carried out by covert operations during the night.
The central considerations in privatizing government entities include the question of whether the entity would operate more efficiently under private ownership. The answer to this question is contained in an in-depth review of the operation in question.
When the sale is approved by Cabinet, there needs to be an open and transparent bidding process meeting the rigours of sound competition standards. When the sale is completed, there should be some assessment as to whether the sale has been beneficial or not.
Privatization, like all other policy options, deserve rigorous consideration. While it should not be considered the magic bullet, if we opt to go this route, we should be open and honest about those intentions and any subsequent dealings.
Our survival depends on it.
(Andwele Boyce is a young communicator who is passionate about politics and popular culture. He holds a Master’s degree in international trade policy and is currently pursuing a law degree)