Privatisation: Fighting for Profits vs Fighting for Lives

OneWorld South Asia
28 January 2004

Jo Kuper
(Author is a researcher at War on Want )


Residents of South African townships reconnect their neighbours' electricity under the slogan "Power to the People." In Arequipa, Peru, moves to sell electricity companies bring the mayor out on hunger strike and demonstrators blocking the airport runway. 10 million strike in India in protest against bank privatisation. In Tucuman, Argentina, people refuse to pay for water turned brown under a subsidiary of German giant Vivendi. "The liquid everybody needs… is going private, creating one of the worlds' great business opportunities."

South Korea sees hunger strikers opposing plans to privatise power plants and hospital workers walking out to keep their health-care systems public. These are but a few examples of the growing resistance to privatisation being forced on the developing world by the G8, International Monetary Fund and the World Bank. The recent strengthening of GATS has led to growing fears about the entrenchment and irreversibility of some privatisation processes.

At the heart, water

Water lies at the heart of the issues. In 2002, the UN declared, "The human right to water is indispensable for leading a life in human dignity." In this instance, dignity has little to do with it, like air, water is indispensable for life. In Nelspruit, South Africa, township residents literally pay for air. Biwater's metering system means that you are charged for up to 90 minutes of `air time' while you wait for the water to come out of the tap. Unsurprisingly, people are refusing to pay, they are even angrier in the knowledge that water in white areas is much cheaper.

Apologists for privatisation argue that it is necessary to combat State failings in basic services. Many State-run enterprises do indeed deliver poor services, but often privatisation aggravates rather than relieves poverty and has no better record of delivery. More to the point, restructuring deals are not democratically decided.

Protesting against the proposed sell-off of South Korea's national railways, Trade Union director Lee Sang-youn argues, "It is not acceptable to sell people's property without their permission or agreement." Yet this is what is happening all over the world at the behest of the very institutions touting transparency and good governance as fundamental for democracy. An Indian official describes trying to get information on privatisation deals, "[it's] Like chasing a black cat in a dark room, blindfolded."

The 2003 Human Development Report states, "Countries with decent services before privatisation often continue to do well after." But why fix what isn’t broken? Demonstrating employees of the New Government Electricity Factory in India ask, "We are a profitable company, why privatise?" At a forum against potential restructuring, A Costa Rican doctor angrily states, "We have one of the best public health systems in Latin America."

Until recently, the potential profits of basic service industry were openly flaunted by big business. In response to the world's water crisis, chemical giant Monsanto happily declared, "In this area [water] we will be well positioned to profit." Meanwhile, Fortune magazine was delighted that, "The liquid everybody needs… is going private, creating one of the worlds' great business opportunities."

Running Bechtel, but no running water

However, such PR disasters and anti-privatisation successes as the 2000 Cochabamba water wars in Bolivia, which sent Bechtel running and the ousting of Severn Trent in Trinidad, have meant that water profiteers are treading far more carefully. The Kyoto water conference saw such vocal protest to privatisation rhetoric that in a remarkable volte-face, Thames Water declared, "It is wrong in principle and counter-productive in practice for public bodies at any level of government to be forced to outsource public services to private companies."

Of course, Vivendi, of whom Thames Water is a subsidiary, still operate in the developing world. But, to scare a multinational company so much represents a great triumph for the global backlash.

The record of electricity privatisation is as appalling as of water, and resistance is as fierce. In the Philippines, hundreds of families living in Caloocan City participated in a noise barrage and power off. South Korea has seen 5-week stoppages by the Electric Power Industry Union and hunger strikes. In South Africa, 'Operation Khanysia!' made illegal reconnections. Nicaraguan community groups are fighting to make illegal the practice of Spanish multinational Unión Fenosa imposing surcharges on unmetered electricity.

In response to growing opposition, a common tactic employed by repressive governments is suspension of civil rights. In China, a police-state crackdown of arbitrary arrests and detention of 'political dissidents' aims to intimidate protesting workers and farmers. Horrors such as the shooting in the face of a 17-year old protestor at Cochabamba are rife.

That protest continues to thrive in tyrannical regimes is testament to the severity of the issues. In Colombia, the government decision to dissolve Telecom led to nationwide dissent. Despite riot police mobilising, Telecom offices being shut down and violent suppression of demonstrations in big cities, the protests continued.

As the issues deepen, so to do the roots of discontent. Doctors in El Salvador went on strike late last year over the threatened privatisation of health services in the country. South Africa's Anti-Privatisation Forum (APF), a War on Want project partner, and the recently formed RedVIDA in San Salvador both consist of labour unions, environmental campaigners, consumer advocates and community organisations, both signifiers of how far reaching the issues have become.

The successes of Community Based Organisations where local communities become responsible for their own supplies across the South in countries as different as Brazil, Bangladesh, Ghana and Bolivia have been largely ignored by the G8 and the BWI's, but not by activists in the South themselves.

In Tumbes, Peru, the National Federation of Water Workers, FENTAP has made clear that it will not back down. "Although the government intends to privatise, the workers in the sector will continue to build modern and efficient companies with social responsibility." As one Ghanaian water activist puts it, "They are fighting for their profits, we are fighting for our lives."

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