Analysis on PRIVATIZATION
The lack and absence of public goods and services are exacerbating the burden of the Filipino people. It adds to the misery of day-to-day life considering low levels of wages and salaries and the unemployment and underemployment of about 30% of the labor force in the Philippines.
The Fidel V. Ramos administration is hiding behind "good government statistics" to cover-up the failure of government to protect the interests of the Filipino people. Instead of addressing the ills of the bureaucracy, President Ramos is implementing the policy of privatization. This is the transfer of the delivery of public services to the initiative and control of the private sector.
President Ramos is promoting the privatization as an essential element of the "Philippines 2000" which will lead the country towards "modernization and industrialization" for the benefit of the people. It is the set of laws of private capital and management or market forces that will spur the "efficiency" in the delivery of public goods and services.
This paper intends to clarify the following points regarding privatization as one main development policy of the Ramos government:
- the context that brought about the policy of privatization in order to define its real intent;
- how and who will benefit from privatization; and
-the effects of privatization to the Filipino people and the government employees.
Privatization is a Policy-dictate by and for Foreign Interests in Collusion with the Ramos Government!
Privatization is a government policy to transfer the assets, agencies, and function of government into the hands and control of the pri vate sector. This is as the sale of the assets such as real estate, infrastructures, facilities, and other resources including the take over of the functions of the privatized instrumentalities. Likewise, through abolition, build-operate-and-transfer (BOT ), merger, and streamlining of agencies, the government relinquishes responsibilities and functions that shall become opportunities for profits by private businesses.
Through the signing of Presidential Decrees 2029 and 2030 by President Ferdinand E. Marc os shortly before the downfall of his dictatorship in 1986, the legal frame for the declaration of privatization as a policy was completed. Immediately upon its take over, the President Cory Aquino administration started its implementation as part of the Structural Adjustment Program (SAP) inked by Aquino and the International Monetary Fund-World Bank (IMF-WB). The SAP specified austerity measures in government spendings to assure them of continued foreign debt payments and the expansion of trade & investment liberalization to ease the worsening crisis of overproduction of monopoly capital which control the IMF-World Bank.
The IMF-World Bank took advantage of the dire need for funds by the Aquino administration who took over an empty national coffers after the excessive corruption by the Marcos dictatorship. In exchange were additional foreign loans from the IMF-World Bank of $310 Millions Economic Recovery Loan (ERL) as additional government's investments in Government Financial Institutions (GFIs) plus $ 200 Millions to revive the Government-Owned and Controlled Corporations (GOCCs).
Aquino signed Proclamation No. 50 to create the Committee on Privatization (COP) and Assets Privatization Trust (APT) to administer the implementation of privatization. From a n original five-year life, the mandates of these agencies have been extended twice by President Ramos. It included the grant of "full authority to fire-and-hire" the existing employees of the privatized agencies to the new owners.
The IMF-World Bank open ly criticized the Aquino government for its dismal performance in meeting the targets of privatization. The delays were due to intense bickering among the politicians and high bureaucrats whose interests are being directly affected.
The Ramos regime prov ed to be a better partner of the IMF-World Bank in seriously pursuing its conditionalities. President Ramos' battlecry of Medium-Term Philippine Development Plan (MTPDP) or Philippines 2000 declared three related and inter-twined policies of liberalization, deregulation, and privatization. The core objective is to consolidate the comprehensive control by foreign monopoly capital of the economy and politics of the country.
Contained in a Letter of Intent (LOI) submitted by President Ramos to the IMF-World Bank immediately upon his assumption as President in 1992, was further reduction of government subsidies to public services. Thus, more agencies including GOCCs involved in the delivery of basic social services and GFIs were lined for privatization. The GFIs and GOCCs are to be sold after their operations were developed through loans from the IMF-World Bank.
Likewise, the approval of the General Agreement on Tariffs and Trades-World Trade Organization (GATT-WTO) by the Ramos regime in 1995 comprehensively opened the country to a complete control by foreign monopoly capital. It was also President Ramos, during the Asia-Pacific Economic Conference (APEC), who pushed for an agenda to hasten the Implementation of liberalization and deregulation in the region despite warning from neighboring Asian nations.
Through their global instrumentalities such GATT-WTO, APEC, IMF-World Bank, and the Asian Development Bank (ADB) which are all controlled by G-7 countries led by US, the concept of globalization or the removal of the remaining barriers for their intensified exploitation of the Third World countries. This is to ease the ever worsening crisis in overproduction and capital in the mainly richer countries.
To cover such intent, they are promoting the idea of "laissez faire" or free competition as if the playing field is even between the monopolists and small businesses. In a larger scale, the monopoly capital is hiding the fact that there can be no real competition when only few countries control the production of goods and services, finance capital, and world market. With the help of both houses of the Philippine Congress, the Ramos government passed laws to immediately implements liberalization, deregulation, and privatization: These are:
Republic Act (RA) 8178 or Agricultural Tariffication Act -- removal of restrictions in the importation of food that include basic agricultural products such rice, onions, corn, potatoes, cabbage, and livestock that are being locally produced;
RA 8179 or Amendment to the 1991 Foreign Investment Act -- entry of foreign investors in the following; (a) 100% ownership of local business of their choice, (b) investment of as low as 5 Million pesos capitalization from the previous ceiling of P20 Millions, (c) 100% ownership of small and medium-scale businesses with P2.5 Million capitalization provided it will utilize modern technology and employ 50 workers;
RA 8180 or the Downstream Oil Deregulation Act -- which will give entry to new players in the oil industry but does not dissolves the oil cartel or monopoly in the industry;
RA 8181 or the Home Consumption Value Act -- change in the tariff system of imported goods from transaction value (TV) to home consumption value (HCV). Using the index of the world market, will increase the price of imported products. The following laws were enacted earlier:
Bank Liberalization Act -- entry of ten more foreign offshore banks.
Land Lease Act -- use of land by foreigners for as long as 25 to 50 years.
RA 7942 or New Mining Code of 1995 -- opening of 25% of land area of the country for foreign exploitation.
To further expand the areas for super profits by the monopoly capital, the privatization of public assets and governmental functions was opened for foreign investments. The Ramos administration offered a wide range of agencies to be privatized which more importantly include those operating the delivery of social services. Such services on water, electricity and power generation, education, health, housing, transportation, communi cation and even rice as staple food being basic needs of Filipinos, assure the foreign and local monopolies of unlimited market.
The Ramos administration has been receiving "pat on the shoulder" from the IMF-World Bank for accomplishing the agreed targets on privatization specially when the government declared budget savings in 1995 which came from the sale of public assets. This is the reason why Ramos is angered by the actions of the Supreme Court (SC) that delayed the sale of the Manila Hotel and the Me tropolitan Waterworks & Sewerage System (MWSS). Irritated by any possible block to implement the Philippines 2000, Ramos has been open in the government's role to change the Charter in order to remove the remaining barriers. It is clear to conclude that pr ivatization together with related policies of liberalization and deregulation are policy-dictates of monopoly capital through IMF-World Bank, GATT-WTO, APEC, ADB and that the Ramos government is in collusion. Specifically, privatization as a component of the design to intensify imperialist plunder in the country has the following objectives:
-- foreign investment in social services such as water, electricity and power generation, housing, education, health, transportation, communication, and even food, the market of which is assured. The scheme provides wide opportunities for dumping of goods, capital, out-moded equipments, and the expansion of market for information technology.
-- as an austerity measure through the reduction of government subsidies for public service to ensure foreign debt servicings.
-- huge super profits for foreign and local monopolies and promote self-interests of their partner-politicians and high bureaucrats.