Privatization is a Policy for the Benefit of Foreign and Local Monopolies, and the Politicians and High Bureaucrats!
The IMF-World Bank is the biggest financial institution controlled and servicing the interest of G-7 countries led by the US and other powerful states like Japan, Germany and other European countries, are also the centers of monopoly capitalism in the world. It serves as their means to invest their capital via loans of high interests (development aid as they call it) to underdeveloped countries.
Upon the dictates and corruption by the politicians and high bureaucrats, Third World countries such as the Philippines become desperate for funds from the IMF-World Bank. As these loans grew, the IMF-World Bank is able to define the economic polices contained in the SAP signed by their client states. Effectively, these arrangements serve the entry of foreign products from the developed to the underdeveloped countries. Moreso, through GATT-WTO and APEC, the richer countries are able to hasten the dumping of goods and capital that brings forth huge profits and high in terest on loans. Moreover, they are able to control the flow of raw materials for their industries for higher production level and the export of finished products.
Privatization as a policy that serves the interest of foreign monopolies is part of the gr and design of imperialist countries to exact super-profits and firm control over underdeveloped countries. Super-profit is higher rate of profits earned by producing and selling goods and services in their client-states vis-a-vis ordinary profit when the same is done in their own countries. This is possible in underdeveloped countries where workers are paid lower wages, and monopoly pricing is possible.
Super-profit is assured through the entry of foreign capital in the social services where the market is assured. As an underdeveloped country, wage/salary in the Philippines is lower and is even brought down further via mass lay-off of government employees which are replaced by contractuals. By merely taking over the facilities and infrastructure of the privatized agencies, there is no need for the private owners to immediately invest in capital, thus interest costs is also saved. As monopolies dealing with basic needs do not anymore require expense for advertisement and product promotions.
Moreover, monopoly pricing is liberally allowed considering that there is no competition in the light that social services which used to be solely in the hands of the government are transferred to the manipulation of the big businesses. Besides, under the current system of monopoly capitalism, pricing is not anymore directly influenced by the law of supply and demand.
Market forces are heavily influenced by monopolies who control all aspects of the market from production, capital, and distribution wherein artificial short age of supply can be created to force price increases. On the other hand, the demand for basic social services and goods is in elastic meaning if its only direction is upward. On top of market manipulation, the monopolies finance politicians and high bure aucrats to make sure that regulations is on their side.
The entry of imported agricultural products including those which we can locally-produced such as rice, corn, onions, potatoes, cabbage, and livestock only mean more and more super-profits for the foreign monopolies. Through market manipulations, the monopolies create shortage of supply just as the rice crisis in 1996 in order to justify heavy importation and increase the market prices.
Considering that the price level of agricultural products in the country is higher due to low \par productivity, higher super profits is earned by foreign investors by selling their products which are produced at very low cost due to advance technology in the Philippines. Contrary to mechanized system of agricultural production in developed countries, the lack of support from government and promotion of foreign interest keep local agricultural industry in low productivity level. Liberalization in trade even reduced tariffs on imported goods.
Privatization widens areas for the dumping of the out-moded equipments due to fast technological advances in the developed countries. The process becomes more profitable for them instead of destroying the equipment, for example, those to be used in privatized hospitals, running and mai n tenance of water system, light rail, electricity & power generation; and construction of housing projects, light rail, economic zones, and schools. Besides, US is aggressively promoting its information technology industry to gain upper hand in the world market. These products are now being massively introduced in office operation and schools to the extent of substituting the need for workers. Together with all of the above benefits, privatization insures more funds for foreign debt servicing while increasi ng the amount of foreign debts.
The local monopolies are essential elements in the firm control by foreign monopoly capital in the economy of their client-nations such as the Philippines. They serve as the biggest partners in trade and financial businesses as well as link between the foreign capital and underdeveloped parts of the world for the control of the former. They are closely linked with the landlords who is also an essential element of their main businesses of exporting raw materials and importing finished products. Their accumulation of wealth started from being landlords themselves while they remain as landlords. In the Philippines they are the Sorianos, Ayalas, Zobels, Roxases, Elizaldes, Aranetas, Lopezes, Yutivos, Cojuangcos, Montelibanos, and others.
As big partners of foreign capital the likes of Ayalas, Lopezes, Cojuangcos currently own monopolies in transportation, communication, electricity & power generation, real estate development and are now into privatized social services such as water. The contract of MWSS was awarded to Maynilad Water Services, Inc. (Lopez-Benpres-Lyonnaise des Eaux), and the Manila Water Company (Ayala-Bechtel Enterprises-North West Water/United Utilities). Apart from the profits of turning social services into bus iness, their control over such basic needs open opportunities for business expansion that reinforces their upper-hand in business as monopolies.
Likewise, foreign monopoly capital through the help of local monopolies controls the government through the pol iticians and high bureaucrats for ease in the furtherance of their self-interests. Politicians are elected to their posts through the funds of local monopolies aside from the fact that most elected officials are landlords and businessmen. On the other han d, bureaucrats are appointed upon approval by big businesses and recommendation by politicians including retired and active military officers. \par As we can see, the Ramos cabinet is composed of military officers, foreign schooled agents of the IMF-World Bank, and definitely proteges of politicians. It is common that the best Cabinet members move to the IMF-World Bank, the Asian Development Bank (ADB), or big businesses after their stint in government. Just like President Ramos who is trained in West Point, pol iticians and high bureaucrats improve their expertise as implementors of foreign dictates via schooling abroad mostly upon the former's sponsorship.
Besides the fact that they must have the go signal of big businesses to be elected or appointed in the top positions in government, these politicians and high bureaucrats reap their own reward of self-aggrandizement. They full their pockets from public funds while in power in order to perpetuate themselves. Privatization is one policy that affords them unprec edented opportunities to collect huge kickbacks.
The Ramos administration is racing against time to complete the process of privatization. Every contract transacted between government and the private sector assures the politicians and high bureaucrats thei r under the table deals or kickbacks. When some of them cry foul in the process, it is simply to call attention for their own share knowing that billions and billions of money are collected by those who are closed to the deals. Thus, Malacanang is irritated whenever there are delays like the Supreme Court decisions in the sale of Manila Hotel and MWSS while pronouncements to cover uncovered shady deals such that of Amari Bay Coastal Corporation-Public Estates Authority (PEA) and Petron Corporation (ARAMCO) .
The opportunities for corruption in privatization extend beyond the consummation of the contract. More kickbacks can be exacted through agreements in price increases of privatized social services, the politicians and high bureaucrats are still needed by the private contractors for legitimization. Other means are the expansion of coverage of agreements and renewal of contracts as venues for corruption. Other schemes of privatization such as Build-Operate-and-Transfer (BOT), joint ventures, and commercialization, which covers health, education, housing and infrastructures are business areas through their dummies.