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PRIVATIZATION - WHO BENEFITS? by Dr. Godfrey Vincent

posted 16 Aug 2012, 18:50 by Gerry Kangalee   [ updated 18 Aug 2012, 14:57 ]
 
Dr. Godfrey Vincent is Assistant Professor Tuskegee University Department of History and Political Science; former Part-time Assistant Professor of History at James Madison University, Harrisonburg, Virginia.
 
A former secondary school teacher, Dr. Vincent was a Community activist in Petit/Valley/ Diego Martin/Carenage/ St.James/Maraval area. He is a former member of the United Labour Front; Committee for Labour Solidarity (CLS) and Motion.
 
He is a former Vice-Chair Person of Youth Voice and former President of Simeon Road Superpan and Co-ordinator of CLS West. He is a former member of the Summit of Peoples' Organisations (SOPO).
 
He is a Rapso artiste (Brother Cymande) and a former Shop Steward of DC 37, Local 2054 and a delegate of the American Federation of State, County and Municipal Employees.
 
In his weekly column for the Business Guardian on 8/9/2011, Anthony Wilson launched a scathing attack on trade unions and gave his support for the privatization of WASA, First Citizens Bank, T&TEC, the National Gas Company and other enterprises owned by the state. I agree with Wilson that a debate on privatization is needed and in fact is already taking place on the website of the National, Workers’ Union.

First, privatization is part of the failed neo-liberal economy policy that has created austerity in Europe and has led to the “Great Recession” in the United States. Moreover, the evidence has shown that it has not helped the British economy after many years of its implementation. Furthermore, in Asia, Africa, and Latin America, privatization has resulted in loss of jobs, reduction in state revenues, and economic hardship on the citizenry.

Second, privatization, more importantly, is an attempt to recolonize the people of Trinidad and Tobago. The trade union movement and other radical organizations were in the vanguard in the struggle for the state to own and control the commanding heights of the economy. This call was made by TUB Butler, Adrian Cola Rienzi and the Oilfields Workers’ Trade Union (OWTU) in the 1940s.

Additionally, Transport and Industrial Workers Union (TIWU) played an important role in the establishment of a nationalized bus service.. Moreover, Communication Workers’ Union (CWU) was instrumental in having the government nationalize the private telephone company.

Furthermore, George Weekes and the OWTU nudged the government to partially nationalize the oil industry. Too, NJAC in 1970 called for the state to play an important role in the economy. In the middle 1970s, ULF, through its various struggles, forced the PNM government to create new state enterprises.

Thirdly, privatization is a reversal of the gains fought for by the working class. The working class in the post-independence period has borne the brunt of austerity measures. More privatization means that the working class will be called upon to shoulder the burden of any new social settlement. The workers did not create the crisis of mismanagement and corruption in the state enterprises that are currently slated for privatization. This is why we have to reject NATUC’s position on privatization and hold a national COSSABO to address this issue.

Fourthly, workers and ordinary citizens are not the ones who will benefit from the sale of these companies. Major foreign corporations and capitalists are the ones who will enjoy feeding at the trough. The sale of these companies will mean that dividends, profits and other payments will be repatriated to other countries. This capital flight will have serious implications on the nation’s balance of payments.

Fifthly, privatization will result in greater financial hardships on the working class and the working poor. They will have to pay more for water, electricity, gas and gasoline, telephone services and transport. Once these services are privatized, the state subsidies will be removed, resulting in higher prices. Already workers are fighting for pay rises which have been met with stiff resistance from the government and private sector. Paying increased prices for these services will be an additional burden placed on the backs of workers and the working poor.

Sixthly, privatization will tend to benefit the 1% elite in the society at the expense of the 99% of middle class, working class and working poor. These groups have seen their standard of living drastically reduced since the late 1980s when the NAR first unleashed the privatization “virus” on the nation.

Privatization will only increase the wealth of the elite and give them more political chips to further oppress the poor. The economic divide between rich and poor will further widen because the safety nets that once existed will be totally destroyed. In this scenario, in the words of Errol McLeod, former PG of the OWTU and presently Minister of Labour, “Big fish will eat little fish and little fish will eat mud.”

Seventhly, privatization of state enterprises will not create a share-holding society as envisaged by the proponents of privatization. Did people benefit from the sale of National Fisheries? Will people benefit from the sale of First Citizens Bank and other enterprises that are on the auction block? The answer is no.

I want to see a study that was conducted to show how share-holder ownership has increased when privatization became part of government’s public policy. This talk about creating more shareholders is only “smoke and mirrors.” Comparative studies on privatization in the global south have shown that the elite and foreign multinational corporations benefit from privatization because they obtain them at fire sale prices. Given the government’s position on public private partnership, it is quite clear that ordinary people will not be able to purchase these shares when these companies are offered for sale.

The country is celebrating 50 years of independence. Will more privatization result in greater economic independence? Will more privatization result in every creed and race having an equal place? Will privatization free the nation from the noose of neo-liberalism? These are questions that we need to address as a nation. Privatization is not the solution to the nation’s economic woes. We need to have a discourse on a new paradigm of economic development. The nation needs to engage in this discourse as a matter of urgency.
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