It’s time to move away from public-private partnerships and build a public future Geopolitics News

Notice

BRUSSELS / LIMA / MANILA, 2 Feb. 2023 (IPS) – Last month, we joined more than 1,000 representatives from all sectors of civil society who gathered in Santiago, Chile to discuss the future of – and threats to – public services around the world.

Participants discussed the chronic underfunding that continues to fuel economic inequality, injustice and austerity, as well as neo-colonial policies that maintain the status quo.

Today, these debates have resulted in the launch of “Our Future is Public: The Santiago Declaration for Public Services– a landmark agreement signed by more than 200 organizations pledging to work to “transform our systems, valuing human rights and ecological sustainability over narrowly defined GDP growth and economic gains”.

One of the most damaging initiatives that has profoundly affected the delivery of public services and infrastructure projects on every continent is the rise of public-private partnerships, or PPPs.

They have long been promoted by institutions such as the World Bank as a silver bullet to bridge the so-called financing gap for investments in services and infrastructure. The premise is that the private sector can deliver these services more efficiently and at a higher level than the public sector, despite much evidence to the contrary.

We unveil the pitfalls of PPPs in our new report History RePPPeated II: Why Public-Private Partnerships Are Not the Solution – the second in a series of surveys documenting the impacts of PPPs in Africa, Asia, Latin America and Europe.

Launched at the Santiago conference with some of the partners responsible for investigating and writing the case studies, the report not only highlights the negative impacts of PPPs, but makes recommendations on how to better finance infrastructure and public services in the face of the false solutions that have been proposed in the context of the current polycrisis.

These stories fully reflect the red flags that are raised in the Santiago Declaration.

Through these investigations, we uncovered failures at multiple levels in PPPs covering infrastructure such as roads and water supply, as well as vital public services such as health and education.

From escalating costs for the overburdened public sector to environmental and social impacts, we have seen time and time again that communities have been ignored, displaced and their basic rights violated by ill-considered projects designed and implemented in the pursuit of profit.

An excellent example is the Melamchi Water Supply Project (MWSP) in Nepal. First announced nearly a quarter of a century ago, the project’s goal was to provide clean, reliable and affordable water to 1.5 million people in Kathmandu.

And yet, 24 years later, residents are still waiting, as communities around the Melamchi water source face water scarcity and eroding livelihoods. Instead of having access to clean and safe drinking water – an internationally recognized human right – they have witnessed an extraordinary backlash from private companies and institutional donors, including the World Bank. , which have failed to deliver on their promises.

To add to the colossal failure of the MWSP, 80 hectares of agricultural land was lost to the project, a blow to local residents, and up to 80 households were forcibly displaced due to construction.

Who owns and controls our public resources and services has become even more vital with the outbreak of the Covid pandemic in March 2020. Market-based models cannot be relied upon to ensure human rights or the fight against inequalities because they are only accountable to their shareholders and not to their users.

This resulting focus on profit is evident in our Liberia case study. Here, the American company Bridge International Academies (now NewGlobe) “abandoned” its students and teachers at the height of the Covid-19 pandemic, closing schools and reducing teachers’ salaries by 80-90%, although that they are paid by the government.

And yet, in 2021, the Liberian government extended the project indefinitely, effectively subsidizing a for-profit American company at a cost that is at least double public spending on public schools.

In Peru, the highway’s yellow line has become one of the most controversial projects ever. This toll road was supposed to alleviate congestion problems in the capital Lima, but instead toll rates were unreasonably increased on at least eight occasions.

It generated nearly $23 million for the private company involved and took place with the complicity of public officials. During this time, the Peruvian State suffered economic damages of 1.2 million US dollars due to clandestine negotiations between officials and the private company, which led to incorrect implementation and inappropriate modifications of the contract years after its initial signing.

Today, questions about the project and the conflicts surrounding its implementation remain, while the expectations of the people of Lima for quality road infrastructure to improve the living conditions of those most affected are still not met. satisfied.

The human cost of the PPP projects featured in History RePPPeated II is obvious, but they are far from the exception. Rather, they serve to illustrate common failures of the PPP model that risk compromising basic human rights and undermining the fight against climate change and inequality.

Their continued promotion is one of the many reasons we support the Santiago Declaration. Together with all its signatories, we will build resistance to private interest-driven PPPs and promote public-public or public-common partnerships for a public future.

Oceane Blavot is Senior Campaign and Outreach Coordinator, Development Finance, European Network on Debt and Development; Rodolfo Bejarano is Economist and Analyst – New Financial Architecture, Latin American Network for Economic and Social Justice; Mae Buenaventura is Debt Justice Program, Team Leader, Asian People’s Movement on Debt and Development

The Santiago Declaration on Public Services, is a global manifesto signed by more than 300 organizations around the world, which was launched at the end of last week. The Declaration marks the beginning of an international movement to move away from the privatization of public services and towards a future funded and controlled by the state. It is also the result of a 4-day conference in which several CSOs around the world launched a report containing a series of surveys highlighting the failures of the PPP model in projects around the world, titled History RePPPeated II.

This OpEd is written by three of the report’s authors.

IPS UN Office