Sunday, August 20, 2017

Privatising governments are out of touch

A recent report from the Transnational Institute on the transfer of public assets into the private sector has revealed what many consumers around the world already know — four decades of privatisation have generally not brought anything like the golden promise of cheaper, more efficient services.

Instead they have often produced a litany of run-down operations, failed infrastructure, corner cutting and profit and shareholder value maximisation over the needs of the consumer.

Such is the extent of the problem that in Europe there is a major shift towards wresting privately-run utilities back into public ownership. In Germany alone there are hundreds of municipalities deciding not to renew private company contracts; France is not far behind.

In the United Kingdom, Labour leader Jeremy Corbyn struck a chord with the electorate when he promised to re-nationalise the privately run rail network. Years of ownership by various companies have seen the price of travel rise in direct proportion to the decline in services provided.

In Australia, the reputation of the four major banking companies has never been lower, to the point where the Government is casting around for new players in the market in the hope that competition might placate a population thoroughly fed up with high charges and indifferent services.

Professor at the School of Economics at the University of Queensland John Quiggin summed up the mood when he said that most Australians now firmly believed that privatisation was a policy that had consistently failed.

“Yet it is still remorselessly pushed by the political elite. It is little surprise that voters are turning to populism in response,” Professor Quiggin said.

He cites the example of “the comprehensive failure of vocational education privatisation…yet despite this, the push for privatisation has gone on…for-profit education in the United States has been a disaster area”.

The UK’s Corbyn nearly caused the biggest election upset in modern times with a platform that contained the re-nationalisation of the railways and water industries. Shadow Chancellor of the Exchequer John McDonnell pointed out that three decades of water utilities in private hands had led to ownership by a handful of foreign investors, many based in overseas tax havens. 

“Meanwhile, prices have increased by 40 per cent and over a quarter of the amount consumers pay on bills goes towards servicing debt interest and paying out dividends,” McDonnell said

In Indonesia, the courts have intervened to annul water privatisation contracts in the capital, Jakarta, finding that the public-private partnerships had been negligent in fulfilling the human right to water for the city’s residents.

For decades we have been fed the mantra that the private sector, existing in the “real world” where competition mandated management efficiency, would do a better job of running public assets than lazy, uncommitted and incompetent public servants. Over time that rationale has resulted in privately run prisons, security systems, telecommunications networks and the management of resources.

If the chaos and misery spread by the global financial crisis was not warning enough of the effects of an out-of-control private sector, surely the Government of US President Donald Trump, a businessman with no experience in public administration, is the clincher.

While the private sector has a role to play — and in some areas it is just too complicated to return to public ownership — a rebalancing of the privatisation craze is necessary if we have any hope of moving towards a more just, sustainable future.

Friday, August 11, 2017

Public servants are Patel’s latest target

Priti Patel, the woman who is waiting for British Prime Minister Theresa May to make one more mistake so she can jump into the breach and drag the Conservative Party even further to the right, has been targeting the country’s public servants in her latest outburst.

Government workers’ pay rates are “crazy, wrong and out of step with pay for comparable posts in the private sector” she is claimed to have said (without actually defining what these ‘comparable posts’ might be) and “must be restrained”.

What really seems to irk her is that many senior public servants earn more than she and her Ministerial colleagues. Patel is one of those Members of Parliament, and there have been many down the years, who believe that Government Ministers should automatically be better paid than the people to whom they give orders.

In fact, any rational comparison between the work even a mid-range public servant has to do, compared with that of a Minister, would suggest otherwise.

When a Treasurer, produces a Budget in Parliament, has he sat down and worked out all the figures, making the policies proposed at least halfway affordable? Is Ms Patel as International Development Secretary, across every item of aid that goes to every country that her Department supports?

When Ms Patel sits in her office and signs the cheques, or rushes off to some donor country for photo opportunities, it is the workers in her department who have decided on the number of water purifiers and sacks of rice that can be afforded and from whom they can be purchased.

It is they who will decide what level of security she will need on her trips overseas and who provides it. They will even write the speeches she delivers to the grateful aid recipients.

In the past Ministers have always come back with the claim that they are ultimately responsible, and if public servants foul up it is the Minister that takes the hit. Yet how true is that in the modern political climate? How many Ministers actually resign these days over mistakes others have committed in their departments? Wriggling off the hook is a skill well practiced and honed to a fine art in today’s Government.

Of course Patel, who learned her politics at the knee of Margaret Thatcher, cannot help but hate public servants. It is in her DNA that they are a drain on the taxpayer, unproductive, lazy, their jobs protected from the ‘real world’ and so on.

She has accused top bureaucrats of having been too close to companies that have been awarded lucrative foreign aid contracts. This from a woman who has constantly advocated on behalf of the tobacco and alcohol industries and has sought to have bans that discourage smoking overturned.

One wonders how Patel would cope for one day without the support of the workers in her department. How her beloved Brexit would cope without hard working public servants trying to unravel the mess that her incompetent Front Bench colleagues are creating daily.

She should do no more than listen to the restrained response to her ranting from a Government spokesman: “The Civil Service deals with varied and complex issues and needs to attract, recruit and retain highly skilled individuals, which means it is sometimes appropriate to pay higher salaries.”

Sunday, August 6, 2017

The price of forgiveness

There are still good people in government — I have to believe that because the alternative would be to give up in disgust, joining the perpetual cynics and those who simply do not care anymore.

I have reported on my share of egotists, self-servers, blaggards and downright incompetents; of democratically elected presidents who behave like mafia chiefs; of leaders who pepper their speeches with the invective of the gutter, but perhaps worst of all, the ideologues prepared to go to any lengths to twist society into their view of the world, no matter the damage they do or the people they hurt.

A case in point is the current controversy surrounding the United States Student Loan Forgiveness Program. Set up towards the end of the George W. Bush Administration and continued through the Obama years, it offered university graduates the opportunity to work in low-paying public service positions — including policing, teaching, legal aid and social work — or for not-for-profit organisations.

If they completed 10 years of that service, they would be relieved of the balance of their loan taken out in order to afford a tertiary education.

By European standards the program was not generous — the inductees would still have to make repayments while they were working in their job, but at a rate that reflected their low pay, and at the end of the program the outstanding amount of the loan would be ‘forgiven’.

At least that was what the roughly half-million graduates who had enrolled in the program since it was established in 2007 believed. What the paperwork from the Department of Education they signed said, and what they continued to believe as they toiled away in jobs far below the levels that their degrees should have given them.

But now, just as the initial inductees are completing their 10 years of service, the Department appears ready to renege on the deal, claiming that the contractor originally hired to administer the program “could not be relied on” to give assurances that loans would be forgiven.

The Department said the contractor had made “occasional errors”, in its relationship with those in the program, but claimed that these errors had now been corrected and that everyone should now know where they stood.

According the Department, this means that inductees have to complete the program — and provide confirmation of their monthly repayments during the 10 years — before the Department would consider their eligibility for loan forgiveness.  

This last minute change of course has sent a shudder of apprehension through the graduates who are working their way through the program. As the President of the American Bar Association, Linda Klein points out, they took jobs and put their ambitions on hold based on the information they accepted in good faith from the Department. Now it seems they could be paying a steep price for the Department’s mistakes.

But is this a simple mistake, or really an excuse to ditch a program that is anathema to the current Administration in Washington? The Department is headed by Betsy DeVos, a super-rich businesswomen who has made no secret of the fact she has used her wealth to buy influence within the ruling Republican Party to “foster a conservative governing philosophy consisting of limited government and respect for traditional American virtues…we expect a return on our investment”.

Ms DeVos, whose nomination for the position was fiercely contested by Democrats in Congress, is known to be determined to remake American education in her preferred image — and has an intense dislike for the loan forgiveness program. While a direct assault on it would be met by a flood of lawsuits, the current development may be the start of a search for ways of killing it off by other means.

The Student Loan Forgiveness program was not only a way of helping students reduce their debts. It encouraged talented young people into areas where they might never have considered, helping people with their social and medical problems, beefing up law enforcement, teaching in rural and remote areas.

If they eventually move on, their lives and attitudes would still be coloured by the experience — and if even a tiny fraction considered the work worthwhile enough to devote the rest of their career to it, then society would be the beneficiary.

But the scheme does not accord with the hard line thinking of Ms DeVos and many other conservative Republicans. The bottom line is too fuzzy with liberal values and the sums do not add up.   

Friday, July 28, 2017

Brexit: A time for fools and knaves

Since last year’s referendum to leave the European Union (Brexit) there has been a great deal of name calling on both sides of the argument — and no doubt this will continue. However, there was nothing quite as surprising as the description of the Secretary of State for Exiting the European Union as “thick as mince” and “as lazy as a toad”.

Not so much the epithets — there are many who would find them quite reasonable — but that this description of the Right Honourable David Davis came from someone who might otherwise be considered one of his most loyal supporters, the former head of the Leave Campaign in the referendum, Dominic Cummings.

His attack came after Davis spent a half-day in Brussels to open negotiations on Britain’s exit where he was pictured across the table from EU officials, grinning and noteless before fleeing back across the channel.

Reports are that Cummings has had a Road to Damascus moment and now believes the vote to leave the EU might have been an error, largely because what he describes as the “morons” in the Government are making a hash of the process.

He is said to believe that the full implications of what is required to leave the EU may not be understood by anyone in the Government right up to Prime Minister Theresa May.

This is not the first time the abilities of members of the Government have been called into question. Foreign Secretary Boris Johnson’s gaffs have reached legendary proportions while Andrea Leadsom, once described by a senior Public Servant as “quite the worst Minister” he had ever worked with, regularly launches anti-EU tirades, one of the latest against the “unpatriotic” British Broadcasting Company for not coming down uncritically on the side of Brexit.

Priti Patel, the resolute Thatcherite, obsessed with hatred for the Leader of the Opposition, Jeremy Corbyn; Liam Fox, who believes it is “insignificant” to lower the country’s EU-ordained food standards to allow the importation of chlorinated chicken — described as a lazy and possibly dangerous way of cleaning the meat — from the United States.

And Michael Gove, who immediately contradicted Fox’s chlorinated chicken proposal, fuelling rumours of Cabinet dissent and seemingly taking every opportunity to present himself as the logical successor to May.   

While EU officials have generally kept their public opinions to themselves, privately they are appalled at the lack of knowledge shown by some of the most senior British politicians about the scope of the Brexit negotiations.

Why is this? How is it that with more than 300 MPs to choose from, so many incompetent characters have risen to the senior ranks of the Conservative Party?

Partly it is because that apart from a few high profile figures, Ministers have been chosen not from the entire party but from that segment that got behind Brexit in the referendum campaign.

The obvious exception to this is May herself, who carefully prepared her ground with a lukewarm endorsement of Remain, knowing that if her side won, she would at least stay on as Home Secretary, and if it lost, she would be in a position to make a grab for the top job given the Brexit mediocrity.

Then there is the fact that on both sides of politics there is a great deal of dead wood — MPs who have not and never will make the grade in government who hang on to their seats into their dotages and in some cases actually try to pass them on to their children.

Again there are exceptions: Ken Clarke, who has given excellent service in government and in the Parliament since elected in 1970, continues as the unofficial spokesman for the not insignificant number of Conservative MPs who still believe in the EU and who squirm at the antics of their Brexit Front Bench.

As a writer in The Economist magazine put it, Britain’s leaders are ploughing on scarcely acknowledging that the exit will involve compromises, let alone how damaging it is likely to be. “The longer they fail to face up to Brexit’s painful trade-offs, the more brutal will be the eventual reckoning with reality.”

So it seems in this grim period of the Brexit negotiations we must be content with fools who, through their ignorance, are destined to be judged by history as knaves. 

Wednesday, July 19, 2017

Power plant pollution ruining lives

While the issue of pollution from coal-fired power stations is being debated around the world, few residents can be so badly affected those who live near the Lakvijaya Power plant at Norochchcolai on the southern end of Sri Lanka’s Kalpitiya Peninsula.

In recent weeks they have been deluged in ash whipped up by the monsoon winds. Along with the usual respiratory problems, even the fundamental activities of life have become a challenge.

Not only did it become impossible to dry clothes outside, but flying dust, ash and charcoal settled on food.

“We simply cannot cook; we have to buy pre-packaged food from the supermarket, but that is too expensive for poor people,” one resident said.

As if this were not bad enough, hot water from Lakvijaya is being pumped into the sea, ruining the region’s fishing industry. Fisher Peter Warnakulasuria believes this is illegal “but it has been going on for some time and no-one seems to care”. 
Those who do care include members of Sri Lanka’s environmental movement, who have filed cases against the power plant after receiving “plenty of promises but no action”.

Local Councillor M.C. Alexander is supporting the case. He says officials of the Ceylon Electricity Board said they would plant a wall of trees to stop the ash blowing into residential areas and even suggested they could store the ash and sell it to the cement industry, but nothing came of either proposal.

“We have been raising these issues for five years now. There has been plenty of time to do something,” Mr Alexander said.

“Some of the residents said they would move away if they had somewhere else to go, but they are poor people. All that they have is here.”

Commissioned in March, 2011, the power plant, the largest in Sri Lanka, has a history of problems, including a series of breakdowns and outages, the most recent earlier this year.

Allegations that it was not built to international standards, have been laid at the door of the previous Government of President Mahinda Rajapaksa, with the contractors claiming the particular materials used were agreed at the highest level.

All this wrangling does nothing to alleviate the misery of the local inhabitants. Mr Alexander said the area was once quite prosperous with thriving agricultural plantations. Now the incessant rain of ash has created a wasteland.

“Nothing grows here now — and unless something is done soon, nothing will grow here ever again,” he said.       

Monday, July 17, 2017

New bid to save stricken airline

The board of SriLankan Airlines has submitted a restructuring plan to the Government in a last ditch effort to save the stricken national carrier. 

The plan puts the emphasis on downsizing and splitting off certain activities, such as ground maintenance, into separate companies. It comes after a lengthy search for an international investor appears to have drawn a blank.

The Government initially called for bids in July last year and expected to have finalised an agreement by December, but earlier this year it said that three offers had all been too low.

Further talks were scheduled, but by May the last interested party, American private equity firm TPG, pulled out.

In June Minister of Finance, Eran Wickramaratne said there was some interest from Dubai-based carrier Emirates over a possible tie-up with SriLankan as well as discussions with other entities including “one from Japan”. 

However Emirates, which acquired a stake in SriLankan in 1998 for $A90 million only to sell it back to the Government 12 years later for $A68 million, said it had no plans to get involved again.

Most commentators believed that Wickramaratne’s statement was more wishful thinking than based in reality.

Now Chair of SriLankan Airlines, Ajith Dias says he wants the Government to consider the carrier’s own plan to bring it back to profitability which involves consolidating some operations and shedding unprofitable routes. He believes the airline can be turned around.

“We need to become an airline operating primarily between India, the Middle East and Australia…Europe is a dead loss, only London is worth it,” Dias said.

“We have made a great deal of progress in eliminating corruption and mismanagement and a lot of the criticism we are getting now is unjustified.”

The airline’s relations with the Government have been anything but smooth. In 2007, British Chief Executive Peter Hill refused to bump passengers off a flight to make way for the entourage of then Sri Lankan President Mahinda Rajapaksa.

The President promptly revoked Hill’s work permit and appointed his brother-in-law, Nishantha Wickremasinghe as company Chair.

During Wickremasinghe’s watch the carrier’s losses mounted, leading to Dias’ appointment after the Government changed in 2015.  

Sunday, July 9, 2017

Disasters dog troubled Sri Lanka

In a troubled year the island nation of Sri Lanka has faced disaster on three fronts — two from nature and the third man-made.

Less than two months ago parts of the country were ravaged by the worst flooding in 14 years, brought on by a particularly violent monsoon season. Hundreds died or simply went missing, roads, homes and shops were swept away.

In the wake of the disaster aid agencies made their usual appeal for money, food and medical supplies, but in a world hardened to such tragedies the response was inadequate. India and China moved swiftly to help followed by the United States and Pakistan, but the funds needed to rebuild properly will mostly rely on local and charitable efforts.    

The floods have abated, but the water left behind became breeding grounds for mosquitoes that carry the feared dengue fever virus. In the worst outbreak of the disease since 2009 so far around 230 people have died and tens of thousands have been infected.

In a country with limited resources and with much infrastructure still affected by the flooding, hospitals have been overwhelmed. Some patients are sharing beds; others, often in need of urgent assistance, have been told to recover as best they can at home.

Dengue fever can be common in more developed countries, including Australia, but with proper treatment and a few days off work most people recover; in the conditions prevalent in Sri Lanka, health effects can be severe and even fatal.

The third element in this grim situation is a garbage crisis, with mountains of rubbish growing daily in the capital, Colombo. The problem stems from bureaucratic paralysis — the city’s council, a Government urban development authority and private contractors have blamed each other for the growing mess for years, without anyone capable of actually doing something about it.

One resident, who gave his name as Ashan, said he and other families had been living next to a rotting dump for years. “A local hospital dumps waste here and I fear it might be contaminated,” he says.

“It is especially bad when it rains. The stench is unbearable and then mosquitoes start to breed. I fear for the children.”  

Ashan said leptospirosis, locally known as rat fever, hepatitis and other water-borne diseases were just some that affected people in his neighbourhood. “There is also a lot of asthma, mostly among the very young and the elderly,” he said.

‘The air is highly polluted and methane gas is forming over the dumps and there could be explosions.”

In April the situation turned deadly when one dump collapsed onto homes, killing around 100 people. Many thought the tragedy would at last spur action, but three months on, nothing has happened.

In 2009 the civil war that had wracked the country for the previous quarter of a century came to an end. Many Sri Lankans actually regard the current problems as miniscule compared what they had to live through then.

“Parts of the country were devastated and even here in Colombo we lived in constant fear of bombings and assassinations,” one resident said.

“Now things have returned to normal, and our tourism industry is flourishing again. You Westerners should tell the world about our beautiful beaches and pristine jungles.    

“Yes we have difficulties now but we can grasp them and understand them — and if we can all work together we can fix them.”