The dangers of PPPs

Dr Gabrielle Jamela Hosein
Dr Gabrielle Jamela Hosein


TO financially-strapped states, public-private partnerships (PPPs) appear as a growing solution for providing technology, financing, infrastructure and services. Global case studies suggest they are a Trojan horse.

Their interlock with Finance Minister Colm Imbert’s fiscal strategy should provoke public conversation about each potential partnership and its implications, and send us to sharpen our knowledge of the impact of PPPs elsewhere in the world.

Caribbean feminist Peggy Antrobus brought this to my attention just two weeks ago, pointing to research by the feminist network, Development Alternatives with Women for a New Era (DAWN), and suggesting we needed to bring the Caribbean into an ongoing global critique. Post-budget, it seems even more urgent.

Wherever you turn in the global South, civil society has hesitations about PPPs. These are long-term contracts, underwritten by government guarantees, where the private sector builds and implements projects or services traditionally provided by the State, such as hospitals, schools, roads, water, sanitation and energy. In our budget, PPPs will be used in agriculture, housing, energy and San Fernando’s waterfront development, but this is just a beginning.

Globally, they are considered another step in consolidating the influence of the corporate sector on the development agenda, giving private interests both more access and brokering power than civil society, whether at the UN General Assembly or national levels. They are bluntly called a tool of corporate capture of public policy, which promises increased productivity, growth, employment, food security, environmental sustainability and inclusion, but which instead increases extractivism, land and infrastructure grabbing, and inequality.

There’s so much backlash that, in October 2017, 152 civil society organisations, trade unions and citizen organisations from 45 countries launched a campaign manifesto to demand a moratorium on “the aggressive promotion and incentivising of PPPs” over “traditional public borrowing to finance social and economic infrastructure and services.” The lesson is not to be sweet-talked into a long-term strategy we have insufficiently examined.

Surveying DAWN’s resources shows that PPPs are considered to cost governments, and thus citizens, more in the long run, because states underwrite risks, and costs rise. There are examples from Lesotho, the UK and Liberia. What’s called “off-balance sheet” accounting can hide true costs of PPPs from national accounts. PPPs have generally failed to address an increasing divide between rich and poor, and gender gaps, as exemplified by Tanzania and India. They are considered to increase risks of corruption and reduce public transparency.

As the global campaign manifesto describes, “PPP contracts are extremely complex. Negotiations are covered by commercial confidentiality, making it hard for civil society and parliamentarians to scrutinise them,” especially without procurement legislation in place. Also, “PPPs can limit the capacity of governments to enact new policies – for example strengthened environmental or social regulations – that might affect particular projects,” with examples from Australia, Brazil and the Philippines. Finally, they are considered to result in wrecking of habitats, displacement of communities and abuse of protesters. None of this would be surprising here and our planned mega-projects, including the port in Toco, could see exactly some of these outcomes.

Clauses can make governments compensate private interests for changes in laws that impact projects, even when they are meant to protect citizens. In another example, clauses could require governments to compensate the private sector for workers’ strikes, pressuring states to use security forces against workers even with legitimate demands. Even speaking from a better regulated political economy than our own, the European Court of Auditors 2018 report was entitled “Public Private Partnerships in the EU: Widespread shortcomings and limited benefits.”

With regard to gender equality, the African Women’s Development and Communication Network essentially says to mash brakes. First, data (including from the World Bank) doesn’t suggest that PPPs effectively address gender inequalities. Second, new or increased user fees of previously public services may increase, more greatly affecting women who, inevitably, predominate in the lowest paid sectors of the economy. Finally, as happened in Portugal, when governments have to pay the bill of failed PPP projects, “women are disproportionately impacted, either through increases in their unpaid work or cuts in their public sector employment.”

With what economists describe as little fiscal space, or what others describe as mauby pockets, we have to protect every dollar. It may seem like we are “maximising finance for development,” following World Bank mantra, but we have learned over decades of structural adjustment policies that liberalisation of economies can cost the most vulnerable in ways now familiar to us in the region. Be aware. At this time, we cannot be complacent.

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Entry 394


"The dangers of PPPs"

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