Bank “soul searching” on privatisation

1 April 2003

In February, the World Bank’s Latin America and Caribbean (LAC) department’s Finance, Private Sector and Infrastructure section staged a seminar called ‘Rethinking Privatization: A soul searching exercise’. The seminar provided an opportunity for three critics of public services privatisation in Latin America to explain their concerns to sixty Bank officials, including US executive board member Carol Brookings. The critics were Brendan Martin, director of Public World; Ariel Caplan, legal counsel to the Argentine Consumers’ Association; and Peter Gleick, of the Pacific Institute.

Focusing mainly on water, electricity and railways, they pointed to the economic and social impact of privatisations, such as on access to services by the poor, jobs and terms of employment, and small and medium-sized enterprise development. Regulatory arrangements, even when designed to improve and expand services, were proving incapable of doing so effectively. Increasingly, tensions between the interests of transnational service providers and poor people were forcing, as the seminar demonstrated, a rethink.

Responses to the critics acknowledged the lack of popular support for public services privatisation in Latin America, and contrasted that with evidence of welfare economics research that privatisation had led to net benefits. Discussion at the seminar was dominated by consideration of various ways to design and communicate about privatisation more effectively, rather than the development of alternatives. There was consensus, however, that the Bank’s focus in the region might need to return to restructuring state-owned enterprises and supporting service delivery through small enterprises, including non-profits, because of the retreat from LAC utilities markets of transnational businesses.

Full account of the seminar, Public World available shortly

e-conference on Bank services report

The World Bank is sponsoring an e-conference on the World Development Report 2004: ‘Making Services Work for the Poor’ (see Bretton Woods Update 31). The conference will begin 14 April and continue until the end of May despite a delay of nearly a month in releasing the first draft of the report. There are concerns that some target audiences will not have received a hard copy – let alone a translation if needed – of the draft by the time the conference begins.

Brendan Martin of Public World in London will moderate the six-week long global discussion. “The Bank sees the discussion not only as a last chance to influence the WDR but also as a way to learn for the future,” says Martin. “For civil society, I think it is also an opportunity to develop and enrich our understanding and debates about these issues, and so improve our work.”

After revisions, the WDR draft will go to the Board for consideration 27 May.

More details and information

No pain, no gain: WDR 2004 on services