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World Bank and the third world
The World Bank announced recently that it just would not do to “leave-everything-to-the-private-sector” in developing countries. This should be considered a timely eye-opener particularly for Third World governments and policy-makers. What makes this news doubly welcome is the frequent association of the World Bank and the IMF with failed development strategies in developing countries, which evolved around the advocacy of increased privatization and the relentless whittling down of welfare and the public sector.
Given this backdrop, the position set out in its recent World Development Report about “making services work for the poor” needs to be examined carefully. We say that it would be wrong to conclude that privatization is the only means to “ensure the provision of improved healthcare, education and other services to the poor people”. For very many in the Third World, including some politicians, think-tanks and academics, “structural adjustments” facilities extended by WB and IMF over the decades, have meant only one thing - increased hardships for the poor.
No panacea </B>
The gradual shrinking of the State sector in developing countries and the corresponding rise of the private sector has almost routinely been put down to WB-IMF thinking and advice. The recent WB position that privatization can no longer be considered a panacea for all our ills, however, should set developing countries thinking.
We hope our decision-makers, policy-planners and the local development community have taken a long, scrutinizing glance at this ground-breaking statement. We believe that successive governments have been easily caving in to simplistic thinking on these issues. The private sector- it goes without saying - has a principal role to play in a country’s development effort but it would be fallacious to presume that the interests of the private sector would easily correspond with the public interest. The private sector is vastly instrumental in energizing a country’s productive sectors and in generating employment but it is private profit which, essentially, keeps the private sector humming.
The profit motive and public service, which is the function of the State sector, are usually at variance. How could a State, then, “leave-everything-to-the-private sector?” This is the prime issue, in this context.
In the case of Mauritius, the scaling-down of the public sector began in 1976, with the wide propagation of the “open economy” doctrine. There has been a social decline in this country. The number of beneficiaries in this country would give us a measure of those who are continuing to live on social margins. The country’s per capita GNP, as is well known, is no accurate pointer to how well the country is performing in an economic sense. If our development strategy, with its emphasis on the private sector, had worked so far, there would be equitable prosperity, which is clearly not the case.
Whereas the inefficiencies and excesses of centralized planning have to be eschewed and the private sector encouraged to participate vibrantly in the production process, the State should guard against abdicating its role as service provider to the less privileged. The government needs to consider how these systems could be revived and energized from within. This is the challenge.
Ahmad MACKY</B>
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