Much ado about Privatisation.

First Published: 1999-04-27

by Rick Lowe

The gauntlet was thrown but then picked up when the “generous to a fault” severance package offered the BCPOU was revised to make it even more generous. Not to mention the possible impact on future severance packages and the increase to our national debt.

An Analogy.

In recent years the organisation I work for, and our Caribbean and Central American colleagues have gone through numerous changes with our major supplier. When we were advised that our vehicle model line-up would include far fewer models we argued vehemently that our businesses were being threatened. Since this program has been put into place, we can sell fewer models, but we are selling more vehicles. We all tended to look at their decision from our own experience. If we were selling five models a year, that was income… when we could no longer sell that model, our income would obviously decline. However, we were proven wrong.

We could have stormed out of the meetings or raised hell in what has become known as the court of public opinion, but it would have done little to secure our future positions with the supplier. Thank goodness we decided to approach the changes with the resolve that if we wanted to stay in business we would have to adjust. If there were issues we needed addressed we would have to present rational arguments for them. Thank goodness we took this approach. Numerous issues that were never agreed to previously were resolved in the process.

Take the money and run.

If I could have the ear of the BCPOU membership for just two minutes, here is what I would tell them:

Ladies and gentlemen, you are obviously free to choose your course of action in this whole process but I have one big fear. No it-s not how much damage you might do to our country and by extension all our citizens with violent actions or sabotage… although these are serious concerns. My real fear is that the opportunities available from privatisation will be missed by those people with the most knowledge of the industry. In other words, if you do not try to establish a business for yourselves, either individually, jointly or severely you will end up simply changing employers. You will not end up owning a part of your own enterprise, and by extension that elusive piece of the economic pie.

While the BaTelCo consumer is held to ransom, opportunities are being missed.

During all the protests about privatisation I heard of a major undertaking in which people are putting a group together to study ways to get into the telecommunications business. This may be speculative, but chances are that if they are better prepared when the application review process for the various opportunities available takes place, the only thing the majority of the BCPOU members will have to show for their effort against privatisation might be an arrest record.

This would be a tragedy.

Privatisation is not a simple process.

Governments in many countries and states have faced numerous obstacles in their desire to provide better opportunities for their citizens through privatisation. The Mackinac Center in Michigan has done numerous studies on this phenomenon now sweeping the world. In one of their studies about privatising a school they offered the following advice:

    1. “Be Prepared.
  1. Create a policy context.
  2. Identify the specific needs that give rise to considering privatisation.
  3. Visit a district that has privatised the service you are considering privatising.
  4. Set up a study group.
  5. Involve the news media.
  6. Don-t promise a miracle.”
    The conclusion of the article emphasised that without “careful planning the opportunity for informed and respectful debate will be lost.”

The New Zealand model.

New Zealand has gone from an economy that was relatively free and booming in the 1950-s to Socialism and back over the next twenty years. When taking stock of their Socialist policies they “found themselves victims of exorbitant tariffs, massive farm subsidies, a huge public debt, chronic budget deficits, rising inflation, a top marginal tax rate of 66 percent, and a gold-plated welfare system.” It has also been noted that “about the only things that grew during the period from 1975 to 1983 were unemployment, taxes, and government spending.” We certainly fit the description of the latter two – higher taxes and higher government spending.

In 1984 among the resultant economic ruin of Socialist policies New Zealand began comprehensive liberalisation. Farm subsidies ended, tariffs were reduced to one-third of previous levels, and taxes were slashed to an average level of 21.5 percent.

According to Lawrence Reed, New Zealand-s most “dramatic success was the sale of Telecom NZ”

Mr. Reed continues: “These dramatic changes have paid off handsomely in economic dividends. The national budget is balanced, inflation is negligible, and economic growth is surging ahead at between 4 percent and 6 percent per year.

While recent elections brought a new government, it is believed that the political consensus for free-market policies has been entrenched. In fact the party that opposed these principles only received 12 percent of the vote.

The road ahead.

It is obvious that our Government is sadly lacking in its public relations over the privatisation effort, and maybe a visit to The Mackinac Center and New Zealand will benefit the government, the unions and the country at large. It will be a pity if the Free National Movement, the party that restored confidence in our citizens and investors alike is remembered for its failure to properly inform the nation. A legitimate criticism of the former government.

With a little effort there would be much less ado about privatisation.

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