Privatize This

Recently AMERICAS.ORG has focused on resistance to privatization everywhere from Bolivia to Costa Rica. A member of our editorial board observed that “the left frequently overlooks the possibility, occasionally realized in practice, that privatizations break up monopolies that gouge and provide poor service to consumers.” Here are excerpts of the ensuing discussion:

I AGREE IN PRINCIPLE, but find little evidence of virtuous privatizations. Most are slash-and-burn. Here the old public municipal water system was a horrific, corrupt, regressive monster. The new one (Bechtel/International Water LLC) may have been more efficient, but it was also a capital pump, expected to generate $63 million per year for foreign investors. Given the bad records of both the state and private sector, could a “civil-society” option be possible?
– Tom Kruse, Cochabamba, Bolivia

PUBLIC-SECTOR MONOPOLIES have been notoriously dysfunctional and unaccountable throughout Latin America. Any number of intelligent policies could have dealt with this. The obvious ones include improved regulation and/or establishment of mechanisms to promote competition within the public sector. But the consistent response to public-sector dysfunction has been wholesale privatization (at less than wholesale prices) with ownership turned over to politically well-connected private-sector groups, often financed and controlled from abroad.
     Privatization won out because it offered (a) access to supplies of capital that in fact were/are needed to modernize long-neglected infrastructure, but also (b) a way for national governments to demonstrate compliance with the one-size-fits-all Washington consensus about the preferability of private- over public-sector provision of public goods, and/or (c) a way for domestic political elites to enrich their families and/or friends who gobbled up these industries on obscenely advantageous terms.
     As was predictable, time and again these new private monopolies or oligopolies have remained entirely unaccountable to consumers. And while in some instances they have improved the quality of service, they typically raise prices to astronomical levels. The result is that basic services become inaccessible or prohibitively expensive for all but the wealthy, while the wealthy and transnationally oriented firms gripe a bit about costs but go along to the extent that those essential services improve.
     Whether a civil-society option is plausible strikes me as the right question, though I don’t know the answer. Would that the left had been posing this sort of question for the past decade or so, rather than railing indiscriminately against any mention of the word privatization. I fear we are at least slightly to blame for the absence of creative alternatives from which the Bolivians and others could now draw insight.
– Eric Hershberg, New York City

Context Missing

IT SEEMS AMERICAS.ORG (“Fool’s Gold,” April) would damn the local banker when he forecloses on bankrupt farms, as though the loans were merely a trick to wrest the land from its owners. Even if you don’t understand banking, you still need the banker. Try to farm, start a business, build infrastructure or promote any public good—anywhere in the world—and see how far you get without credit. In the poorest countries the World Bank and IMF, unlike private lenders, do not seek profit. Their aim is to reduce the risk, for profit-seeking companies, of sending capital to the capital-poor. It’s difficult to balance these interests, and they have done it poorly sometimes, but that’s no reason to dismantle the institutions.
     My objection to AMERICAS.ORG coverage of international development and trade policy is its strident contra-ism that highlights a policy’s negative effects without mentioning its goal or payoff. You have to acknowledge the trade-offs when, for instance, a country’s natural resources are consumed to produce exports that bring in needed foreign capital. AMERICAS.ORG reports the resource consumption as if it were the goal. Without context, including the real motivations, the story is unbelievable. Yes, multinationals frequently distort environmental protections and democratic processes in every country, ours included. In the process, both legitimate and corrupt interests are served, and AMERICAS.ORG should help us sort these out. But profit-seeking multinational investment itself is not the problem. Properly regulated, it’s a solution to the problem. It makes no sense to rail against profit per se, when profit is precisely what drives capital toward those who need it.
     I’m concerned that AMERICAS.ORG readers will not be able to influence policy because they haven’t been presented with these nuances. Rather than simply demonize the World Bank and IMF, teach your readers what these institutions are trying to do. Expose their failures, yes, but acknowledge some successes, and show how specific actions by activists can help shape their future behavior. Otherwise you’re just leading the charge against a mirage.
– Rob Machalek, St. Paul

I watched all those family farms in Iowa get closed down when I worked for a small Iowa daily paper in 1984–1986, and I have a close friend who is a small-town banker. It is a leap in logic to say that because the farm crisis was not his fault (true), it cannot be chalked up to lousy bank policies somewhere in the system (false). That ignores federal deregulation, inflated oil portfolios, and the rest of the factors that brought down Continental Bank and a whole sector of the economy along with it back in the 1980s.
     One thing AMERICAS.ORG World Bank and IMF coverage could acknowledge is that those of us who live in the United States benefit from trade imbalances to the extent that we are consumers, and because we get paid in dollars. That same trade imbalance may work against those of us in the lower parts of the U.S. class system, where we have less control over our employment status. I think that might explain the wide range of protests against corporate globalization—for some U.S. citizens it’s a matter of economic survival, while for others it’s more abstract.
– Anne Holzman, St. Paul

The concern about World Bank and IMF policies does not stem primarily from a fear and loathing of lenders per se. Rather, these institutions have demonstrated an enormous capacity to shape development policies in national contexts around the world, and not because everyone happens to agree with the policies. Given stark inequalities of power and wealth between the economic North and South, nations often have no choice but to accept IMF or World Bank terms if they want to develop at all. What’s more, unlike nation-states, these institutions had, until recently, been impervious to citizen criticism. We might not like every position that’s articulated against these institutions, but the mere fact that we’re hearing them begins to move us toward more than a simple redirection of their policies. What we need to do is democratize the mechanisms through which the policies become our reality.
– Bruce Campbell, Minneapolis

Good News and Bad

I UNDERSTAND the importance of awareness in the United States regarding conflicts in Latin America (“Up the River in Colombia,” March), yet many people take that information and assume all of Colombia is like San Pablo.
     Where I come from, Bogotá, we experience a different type of violence. It is violence in the hands of the poor—the low-income delinquents suffering from the country’s economic situation. It is a reality that involves many issues, and reflects the other conflicts, yet it is not quite the same.
     I could write a book on what I have heard about Colombia in the United States: “So, you sell cocaine in stores there?” “Well, your dad is an agronomist, so he must help on the coca plantations.” “I don’t ever want to go to that country. It seems pretty dangerous.” “No way will I marry somebody from Colombia. I am scared of what they will do to me.” These individuals are ignorant, of course, but I don’t blame them, given what kind of information they get about Colombia.
     In Costa Rica recently, I saw a photo of Bill Clinton with a group of Colombian kids who had come all the way from their small town on the Atlantic coast to play Vallenatos in the White House. Clinton liked them so much he wore a typical sombrero volteado from the coast. People don’t hear about those things here in the United States. That is very sad.
– Paola Murcia, St. Paul

Wait. Let me be sure I’ve got this. AMERICAS.ORG is too negative? Oh, honey. This 46-year-old teacher, activist and single mother of two girls reads nigh on to every word of AMERICAS.ORG, even if I stay up that extra hour that none of us has. And when I finish, I set that sucker down and just smile. Why? Because in its pages I see folks who are not only willing to fix that unblinking eyeball upon U.S. aggression and global exploitation, but who remain hopeful and committed to pushing against that very tide of violence, a tide that—in other publications—disguises itself behind pseudonyms like “development” and “democratic leadership.”
     The question is whether we place our energies with those who resist or those who would pretend that the will to domination has “good sides.” These days, such a paradigm is criticized as being too simplistic, too bone-headed. But that criticism is just one more smokescreen, one more effort to keep us disempowered, despairing or complacent.
     Naw, baby. You keep talking.
– Cindy Lutenbacher, Atlanta

uNCOVERING THE TRUTH is always perceived as “negative” because it requires pointing fingers and exposing people who lied or hid the truth. But it’s important to remain positive about what activists around the world are doing with the “negative” news. My reading is that people want to hear more good news about the struggle—for instance, the victory against water privatization in Cochabamba, Bolivia. Sometimes it’s demoralizing not to see the light at the end of the tunnel.
– Sergio Gaitán, Richfield, Minnesota

I get livid when people say we have to be “balanced,” “objective” or “more neutral”—as if the “other side” didn’t dominate what’s put out to the majority of the population and policy makers. I used to hear this criticism about our presentation of U.S. policy in Central America during the 1980s. At least we are up-front with our biases. And though it’s clearly painful to hear one’s country (Colombia) trashed all the time, does it really mean anything that Clinton dressed up in a straw hat for some poor kids from the coast? It’s another example of patronizing hypocrisy. What’s important is to offer the policy alternatives, which you usually do. Keep it up!
– Shelley Sherman, St. Paul

What We Do Next Time

David Stoll (“Facts and Truths,” January 2000) probably doesn’t need my help, but I’ll rise to his defense anyway. The review of his book, Rigoberta Menchú and the Story of All Poor Guatemalans, missed the point. I am grateful for the book not because I had to give up any “romantic notions about indigenous people’s revolutionary potential,” as the review describes Stoll’s intention, but because as an activist and a writer and editor, I need the lessons that are delivered clearly, if sharply, in the book. I, too, have presented the 1984 international bestseller I, Rigoberta Menchú to students more or less as fact; I was incorrect, and I need to learn from that mistake.
     Stoll is actually very sympathetic both to Menchú and her editor, Elisabeth Burgos. His criticism is aimed more at his own profession (anthropology) and at the rest of us who were in a position during the 1980s and 1990s to hear more complex, divided stories coming out of Central America but chose to hear and propagate only a few. We knew we were making hard choices. Stoll helps illuminate the choices so that we can do better next time.
     “In the name of human rights, ecology, and other important causes, well-off foreigners are stepping into complex local conflicts,” he writes toward the end of the book. He goes on to consider the Nicaragua work of Witness for Peace, in which I served two long-term volunteer stints in 1986 and 1989–1990, staying long enough to watch the Sandinistas lose the elections, to the collective disbelief of our entire organization. When Stoll points out how hard it was to keep Witness for Peace going after the clear loyalties of those years dissolved into the ballot boxes, he has my attention. I wish I could take back some of the hours I spent during the early 1990s trying to find a new direction, knowing the complexities of suffering but having completely lost my audience. Many AMERICAS.ORG visitors were in it with me, and this book is really about us, and about what we might do differently so that our movements become more sustainable.
     We face these issues again now—immediately, urgently—in Colombia, where our government has dug itself into a position I know I must publicly criticize. I do not know which side to take, but Stoll’s book suggests that that might not be, in the long run, such a bad thing after all.
– Anne Holzman, St. Paul

Women Need IUD Option

the article“Mexico Still Forces IUDs on Chiapas Mayans” (October 1999) oversimplifies women’s health care and family planning in the developing world. Clearly, any forced family planning should be universally condemned. But you fail to mention that most women desire spacing between their children, that voluntary family planning can enhance the physical, social and economic well-being of women, and that pregnancy carries far greater health risks than any form of birth control.
     While the author’s disdain for the Mexican Program for Education, Health and Food appears justified, given his experiences, I imagine there are many excellent Mexican health care providers working both within and outside the governmental system. Surely some of them make medical decisions based on the best interests of their patients, not only on reimbursement factors or quotas. Let’s not forget that quotas and reimbursement rates play an intricate role in the U.S. health care system as well.
     The article also includes at least one error. While it’s not a custom in the United States to place IUDs immediately after childbirth, the procedure is common in many parts of the world. And, according to the annual reference book Contraceptive Technology, it’s safe.
     While it may seem outrageous that one Chiapas hospital sterilizes 30 percent of women who give birth there, the U.S. female sterilization rate is 35 percent, according to Contraceptive Technology.
     Perhaps americas.org could investigate whether forced family planning is indeed a Mexican government strategy. Additionally, I’d like to see reporting on the positive efforts of Mexicans to improve women’s health care.
– Ann Dohrmann, Minneapolis
(The author, a certified nurse midwife at Regions Hospital in St. Paul, worked in Nicaragua with Witness for Peace from 1984 to 1986.)

Leach Bill Would Help

the section “Matters of Life and Debt” (September 1999) treated unfairly a coalition that’s been working since late 1997 on the Debt Relief for Poverty Reduction Act (HR1095), sponsored by Rep. Jim Leach, R-Iowa. Coalition members include Bread for the World, Oxfam America, Church World Service, the U.S. Catholic Conference, Catholic Relief Services and policy offices of the Presbyterians, Lutherans, Episcopalians and United Church of Christ. The coalition’s southern-country partners gave input on early legislation drafts.
     The bill’s most important element is the substantial debt relief it offers 45 low-income countries. It would cancel nearly 100 percent of debt owed to the United States. It would reduce debt to multilateral institutions such as the World Bank and IMF by redefining “sustainable debt” as no more than 10 percent of a government’s domestically generated revenue. Since debt service often consumes 40–60 percent of a low-income country’s government revenue (from all sources), this definition would make a tremendous difference.
     Another key piece of HR1095 is poverty reduction, an important element for our southern-country partners. The bill channels savings from debt cancellation into human development though a process involving participation and oversight by civil society organizations (development groups, teachers’ unions, farmer cooperatives and so on) working with their own governments. The bill not only helps address real needs of local communities, it strengthens civil society and participatory decision-making.
     Although HR1095 does not directly challenge structural adjustment (doing so would ensure defeat in the current Congress), it includes language to substantially change any continuing “economic reforms” and radically transforms the Highly Indebted Poor Countries (HIPC) initiative of the IMF and World Bank. It authorizes no funding for structural adjustment, only the funding necessary to implement the legislation.
     Furthermore, it reduces the HIPC waiting period (currently a minimum of six years of structural adjustment) to a maximum of three years of “economic and social reforms.” Most of the 45 countries would be eligible for debt cancellation in 2000. The debt cancellation, in turn, removes the leverage that multilateral institutions have used to force compliance with structural adjustment.
     The bill instructs the president, using the strongest language possible in foreign policy legislation, to work to achieve the reforms. To ensure accountability, the president must report annually to both the House Banking Committee and the International Relations Committee. The reports must also be made public, helping Bread and others in the Jubilee movement monitor progress.
     I would not be working for the bill’s passage if I believed that it advanced structural adjustment and further imposed the horrific conditions that killed my friend Rosa, left my friends Javier and Miriam powerless to treat people with malaria at their clinic, and pushed my friends Antonio, Raúl, Karen and so many others off their land so it could be used for export crops instead of food for local consumption.
     HR1095 is not the end-all-and-be-all. It does, however, take big steps that I believe will make a difference for the communities and people of the debtor countries. Too many of my friends have been sacrificed on the altar of debt. How many more people must be sacrificed before we take the first step
– Tammy Walhof, Minneapolis
(The author is the Midwest organizer of Bread for the World.)

To sound off on one of these threads or to start another, e-mail the forum. We’ll publish just about anything with a daytime telephone number and fewer than 300 words.