Privatization Can Cause More Problems
Than it Solves - Lessons From Africa
OTTAWA - African community leaders caution Canadians
about privatization of essential services. Their experience
with privatization of water, electricity and health care,
often required by the World Bank as part of aid or debt
relief programmes, is that the problems in public sector
delivery have not been solved by the private sector, and
in some cases, have been worsened.
"The rationale for privatization is to improve service,
but in South
Africa, privatization of water has resulted in tariff
increases of 600 per
cent since 1996. In a country where the majority of people
are poor, this has resulted in less service, not more,"
said Richard Makolo from the Orange Farm Water Crisis
Committee of South Africa.
In South Africa, a number of residents who were not able
to pay soaring water bills were forced to go back to the
original sources, either the lake or the river. This resulted
in the worst cholera outbreak in South Africa's recent
history, which left 300 people dead from cholera - a water-borne
disease and about 350,000 people affected.
"The experiences in South Africa and other countries
are not unlike
Canada's early experiences with privatization", noted
Barbara Byers, Executive Vice-President of the Canadian
Labour Congress. "When maximizing profit is the prime
goal, not ensuring sustainability or equal access, rates
go up and quality of service can go down".
Hamilton, Ontario was the first municipality in Canada
to contract out
its water services. Since then, communities from Halifax
to Nanaimo have considered similar moves. The privatization
in Hamilton resulted in the worst sewage spill in Lake
Ontario in history.
"Governments are required by international agreements
and by national constitutions to treat citizens equally
and to fulfill a social contract to meet basic needs.
With privatization of essential services, it is impossible
to hold governments accountable", said Sylvester
Ejiofoh, General Secretary of a Nigerian trade union.
Mr. Ejiofoh and Mr. Makolo are in Canada as part of a
privatization tour, October 14-28th.
The Canadian Labour Congress, the national voice of the
labour movement, represents 2.5 million Canadian workers.
The CLC brings together Canada's national and international
unions along with the provincial and territorial federations
of labour and 137 district labour councils. Web site: