At your Service. The Global Sell-Out of Public Services

At your Service. The Global Sell-Out of Public Services

Campaign "The Netherlands in Europe, Europe in the World"
Working Group EU Presidency 2004
23 November, 10:00-22:00, Felix Meritis, Keizersgracht 324, Amsterdam
Organised by TNI, Wemos and Wise on behalf of the GATS-Platform

Click here to see the programme - Programme in PDF format

If you want to attend the seminar please register before 22 November - Online registration

Information in English - Information in Dutch

Within 10 years of its adoption the General Agreement on Trade in Services (GATS) has become one of the most controversial elements of the international trading system. The GATS is an international trade agreement that came into effect in 1995 and operates under the umbrella of the World Trade Organization (WTO). The aim of the GATS is to remove all barriers to trade in services. The agreement covers services as diverse as education, water, energy, healthcare, rubbish collection, tourism or transport. The idea is to open up these services to international competition, allowing the way for huge, for-profit, multinational firms.

Since February 2000, negotiations are underway in the WTO to expand and 'fine-tune' the GATS. These negotiations have aroused concern world-wide. A growing number of local governments, trade unions, NGOs, parliaments and developing country governments are criticising the GATS negotiations and call for a halt on the negotiations.

The supply of public services is often the necessary basis for a democratic and open policy-making process in a country, most obviously in the cases of education, water, health care and energy. Access to services such as water and health care is a human right. Given their central importance to democratic and social integrity, governments should be free to choose methods of supplying public services so that all members of society have access to them at affordable prices. The threat of GATS is that it may effectively limit policy choices, make the provision of public services more difficult and negatively impact on universal access to services.

The poor lose out

The GATS liberalisation agenda threatens access to essential services. If multinationals are seeking to make a profit out of water, health and education, those without purchasing power are likely to lose out. Recent water privatization in Manila has meant that poor communities have gone without water and the prices have six folded. A system governed by people's ability to pay will not bring desperately needed services to the world's poorest people.

No return

Moreover, the irreversibility of GATS will ensure that once governments have opened up particular service sectors to WTO rules, there is no going back. The decision of how to organise service delivery is effectively being removed from the political arena. In future, citizens might no longer have the democratic right to decide whether or not services should be regulated.

The incoherence of GATS and Development; jobs, jobs, jobs, for whom?

The crucial importance of the GATS for the European Union is seen in the preservation and creation of jobs, as reiterated continuously by the European Commission. However there is concern among NGOs that this will be at the expense of jobs and sustainable livelihoods in the South.

The European Union Treaty has a provision that European policies with an impact on developing countries need to take development policy objectives into account. The EC requests for liberalisation in services to developing countries are specifically focused on three areas:

1. that developing countries give up their right to require foreign investors to employ local people at managerial level;
2. that they give up their right to require foreign companies to form joint ventures with local companies;
3. that they give up their right to restrict foreign investors from owning land in the country. By giving up these rights developing countries give up the conditions that are necessary for Foreign Direct Investment to be beneficial to the sustainable development of their countries.

The EU and Bolkenstein's Services Directive

Access and affordability of public services are also under threat in the EU. In the Netherlands the liberalisation of public transport already proved a failure, with reduced services, higher prices and underinvestment in the necessary infrastructure. At the same time, the opening up of the energy market has not led to reduced prices and better services. And commercialisation threatens to create a divide in health care and to erode the education system.

The EU is propagating a further opening-up of the European services sector, not just within the WTO, but also at home. The EU Services Directive intends to create a fully liberalised services market in the EU territory, alongside of even ahead of the GATS schedule. The Services Directive bears many similarities to the GATS-agreement. The introduction of the Directive is one of the priorities for the Dutch EU-presidency.

Should the directive be passed in its current form, it will become much more difficult for the EU member states to set out rules and regulations for foreign service suppliers, including in terms of professional qualifications and terms of establishment. Wage levels, working conditions and social provisions are under threat, particularly in countries with above-average standards.

The Services Directive will apply to virtually the entire range of services. Even the water supply, sanitation and sewage, waste disposal, the services of housing corporations and parts of the higher education system will fall under the scope of the services directive.

Civil servants from the Dutch Ministry of Economic Affairs have indicated that a successful liberalisation of the services market within the EU territory may well form a stepping stone to introduce competition from outside the EU and bring these sectors under GATS at a later stage.

Alternatives

In many cities in the South public utilities fail to deliver. It is a fact that services have been undermined by decades of insufficient investment, in many cases as a result of crippling foreign debt and disastrous structural adjustment programmes, imposed by the IMF and the World Bank. State-run utilities in many cities deliver services to rich neighborhoods, home to powerful local elites, while failing to provide to the poorest, especially those living in remote and informal urban areas. In any case, years of low-standard services has left many people disillusioned. This is one reason why there is often a fertile ground for proposed privatisation in the South.

Luckily, there are more viable and attractive alternatives to inadequate state-run utilities than handing over the keys to profit-seeking private corporations. Dramatic improvements in public service delivery have been achieved in both North and South, often within a few years, through various forms of public utility reform.

To conclude: The global sell-out of essential public services should be stopped. Access for all should prevail above profit-making principles. Social targets should always be placed above commercial interests in order to really work "at your service"!

Programme

10-12.30

Morning session: Introducing the Issues

Impacts of Services Liberalisation and Privatisation in Water, Energy and Health Care: Depriving People of Basic Human Rights

Three case studies

• On water: Mary Ann Manahan, Bantay Tubig, Philippines
  Bantay Tubig is a citizen's coalition for adequate accessible and affordable water in the Philippines. Organised in April 2002 in response to the worsening water crisis in the country, Bantay Tubig started as a collaborative effort among civil society organisations. It monitors price increases, regulatory processes and the performance of water companies in Metro Manila.
• On energy: Raul Montenegro, Argentina
  Montenegro is an ecological scientist and activist. For his successful campaigns on a wide range of environmental issues - including the fight against the dumping of nuclear and other toxic waste and for ecologically sound water management - he has received the 2004 Right Livelihood Honorary Award. The jury of this 'Alternative Nobel Prize' honours Montenegro "for his outstanding and wide-ranging work with local communities and indigenous peoples to protect the environment and conserve natural resources in Latin America and elsewhere".
• On health care: John Kinuthia from Consumers Information Network, Kenya
  Consumers Information Network of Kenya is an independent national consumers organisation founded and registered in Kenya in 1994 with a mission of empowering consumers through education, promotion and advocacy of basic consumer rights. The main objective is to protect consumer rights and promote consumer responsibility. Owing to the diverse nature of consumer issues, CIN works mainly in the areas of health, trade, food and environment.

GATS: Threat to Development and National Sovereignty

Clare Joy of the British World Development Movement on the global, corporate-driven services liberalisation agenda; the looming irreversibility of privatisation experiments through a permanent lock-in under the GATS agreement and the erosion of governments' policy-making freedom, pro-poor politics and universal accessibility in essential public services.

12.30-14.00 Lunch

Afternoon session: Alternatives

14.00-15.30

Alternative Ownership and Finance: Experiences from the North and from the South

Attracting private capital is propagated by international financial institutions and neo-liberal governments alike as the best way to raise the necessary funding to boost failing public services. But the introduction of profit-making principles conflicts with social targets, such as universal accessibility and affordability. Are there effective, democratic and equitable alternatives to privatisation? Can innovative participatory policies, social control and community management models offer the instruments to re-establish social targets and reclaim our essential public services?