Wonder what happened to the Stockton case? The activists won, after all. A couple of months back, the Stockton City Council voted to end the Privatization Contract. Previously, two court rulings found that the deal 'violated the law'. Somehow, I'm not surprised, I had a feeling that they would pull it off eventually.
The end of the contract:
http://sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/08/05/EDC2RA7OG1.DTL
The first ruling:
http://www.arena.org.nz/water38.htm
The second one:
http://www.polarisinstitute.org/usa_judge_rejects_stockton_water_privatization_project
Friday, September 14, 2007
Saturday, September 8, 2007
"Eligible" Suicides.....
A few days back, an article got featured in "The Hindu" about the agrarian crisis in Vidarbha. The article was about Prime Minister's visit to Vidarbha last year where he announced relief packages for heavily indebted farmers. This resulted in farmers breathing a sigh of relief which unfortunately didn't stay for a long time. Suicides toll rose from 2,425 in 2005 to 2,832 in 2006.
And after 1 full year when PM arrived in Mumbai to review the situation, he was greeted with success stories. We should appreciate the Government's work as they are mentioning that only 836 suicides cases of "eligible" are being registered. If a whole family commits suicide, the suicide count would be increased by 1, no matter how many dependents were there in that family. If a farm was registered over a person's name during ancient times, and now if descendant of that person who is farming the land commits suicide would not be considered as a "genuine" suicide. In a district in Vidarbha, there were 30 suicides in July this year but not a single one was "genuine".
We cannot pinpoint the blame on one single individual or organization for the crisis. Leaving the protagonists apart, which include indebtedness, no monsoon, social evils, etc, an important role was played by lack of implementation of tons of planned/unplanned strategies.
The situation started aggravating in 2004 when the State Government cut down the prices of cotton by Rs 500 per 100 Kg which resulted in nothing but a huge increase in the no. of suicides.
I am ending this by a few suggestions which could upturn the crisis. The Govt should take some action to reduce the debt of the farmers, if can not make it zero, so that they would at least get relieved from the distressful present situation. Secondly, proper allocation of resources which includes distribution of money from relief packages, irrigation water, electricity, etc. Thirdly, proper implementable planning should be done to avoid such situations in future.
And after 1 full year when PM arrived in Mumbai to review the situation, he was greeted with success stories. We should appreciate the Government's work as they are mentioning that only 836 suicides cases of "eligible" are being registered. If a whole family commits suicide, the suicide count would be increased by 1, no matter how many dependents were there in that family. If a farm was registered over a person's name during ancient times, and now if descendant of that person who is farming the land commits suicide would not be considered as a "genuine" suicide. In a district in Vidarbha, there were 30 suicides in July this year but not a single one was "genuine".
We cannot pinpoint the blame on one single individual or organization for the crisis. Leaving the protagonists apart, which include indebtedness, no monsoon, social evils, etc, an important role was played by lack of implementation of tons of planned/unplanned strategies.
The situation started aggravating in 2004 when the State Government cut down the prices of cotton by Rs 500 per 100 Kg which resulted in nothing but a huge increase in the no. of suicides.
I am ending this by a few suggestions which could upturn the crisis. The Govt should take some action to reduce the debt of the farmers, if can not make it zero, so that they would at least get relieved from the distressful present situation. Secondly, proper allocation of resources which includes distribution of money from relief packages, irrigation water, electricity, etc. Thirdly, proper implementable planning should be done to avoid such situations in future.
Friday, September 7, 2007
Microfinance and Infrastructure
A short while back, Debopam had made a post on microfinance. In a recent issue of "Infrastructure Today", there was an interesting article on how microfinance had been used for a water supply project in Tirupathi.
There were 4 organizations involved - the government, microfinance institutions (MFIs), NGO's and the people in that area. The NGO's helped the people organize themselves into a SHG. The people then took a loan from the MFIs to build the project and the government provided skills training on construction, operation and maintenance.
Overall it was an interesting case on how microfinance could be successfully used to provide rural infrastructure. However, it can only work when the community has the resources to pay back the loan to the MFIs and therefore there should be an ability and a willingness to pay.
There were 4 organizations involved - the government, microfinance institutions (MFIs), NGO's and the people in that area. The NGO's helped the people organize themselves into a SHG. The people then took a loan from the MFIs to build the project and the government provided skills training on construction, operation and maintenance.
Overall it was an interesting case on how microfinance could be successfully used to provide rural infrastructure. However, it can only work when the community has the resources to pay back the loan to the MFIs and therefore there should be an ability and a willingness to pay.
Criticise or Privatize???
Since privatization seems to be the current hot topic, i thought i would share some of my HUMAN ideas here, in my first blog. What i mean is......no figures and analysis here, not yet...just opinions and feelings. I would then like to progress to actual analysis based on facts and figures in my future blogs. Any criticisms( especially negative) will be appreciated since i really want to understand this better.
The need for privatization was discussed at large in class. To summarize(just a few of them) had been:
1) the govt doesnt have enough funds to finance a lot of the infrastructure projects.
2)the govt has taken quite a sum as loans from financial institutions and,as such, is finding it difficult to repay the loans without taking on additional debts.
3)the already existing infrastructure requires maintenance...which in turn needs money.
No matter how we play it around, it all finally comes down to money. Its a lack of money thats making the govt think about bringing private players on to the field. In spite of the fact that it makes the govt look inefficient, the willingness of the govt to accept that such a situation does exist is credit worthy. Maybe experience, which can indeed be a bitter teacher, is what has made people wary of privatization. Most people equate privatization with economic divide. As most things,even though there is some truth in this, I personally believe that thats not entirely true.
Let me explain. We all agree that private players' motive(for the large part) is profit( money again). Now if I were to open my own establishment I would try to do 2 things(once the establishment is running smoothly):
Build a reputation and Expand my clientele.
Building a reputation is important only in the case of competition. Which is pretty obvious. Monopoly implies i dont have to work to build my clientele. They have no choice but me.
Expanding my clientele is important to me for the reason that, assuming man is a creature of habits, once he has decided on whose service he will use, my only option to make more
(of course) money is to make sure more people know of the service I am providing. This means I will try to reach the far reaches of the nation before my competitor does. Think telecom Given the competition is right, the service I provide will be cheap(if the technology is so widespread) which means that more people will be able to use telecom and because I want to reach them before my competitor the speed at which things progress will also increase. This technology would improve their business, bringing in...thats right....more money and so improve their lifestyle for the better. Given they have more money now(relatively) they can get choosy and that will make me improve my quality of service so that my clientele doesnt look for other options. In their own way both should be satisfied. This is a classic example of "you scratch my back and I scratch yours". Which, I believe, gives both the parties relief.And is not that what we wanted in the first place ...... greater good to more number of people???
Monopoly can mean 2 things
One that I have no competition, in which case, I am the only choice they have (whether my service is good or bad).The other is the time period for which I own the infrastructure in which case even if I have competition but the government has given me the ownership for a long period of time, I might just slack off. And in this case legally nothing can be done(unless the govt was intelligent enough to have an escape clause). In almost all the cases they do(cos believe it or not, the govt has intelligent people for the most part) and thats why all those legal papers have sooooo many sheets.
Ideally one would wish for no private participations. And that would mean to have an extremely efficient government. Given that the ideal situation does not exist what is the next best thing? privatization?? personally, i believe, its the best choice we have(next to only maybe PPP).
I feel its really selfish and narrow-minded if you feel that you cant handle the thought of few 'private' people making money out of doing something that would help society in some way, in any way. Do not forget its not easy and cheap controlling something as huge as infrastructure. So if some 'private' people(who are working their heads off) actually makes a little profit out of the whole thing along with making the life of some person (who was until then just a figure ..a number ...in one of the government papers) comfortable.... then please just think of their profit as their fee.
And if you dont like THAT idea....then the best thing instead of holding rallies and shouting and complaining would be to tell the govt a way( a feasible way) to get the country out of this rut.
P.S Dont forget the govt has done its homework much better than you or me since they have been around far longer than us.
The need for privatization was discussed at large in class. To summarize(just a few of them) had been:
1) the govt doesnt have enough funds to finance a lot of the infrastructure projects.
2)the govt has taken quite a sum as loans from financial institutions and,as such, is finding it difficult to repay the loans without taking on additional debts.
3)the already existing infrastructure requires maintenance...which in turn needs money.
No matter how we play it around, it all finally comes down to money. Its a lack of money thats making the govt think about bringing private players on to the field. In spite of the fact that it makes the govt look inefficient, the willingness of the govt to accept that such a situation does exist is credit worthy. Maybe experience, which can indeed be a bitter teacher, is what has made people wary of privatization. Most people equate privatization with economic divide. As most things,even though there is some truth in this, I personally believe that thats not entirely true.
Let me explain. We all agree that private players' motive(for the large part) is profit( money again). Now if I were to open my own establishment I would try to do 2 things(once the establishment is running smoothly):
Build a reputation and Expand my clientele.
Building a reputation is important only in the case of competition. Which is pretty obvious. Monopoly implies i dont have to work to build my clientele. They have no choice but me.
Expanding my clientele is important to me for the reason that, assuming man is a creature of habits, once he has decided on whose service he will use, my only option to make more
(of course) money is to make sure more people know of the service I am providing. This means I will try to reach the far reaches of the nation before my competitor does. Think telecom Given the competition is right, the service I provide will be cheap(if the technology is so widespread) which means that more people will be able to use telecom and because I want to reach them before my competitor the speed at which things progress will also increase. This technology would improve their business, bringing in...thats right....more money and so improve their lifestyle for the better. Given they have more money now(relatively) they can get choosy and that will make me improve my quality of service so that my clientele doesnt look for other options. In their own way both should be satisfied. This is a classic example of "you scratch my back and I scratch yours". Which, I believe, gives both the parties relief.And is not that what we wanted in the first place ...... greater good to more number of people???
Monopoly can mean 2 things
One that I have no competition, in which case, I am the only choice they have (whether my service is good or bad).The other is the time period for which I own the infrastructure in which case even if I have competition but the government has given me the ownership for a long period of time, I might just slack off. And in this case legally nothing can be done(unless the govt was intelligent enough to have an escape clause). In almost all the cases they do(cos believe it or not, the govt has intelligent people for the most part) and thats why all those legal papers have sooooo many sheets.
Ideally one would wish for no private participations. And that would mean to have an extremely efficient government. Given that the ideal situation does not exist what is the next best thing? privatization?? personally, i believe, its the best choice we have(next to only maybe PPP).
I feel its really selfish and narrow-minded if you feel that you cant handle the thought of few 'private' people making money out of doing something that would help society in some way, in any way. Do not forget its not easy and cheap controlling something as huge as infrastructure. So if some 'private' people(who are working their heads off) actually makes a little profit out of the whole thing along with making the life of some person (who was until then just a figure ..a number ...in one of the government papers) comfortable.... then please just think of their profit as their fee.
And if you dont like THAT idea....then the best thing instead of holding rallies and shouting and complaining would be to tell the govt a way( a feasible way) to get the country out of this rut.
P.S Dont forget the govt has done its homework much better than you or me since they have been around far longer than us.
Monday, September 3, 2007
Privatization :only solution
Hi everyone,
Following the discussion in class about pros and cons of privatization and public undertakings,I think some excerpts from an article by Naira Yakoob are worth mentioning.
Privatization means transfer of risk by the government or public sector to the private sector by giving up management control and usually ownership (at least majority shares) in an enterprise. It differs from commercialization as in this case the government retains business risk and ownership but makes changes in the way the company operates so that it runs on business principles. Privatization or de-nationalization helps to establish a capitalist economic system, competition, readily available products and services, high quality, more exports, better services, more opportunities, growth, etc. The primary objective of privatization should be to find the private owner who is most likely to improve the performance of the company. Due to the poor performances of our government-be it in the field of political governance, education, industry, etc., it becomes very important to resort to privatization of these institutions and systems. An example to support would be privatization of many companies producing consumer goods. People had to queue, sometimes for days, to get cement, rice, sugar, milk, etc. Now it’s readily available and at times maybe cheaper where competition prevails. Many of the improvements we take for granted now are the result of privatization.
In a set up or environment with a strong tradition of socialism and bureaucracy, the government's privatization program has always had its impediments. Generally, the government adopts, if it does, a very complicated privatization policy. They then use complicated procedure for selecting the owner, impose conditions on the management of the company, sell only part of the company to retain partial control or to intervene in management, restrict or prohibit foreign investment, sell the company shares to small domestic investors who have little ability to manage and so on. Special interest groups such as wealthy businessmen and ruling politicians usually pressure the government to keep the undertakings running that ought to be liquidated. Thus a large share of the State’s productive assets and work force remains locked up in inefficient and unprofitable companies. The reviving and awakening of the governmental units and institutions to the modern practices and modus operandi seems difficult or impossible. Efforts to improve the functioning of these institutions by the government may not be effective for many years. The point that even the private organizations in this State are not very well established or performing is genuine. But the blame can be placed mostly on the political governance- laws, policies, and institutions created by governments. What is needed is a change in the administration and management of the sick and bad-performing units. The reins should be handed over to the private organizations or individuals with competent and ethical management skills. A fresh approach is required- enterprise restructuring, privatization, and liquidation of non-performing and sick units or even commercialization for a start. What is important is that they should deal with competition and quality issues. The non-performing or sick companies can either be restructured or commercialized. However, at times selling organizational assets can be a better decision and hence liquidation can be resorted to. The best way to improve the performance of private business is to eliminate government barriers to competition like tariffs, licensing, legalities, and other restrictions. With the initiative to start up privatization in all government sectors, it will start a drive towards quality, competitiveness and high standards.
Following the discussion in class about pros and cons of privatization and public undertakings,I think some excerpts from an article by Naira Yakoob are worth mentioning.
Privatization means transfer of risk by the government or public sector to the private sector by giving up management control and usually ownership (at least majority shares) in an enterprise. It differs from commercialization as in this case the government retains business risk and ownership but makes changes in the way the company operates so that it runs on business principles. Privatization or de-nationalization helps to establish a capitalist economic system, competition, readily available products and services, high quality, more exports, better services, more opportunities, growth, etc. The primary objective of privatization should be to find the private owner who is most likely to improve the performance of the company. Due to the poor performances of our government-be it in the field of political governance, education, industry, etc., it becomes very important to resort to privatization of these institutions and systems. An example to support would be privatization of many companies producing consumer goods. People had to queue, sometimes for days, to get cement, rice, sugar, milk, etc. Now it’s readily available and at times maybe cheaper where competition prevails. Many of the improvements we take for granted now are the result of privatization.
In a set up or environment with a strong tradition of socialism and bureaucracy, the government's privatization program has always had its impediments. Generally, the government adopts, if it does, a very complicated privatization policy. They then use complicated procedure for selecting the owner, impose conditions on the management of the company, sell only part of the company to retain partial control or to intervene in management, restrict or prohibit foreign investment, sell the company shares to small domestic investors who have little ability to manage and so on. Special interest groups such as wealthy businessmen and ruling politicians usually pressure the government to keep the undertakings running that ought to be liquidated. Thus a large share of the State’s productive assets and work force remains locked up in inefficient and unprofitable companies. The reviving and awakening of the governmental units and institutions to the modern practices and modus operandi seems difficult or impossible. Efforts to improve the functioning of these institutions by the government may not be effective for many years. The point that even the private organizations in this State are not very well established or performing is genuine. But the blame can be placed mostly on the political governance- laws, policies, and institutions created by governments. What is needed is a change in the administration and management of the sick and bad-performing units. The reins should be handed over to the private organizations or individuals with competent and ethical management skills. A fresh approach is required- enterprise restructuring, privatization, and liquidation of non-performing and sick units or even commercialization for a start. What is important is that they should deal with competition and quality issues. The non-performing or sick companies can either be restructured or commercialized. However, at times selling organizational assets can be a better decision and hence liquidation can be resorted to. The best way to improve the performance of private business is to eliminate government barriers to competition like tariffs, licensing, legalities, and other restrictions. With the initiative to start up privatization in all government sectors, it will start a drive towards quality, competitiveness and high standards.
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