Nepali Times
Privatise, or else

I appreciated Bhagirath Yogi's article regarding privatisation of government-run enterprises ("Going to the dogs", # 124). My concern is that the debate was limited to the state's (in)ability to successfully carry out privatisation and did not address whether we as citizens are better off with privatisation to begin with. I am not opposed to privatisation per se. It could work in the case of Bhaktapur Brick and Tiles Factory since its efficacy is primarily restricted to the Kathmandu Valley and has competitors that prevent it from gaining monopoly. From a layman's perspective, the same could be true for the cement factories and other industries including the Janakpur Cigarette Factory (a despicable example of government ruining the health of its citizens). However, the situation is different for service entities like Nepal Bank, Rastriya Banijya Bank, RNAC and NTC. I believe the primary objective of the two commercial banks was to provide banking service to the Nepali people. At a time when there are a dozen or so private banks, it may be difficult for the residents of Kathmandu and other urban centres to see the relevance of these two. But it's worth considering that although private banks have been in operation for the past 18 years, their services are restricted to about 15 out of 75 districts. So, what's there to ensure that privatisation of these two banks will not essentially rob the majority of the Nepalis (who happen to live in the other 60 districts) of any banking facility?

The most egregious of all is the proposal to privatise the Drinking Water Corporation (DWC). The very outlandish notion that the state is willing to privatise as fundamental a natural resource as water, which is owned by its citizens, should fill us all with indignation. Even if Melamchi is the only solution to the scarcity of drinking water in Kathmandu, shouldn't there be concern regarding how privatisation of DWC could affect affordability of drinking water? By definition, private companies are accountable to their shareholders, not the general public and their objective is profit making, not public interest. In a scenario like this, isn't it conceivable that a significant proportion of the population may not be able to afford drinking water? Are there other options for those who can't? In most western countries including the US, municipalities, not private companies, regulate drinking water. Yet, we're presented with two stark choices-privatise or perish-as if there's no third option.

It should concern us that both the government and the donors are emphasising two solutions (privatisation and decentralisation) that are contradictory in numerous instances. How can you develop a place when you take away its only financial institution and make it further inaccessible? What's to guarantee that most of the districts will still have basic communication services when NTC is privatised? It's true that a number of state entities have problems that need immediate attention. However, proposing privatisation as the only solution in all cases is analogous to a physician prescribing antibiotics to any and all ailments. If mismanagement, inefficiency and corruption are grounds for privatisation, then I'm afraid the case is made for privatising the entire government machinery.

Kalyan Pande,
University of Wisconsin, Madison

(11 JAN 2013 - 17 JAN 2013)