Anil Netto
PENANG, Jan 30 2006 (IPS) – Civil society groups worry that private sector interests will soon dominate the country s water and health care sectors and burden the public despite government assurances that these areas will be spared privatisation.
Authorities are busy revamping the way these two sectors are managed and financed, and the coming months will be crucial as blueprints and enabling laws are formulated.
Last June, following an intense civil society campaign, the minister responsible for water, Lim Keng Yaik, said the government had made an about turn and decided that total privatisation was not suitable for Malaysia. His remedy? We have cut out the word privatisation .
Similarly, senior health ministry officials have assured activists that there would be no privatisation in the proposed national health care financing mechanism which would allow the government to collect health insurance premiums from the public apart from exempted groups to finance the running of both public and private hospitals.
But while the government may be avoiding the word privatisation , civil society activists fear the end results of its roundabout plans may be no different.
We all know they are going to bring water under federal control (away from state control) and then privatise it, says Letchimi Devi, coordinator of the Oppressed Peoples Network (JERIT), which brings together 120 grassroots groups.
And when they say there will be a tariff review every three years, we all know tariffs will probably be increased.
Two draft bills the Water Services Industry Act bill and the National Water Services Commission (SPAN in Malay) bill are expected to come into force later this year.
Commenting on the former, the Edge business weekly said: The Bill s aim is to create a homogenous and holistic structure in water privatisation in all states. The key difference is that private operators will no longer be supervised by the respective state authorities. Instead, SPAN will monitor the operators after renegotiating their existing concession agreements.
Further, a new national water assets holding company (WAHCO) will be set up to buy up all existing water infrastructure. To be owned by the Finance Ministry, WAHCO will raise low-interest funds to finance the acquisition and the building of infrastructure, which will then be leased to state-owned or private operators.
Meanwhile, the states of Johor and Selangor as well as Kuala Lumpur have already privatised their water management. Another four states- Malacca, Negri Sembilan, Pahang and Perak have indicated they are going ahead with water privatisation, points out economist Charles Santiago, coordinator of the Coalition Against Water Privatisation (CAWP), whose anti-privatisation position has been endorsed by 126 civil society groups.
Several other states will be required to corporatise their water authorities.
Santiago is also concerned about the private operators requests for water tariff hikes based on claims of successful reductions of leakages (non-revenue water or NRW) achieved by replacing old pipes. He warns that these requests could be approved without thorough independent verification of the claimed NRW reduction.
As for health care, the authorities are believed to have short-listed consultants who will come up with a detailed blueprint for the national health care financing mechanism.
The health ministry has assured activists that it will closely monitor a proposed National Health Financing Authority, which will manage the national health fund.
This authority will function as a non-profit organisation and will not be privatised, health ministry director-general Ismail Merican told the Coalition Against Health Care Privatisation (CAHP) in a letter.
Still, the lack of transparency surrounding the designing of the financing mechanism has irked activists. They haven t allayed our fears, says Jeyakumar Devaraj, secretary of CAHP, which is backed by over 80 groups.
The CAHP received a reply from the government s Economic Planning Unit (EPU) on Jan. 27 saying they cannot release the terms of reference for the consultants they are appointing to design the mechanism because it is confidential .
If they are going to be so opaque now, then can we expect transparent behaviour when it comes to administering the fund, outsourcing services etc? Devaraj said. Each statement they make reveals their neo-liberal stance.
He pointed to several moves made since December 2004 to get patients to pay more for services. Among these were plans to privatise government hospital dispensaries and to make foreigners, including migrant workers, pay much higher first-class rates at government hospitals. The government also announced a federal budget strategy to put greater focus on health tourism .
More recently, the authorities have given the nod for its specialists to provide private treatment at government hospitals to supplement their relatively low incomes. The hope is that this would stem the brain drain to private hospitals.
The authorities are privatising the income generation/wage increases of doctors instead of increasing health budget allocations and paying government doctors more, grumbles Devaraj.
In both water and health care, activists are concerned about how the huge amounts of funds to be raised under the new mechanisms will be spent and which stakeholders corporate players or the public will benefit the most.
At a meeting with senior health ministry officials, CAHP representatives argued that the term stakeholders itself misrepresents the situation as not all stakeholders are equal. The needs of the one stakeholder the people should be the main determinant of any future health scheme, they said.
Santiago, for his part, is chaffed that private water operators will benefit from the low-interest funds raised by state-owned WAHCO. Why couldn t they have provided these low-interest funds to the state-owned water authorities (in the first place)? asks Santiago.
Another economist told IPS the terms of the lease (between WAHCO and the private operators) will now be crucial in protecting the interests of the public.
Adequate civil society oversight of SPAN and the national health fund will also be vital. The health fund is expected to handle 13 billion ringgit (3.5 billion US dollars) annually while WAHCO will handle billions more and both could turn out to be veritable honeypots for corporate players.
The economist said it appears that the authority managing the national health fund may outsource a range of services and become just a paymaster collecting premiums from the public and making payments out of the fund to the various service providers, including private hospitals.
He wondered whether there would be open tenders for contracts of services, pointing out that the track record of privatisation in Malaysia has been dismal. In Malaysia, profits are privatised and losses are socialised, he mused.
