Privatisation, remedy to poverty?

Public-private partnership (PPP) has been the latest mantra of development in the global economic landscape. Considering the recent government move, it is a very prudent attempt to embark on PPP. It has also become a fashionable slogan in the development strategies, particularly during the last couple of decades in many developing as well as advanced countries.

PPP is being adopted in a good number of economies in various infrastructure development sectors, such as the development of airports, railways, roads and recycling municipal solid waste. Sri Lanka is yet far behind in adopting the PPP strategy in providing public utilities. Government has to bear the burden of extra expenditure on behalf of the provision of public goods. At present, it is no longer confined to these sectors. It also has entered the sectors which had been areas of public monopoly for several decades, if not centuries. Education is one sector which had been confined to the exclusive jurisdiction of the state for long. But PPP is being extended to education, including elementary education, which is regarded as a universal human/fundamental right, and also other human development sectors such as health and even to activities relating to poverty reduction.

Recent experience has shown that the role of the private sector in sectors such as education and health has been producing mixed effects, more often negative effects on quality, equity and other dimensions of education, jeopardizing the well established goals of human development. Instead of direct provision by private sector, PPP is depicted as if it is different from privatisation, and as a viable strategy. This would minimise the adverse effects of private sector movement and strengthen the desirable effects of the role of public sector. Public service need to be strengthened in Sri Lanka. The government alone cannot provide everything at any cost. As responsible citizens private sector needs to tie up strategically in providing public service to the community.

There are many questions that need to be critically examined in this context.

What is public-private partnership? How does it work in the case of the education sector?

While examining the implications for educational development, it is also necessary to underline at the very outset that the education system in South East Asia, South Asia is more privatised than in many other advanced countries of the world, and the rate of growth of the private sector in education is increasing at an alarming rate.

Generally various models of PPP involve a formal contract between the government and the private sector to carry on some specific pre-defined activities in education, such as to set up new institutions, and/or to run the institutions, or carry on a particular activity in education – all financed by the state and/or through self-generated resources.

A typical model of PPP implies the private sector providing infrastructure and service delivery; it may also be responsible for designing, financing, building and ‘operating’; and it recovers its investment through lump-sum/annualised payments from the governments, and through user charges. Under the typical model, it shares risk with the state.

Areas that come under PPP

Areas that come under PPP might include almost every aspect of education, including policy making, formulation of plans, evaluation and implementation, ownership, management, funding, running of institutions, academic aspects, special education programmes, like bridge courses, teacher training services, extra academic aspects, examinations, including entrance examinations, support services, hostels, healthcare, transport, maintenance, security, and so on, though policy formulation is normally considered as an exclusive prerogative of the state.

Nowadays, the main objective of proposing PPP is to raise private funds and save public resources. The current widespread discourse on university-industry linkages is also found to be rooted in the same neo-liberal ideology (The private sector was also interested during the earlier periods for philanthropic reasons, purposes of charity and to provide education to the people for national development).

Make quick profits

On the other hand, private sector is interested in PPP nowadays essentially to make quick profits, treating education as a business. ‘For profit’ sector began to enter into education in a big way either formally as ‘for-profit’ entities or in the garb of trusts and foundations. Philanthropy has almost vanished in many societies. There is no regulatory framework to monitor the private higher education providers except the prevailing mechanism on providing degree awarding status to degrees. Board of Investment and Ministry of Higher Education need to come on to a common platform in preparing a mechanism to regulate private higher education providers to ensure the quality and result oriented higher education to the students community in this country.

Why PPP?

Strategy to tap untapped private financial and human resources

Since government does not have sufficient financial strength, it is necessary to opt for PPP. It is claimed that PPP will ease financial constraints, as the private sector makes huge investments on its own under PPP. As the private and public sectors complement each other, it is claimed, the total resource base will increase. The PPP is projected as a major strategy to tap untapped private financial and human resources, including specialized skills that may not be available in government and to encourage active participation of the private sector in national development.

With the increased resource base, there will be improved access to education and improvement in quality of education. In the absence of PPP, with limited public resources, education system might severely suffer.

It is claimed that the public system is inefficient; it is rigid and inflexible; it does not respond to market needs; it is not autonomous and so on. On the other hand, it is argued that PPP will provide flexibility in relaxing restrictions associated with the public sector, such as in the salary structure, recruitment policies, fees and resource mobilization and management and development rules (e.g., civil works).

It promptly responds to changing market signals in academic and other aspects; it even promotes innovativeness; and increases transparency. PPP increases competition, brings in efficiency associated with the private sector, improves accountability, reduces costs, improves cost-effectiveness, and thereby reduces prices or fees in education.

Tool for augmenting the public resource base

It is also assured by the government, to silence the critics that the major responsibility of providing education finally rests with the government that the government continues to remain accountable to the people for educating its citizens.

Governments further assure the people that PPP does not mean lesser provisioning of government resources; it does not mean abdication of government responsibility; it is not a transfer of responsibility; it is certainly not privatization of the sector; but is a tool for augmenting the public resource base.