Privatization seems to be an ideal solution to our
problem in water. Providers compete in a race-to-the-bottom bidding making them
offer the best and most acceptable promises in improving our water service
delivery. While such promises were very enticing, they proved to be
superficial.
There are undeniable issues in privatization that
are being overlooked. In fact the side effects of privatization can lead to
more unfavorable outcomes for developing countries Philippines developing
countries and they may be worse off than before. Below are general issues that
can be observe in the privatization of our water sector.
Advantage
only to the advantaged. Although privatizing the water sector is intended
to benefit all citizens within the covered area, the reality is that the main
beneficiaries of the reforms are those that are well-off. Privatization has
resulted in increased cost in water of many Filipinos contradictory to the
promised decrease in water bills.
The poor are at the disadvantaged end since the
service is delivered at a higher price laying greater burden on them.
Shift in Values. Privatizing public services, critics claim,
undermines public interest in favor of economic gains. This happens because
providers are at the natural tendency to maximize their profits. Hence, values
such as quality or customer satisfaction maybe overlooked. This very true in
the case of our water sector. Since water is a necessity, the demand is
relatively price inelastic and people will continue to consume anyway. Hence,
private concessionaires, in attempts to maximize profits will increase their
prices knowing very well that demand will not be decreased.
Centralization of decision-making. Under traditional public service delivery, the
people are being involved in the identification of their own needs and in the
planning and design of the services they need. However, with privatization,
people’s participation becomes unnecessary. This is because the provider is
using its own resources to operate and thus solely responsible for its own
self. Again, this characteristic of privatization undermines public
interest.
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