Latin America: ‘Moral tribunal’ speaks out against privatizations

by Kintto Lucas

Quito, 30 Aug 2001 (IPS) -- Some 400 representatives of labour and civil society organisations from throughout Latin America established a “Moral Tribunal” against Privatizations during a three-day meeting that concluded Thursday in the Ecuadorian capital.

The forum named Rodrigo Carazo, former president of Costa Rica (1978-1982), as its chairman, and put the final touches on a report about the social effects of the sale of once-public enterprises in the region.

The executives of the tribunal include such Latin American personalities as Hebe de Bonafini, head of Argentina’s Mothers of Plaza de Mayo Association, Nela Martinez, of the Continental Women’s Front, and Luis Alberto Luna Tobar, former archbishop of the Ecuadorian city of Cuenca.

This panel of the Moral Tribunal is to meet periodically and in different countries in an effort to raise public awareness about the impacts of Privatizations and to promote actions aimed at halting the policy.

After reviewing the privatisation history of each country, the meeting’s participants voted unanimously in favour of a pronouncement to halt future sales of public entities and to demand sanctions for those responsible for the related policies. The delegates also committed themselves to fight to recover the firms that have already been transferred to the private sector.

Carazo told the forum that Privatizations have led to “the globalization of poverty.”

“In Costa Rica,” the former President of Costa Rica pointed out, “electrical services reach 97% of the population and communications services reach 96.5%.  These are in the hands of the state, which has permitted greater efficiency and economic benefits for the country.”

He also pointed out that the electrical sector constitutes “a brilliant business, one that provides great profits for the Costa Rican community,” and serves as a model that should be taken into account by other nations of the region.

The expansion of Privatizations has in many cases led governments “to quit governing” and to become “governments that face outwards.”

Bonafini, with her usual white kerchief over her hair, also criticised the privatisation trend, saying that “they are giving the public enterprises away and the money from the sales never benefits the people, but remains in the hands of those in political power.”

The human rights activist described the International Monetary Fund (IMF) as “voracious”, and that its pressure on the Argentine government to privatise has resulted in higher unemployment and higher rates for public services.

“Painfully, with the disappearance of our children (during the 1976-1983 Argentine dictatorship), we learned that to apply its economic plan, the military government found it necessary to kidnap, torture and kill those who opposed it. That economic plan is the same one being followed today with the Privatizations,” she said.

For her part, Mercedes Gutierrez, of the Venezuelan Workers’ Force trade union, reported that in her country, the sale of state-run enterprises had caused massive layoffs and a sharp rise in unemployment.

Participants in the three-day forum met with members of Ecuador’s Constitutional Court, which in the coming weeks must issue a ruling on a claim that the privatisation of the country’s electrical industry - proposed by the Gustavo Noboa government - is unconstitutional.

The forum’s delegates told the court that they support the legal petition against selling the shares of Ecuador’s 19 state-run electrical companies.

The authors of the legal claim are asking the Constitutional Court to confirm a ruling from last December, in which the justices stated that the government’s decision to privatise the sector violated the Constitution.

“The court must ratify that resolution,” particularly given the Noboa administration’s new privatisation attempts, stressed union leader Edgar Ponce, who also represents the Association of Ecuadorian Social Movements.

But the government insists that Privatizations will improve efficiency in energy production and distribution.

The head of the government’s National Modernisation Council (CONAM), Ricardo Noboa, the president’s brother, says that putting the energy system in private hands will allow 100% coverage by a service that today reaches less than 70% of Ecuador’s 12.5 million people.

He also said that private companies would improve the system’s infrastructure, eliminating the frequent blackouts that tend to occur during the October dry season, when low water levels affect the output of hydroelectric plants.

The government’s measure “opens the possibility for foreign investment, given that several US firms are interested in purchasing 51% of the companies’ shares,” said Ricardo Noboa.

Ecuador has 19 electrical companies, with 51% of their shares belonging to the Solidarity Fund, a public entity linked to CONAM, and 49% belonging to the municipalities and provinces of the areas covered by each company.

To facilitate the government’s privatisation efforts, CONAM has called for the mergers of several of these companies.

But many local governments run by leftist or centre-left parties are opposed to the sale of the electrical company shares that currently belong to them.

CONAM officials assert that privatisation is not unconstitutional because the companies would not be completely sold off, as only the shares corresponding to the Solidarity Fund would be involved in the transaction.

Ecuador’s electric companies in general do not operate at a profit, with the exception of those serving Azuay province, the capital of which is Cuenca.

Analyst Walter Spurrier, editor of the economic weekly ‘Analisis Semanal’ and a defender of Privatizations, explains that the government should raise electricity rates so that the companies are profitable because this would attract investment.

During the meeting of the Moral Tribunal’s delegates with the Constitutional Court, Carazo commented that there is a precedent for the unconstitutionality of Privatizations: a court ruling in Costa Rica prevented the sale of the state-run cellular telephone service.

“There are parallels between the two cases. This is not an ideological matter, it is a human matter, and as a result we hope that the justices’ resolution will be binding,” he said.

Bonafini expressed confidence that “there will be no privatisation in Ecuador.”

Eduardo Alcivar, representing the Electric Company of Quito, asked the Constitutional Court to “enforce its ruling from last December.”

CONAM has acted outside of the law in continuing with the privatization process, ignoring the decision of the court that monitors compliance with the Ecuadorian Constitution, Alcivar commented.

Doris Solis, representing the Association of Ecuadorian Social Movements, agreed with Alcivar, stating that CONAM “must comply with the law like all Ecuadorians.”

“We want to believe that the council is not above the laws of Ecuador and that President Noboa will obligate his brother to act within the Constitution,” said Solis. – SUNS4959

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