Consumers Domain
By Ian Seruelo

GATS: services in foreign hands

"Cast aside those who liken godliness to whimsy and who try to combine their greed for wealth with their desire for a happy afterlife."
— Kahlil Gibran

In December of this year, representatives from 147 countries will convene in Hong Kong for the World Trade Organization (WTO) Ministerial Meeting. A major topic of this meeting will be the discussion on the General Agreement on Trade in Services or what is called as GATS.

The GATS framework is the WTO's mechanism to open up the service industries of member countries to foreign control or ownership. GATS seeks liberalization in the service sector especially in the South countries (also known as the Third World ).

Discussions on this area started in 2001 and through this Ministerial Meeting, WTO hopes to expand the commitments of member countries thereby further opening up various industries classified under SERVICES to foreign companies and investors.

Industries such as media, transportation, advertising, telecommunications and many others are those that are classified by WTO under SERVICES. And the WTO wants even a broader coverage to include health, education, housing, postal services, waste disposal and public utilities such as water and power services which the Philippine government has already started privatizing.

Tsk.. tsk.. Can you imagine what it will be like if these industries be controlled by foreign corporations? Yes, maybe you will say, “well this will bring in cheaper, better and efficient services”. But think again, this mantra that all private-run services especially foreign-owned companies are efficient has long been debunked.

We have a rich experience on these in the water and power sector.

The Freedom from Debt Coalition (FDC) correctly pointed out that “when the government opened up the water sector to the private sector in 1997, it promised more efficient services at lower rates. Eight years after, water prices have increased tenfold, inefficiency in water delivery pervades, and a bankrupt private company continues to drain the public coffers.”

“On the other hand, power privatization resulted in continuous increases in electricity rates. The government pushed for a P1.87-per-kilowatthour rate increase in order to entice foreign investors to buy into Napocor's generation assets, with the Energy Regulatory Commission provisionally allowing Napocor to increase its rate by P0.98 per kilowatthour.”

“Aside from this, Napocor will impose another one-peso increase by May 2005 to recover costs arising from contractual obligations with the independent power producers. In all of these increases, end-users will be the one to bear the heaviest burden.”

Well aside from the issue on rates and efficiency, what strikes fear in me is the fact that when these important services is given to foreign control, nationalism and service to country is lost, all in the name of profit.

The moment these industries are privatized, accountability is already lost as the government practically abandons its role to ensure accessibility of these basic services to its population. What more, if the same services be given to foreign companies who neither have the sense of nationalism nor love for fellow Filipinos.

Now, according to FDC, the proposals submitted to the Philippine government by European countries, these new commitments under GATS will be requiring changes in the Philippine constitution, including and specially the provisions limiting foreign investment in the Philippines to 40% of corporate equity and prohibiting foreigners to own land.

With Pres. Arroyo's announcement that Charter Change is next in her agenda after VAT and other tax measures, we should be wary of what is in store for us after the WTO meeting in Hong Kong.

This column joins the rest of the peoples of South countries in the call to stop the privatization of services and public utilities, and to stop new commitments and the expansion of GATS.

Let us help stop this GREED from further eroding the quality life of human beings worldwide…

(For comments and suggestions, please email ianseruelo@yahoo.com or send SMS to 0919-348-6337.)