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The IMF and the Great Privatisation Swindle


Pat KennyThe day after the publication of the so-called Memorandum of Understanding between the Dublin government and the IMF/EU, RTÉ’s Pat Kenny chose to lead his current affairs radio show with a half hour slot upbraiding and demonising public sector workers.

The immensely wealthy Kenny and the not so intrepid reporter Ingrid Miley reeled in horror at the discovery of a devious plot by low-paid public sector workers to cause economic carnage by availing of a long standing agreement to take one half-day per year to engage in a spot of Christmas shopping. To listen to the RTÉ pair one would be mistaken for believing that it was the half-day Christmas shopping that beggared the nation and not, in fact, the low tax and deregulated financial regime imposed by consecutive Fianna Fáil governments, or the hundreds of billions gambled and lost by bankers and developers, or, indeed, the tax dodging by multinational corporations and wealthy individuals.

Not satisfied that public sector workers have already taken a 15 per cent pay cut, that 27,000 will lose their jobs over the next four years and that pensions have been slashed, media figures such as Kenny and his cohorts in the Sunday Independent will not rest it seems until public sector workers have been driven into a state of destitution. Kenny, a staunch defender of the ‘free market’ who bags almost €1 million [£850,000] per annum from the public broadcaster, seemed reassured that the IMF was here to impose some free market discipline upon the workers and to threaten them with further pay cuts and job losses if they do not acquiesce.

There is a serious intent behind the ceaseless attacks upon public sector workers and their unions. Advocates of the market are given regular and unchallenged slots on the state broadcaster to ceaselessly spout the message that the economy needs to return to ‘competitiveness’. In other words, workers must take a pay cut and work even harder in order to improve the rate of profit for the bosses.

By constantly belittling, demonising and scapegoating public sector workers and their unions, the establishment also seeks to undermine the confidence of all workers and to drive home their message that competition is the driving force of society. According to the market philosophy, decent pay and conditions, trade union representation and universally accessible public services are a barrier to the free flow of competition, which is, after all, the lifeblood of capitalism.

That this philosophy provides the cornerstone of the IMF’s Memorandum of Understanding with the Dublin government should not, therefore, be of any great surprise. Notwithstanding the utter devastation that this economic system has wrought, its incessant crises and disastrous policies; capitalism is made to seem like the only show in town. The capitalist vulture is now circling over the carcass of the Twenty-Six County economy, ready to swoop upon all public assets.

Dressed up in the oblique language of the technocrat, the Memorandum announced the proposed sell-off of public assets and the surrendering of control over both our energy and water supply in the following terms: “Any additional unplanned revenues must be allocated to debt reduction.”

IMFIn addition, by 2012, there will be an independent assessment of electricity and gas sectors. In other words, profitable, publicly-owned companies such as ESB, Bord Gáis and An Post will be privatised and the public water supply commodified in advance of its eventual sell-off.

There is an added sting in the tail. Appalling as these proposals are, the fact that any monies raised will be used to bail out the banks represents the final sell out of the interests of the Irish people to the demands of a powerful elite. ESB, Bord Gáis, An Post and port companies all provide important dividends to the public coffers and all are of strategic importance in the planning of the Twenty-Six County economy.

Yet, in the narrow world view of the free marketeer where competition is worshipped, publicly-owned is shorthand for ‘inefficient’. Await the corporate media and establishment onslaught against the likes of ESB and Bord Gáis as ‘monopolistic’ and ‘inefficient’ and of the ‘need’ to introduce competition into the energy market in order to encourage investment into the economy.

Meanwhile, Pat Kenny will have a field day denouncing how domestic households are ‘wasting’ water and how ‘market efficiencies’ will train the plebs to conserve water. All of which is absolute nonsense but it will not stop the maniacs from flogging a dead ideology.

Indeed, these Structural Adjustment Programmes are an essential component in the armoury of the IMF and have been deployed with devastating effect around the globe. Placing essential public services and utilities into the hands of private corporations whose sole concern is ‘shareholder value’ has proven disastrous for those countries subjected to the IMF’s weapons of mass destruction. Denial of access to water, massive increases in utility bills to householders, job losses and a general deterioration in service has been the common experience of those exposed to ‘market efficiencies’.

A review of these programmes, carried out over four years from Asia to South America, concluded that “adjustment policies contributed to further impoverishment and marginalization of local populations while increasing economic inequality”.

Further examples demonstrate that privatisation has little to do with the public interest and everything to do with private profit interests. In South Africa, 25 per cent of the country’s 44 million people had their water and electricity disconnected after the service was privatised, while, in Mexico, between job losses and anti-trade union practices, membership of the rail workers union fell from 90,000 to 36,000 in the 1990s after private owners took control. In Britain, the privatisation of the water service created a profit boon for investors and company executives. Between 1989 and 1995, there was a 106 per cent increase in water rates and a 50 per cent increase in service disconnections, while company profits soared by 692 per cent and salaries for CEOs increased by 708 per cent.

Colm McCarthyThis is what the future holds for working people in the Twenty-Six Counties if the Dublin government and IMF are allowed to proceed with this insane plan. The Dublin government has already appointed Colm McCarthy, its own personal hatchet man and author of the infamous McCarthy Report, to chair the Review Group on State Assets and Liabilities. This body, while having a rather innocuous sounding title, has a very specific and destructive remit, which is to asset strip and sell-off public companies. Its terms of reference are very specific in this regard: “To consider the potential for asset disposals in the public sector, including commercial state bodies and to draw up a list of possible asset disposals.”

The disastrous decision to sell off Telecom Éireann in 1999 provides a salient lesson in the madness of privatisation. From being a profitable, publicly-owned and strategically important company, the newly privatised Eircom was asset stripped by a host of international venture capitalists, shed thousands of jobs, built up massive debt and failed to invest in telecommunications infrastructure.

Having passed through the hands of various corporate parasites, including Tony O’Reilly, the company was acquired last January by Singapore Technologies Telemedia for just €140 million [£119 million]. To put that figure into context, when shares in the company were first floated in 1995, a Dutch and Swedish consortium acquired 20 per cent of the company for €232.2 million [£197.4 million], which, back then, was considered well below its actual value. The company currently has a crippling debt of €3.5 billion [£3 billion] and is seeking to shed a further 2,000 jobs.

While companies such as ESB and Bord Gáis are bureaucratically run, with senior executives paid enormous salaries, the answer is not to offer these companies up to the social cannibals of the ventures markets. Domestic and international experience has demonstrated that privatisation works only in the interests of the wealthy.

Determined resistance in Ireland will be required to maintain these companies in public ownership. In 1985, the Bolivian government was forced to swallow the IMF ‘antidote’ of structural adjustment programmes, resulting in massive job losses, growing unemployment and rising prices. With little money to invest in infrastructure and under pressure from international agencies to privatise public services, in 1999/2000 the Bolivian government attempted to sell-off the water supply and signed a 40 year contract with private water company Aguas del Tunari to supply water in Cochabamba, the third largest urban area in Bolivia with a population of over one million. The contract with the government guaranteed the company on average 16 per cent rate of return per year on its investment, while bills to domestic users rocketed by as much as 300 per cent. Factory workers, peasants, trade unionists, environmentalists and community activists mounted stiff resistance and, while facing state violence, organised mass actions, demonstrations, blockades and occupations that finally overturned the privatisation deal, marking the first reversal of the IMF’s neo-liberal experiment in Bolivia since 1985.

While the coming election in the Twenty-Six Counties might change the deckchairs in Leinster House, driving the IMF out and defeating the great privatisation grab requires a much more fundamental change; change that Leinster House is incapable of delivering. Failure to resist the IMF and the privatisation agenda will enslave this and future generations. The stakes are that high.


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