[governance] [JNC - Forum] On the death of neo-liberalism

[Michael Gurstein]

Clearly there was a need in the telecom sector to clear out the cobwebs (and the corruption) particularly given the technology innovation which was happening at the time.

 

However, the question is whether there was the need for the cookie-cutter neo-liberal approach to how it would be done and particularly how the sometimes nascent, sometimes real social benefits of telecom might be translated from the PTT era to the liberalized telecom era.

 

I've never seen this documented (a MA or Ph.D. topic for someone?) but it has been quite clear based on my direct experience with post PTT telecom policies in perhaps a dozen countries that the policy apparatus implemented at the insistence of the World Bank was directly of the A4AI persuasion <https://gurstein.wordpress.com/2016/04/05/the-a4ai-discussion-a-summation/>  i.e. a neo-liberal package wrapped up in high-faluttin social contribution rhetoric.

 

The reality is that virtually all of the LDC's with which I had contact were effectively tied up in knots because of the way the privatization policies had been written (presumably by one WB designated law/consulting firm).  In every instance a portion of telecom revenues (sometimes gross sometimes (after convoluted calculations) net) were directed to be made available for extending telecom service -- as designated Universal Service programs.  However, these policies were written in such a way that these designated revenues rather than being made available to the state for utilization for this purpose were rather defined as revenues of the telco's which they were graciously making available for social benefit under state direction.  What that has meant in practice is that the telco's have a veto on how this money is spent even though they have no knowledge or interest in achieving any such social benefits.  Note that we are talking about very large sums of money into the $hundreds of millions and even low billions USD in some cases.

 

The result of this neo-liberalized mess is that in many cases the money cannot even be spent, or if spent is being spent on useless marketing efforts as defined by the telcos, or spent to subsidize additional infrastructure where either no additional infrastructure is necessary or where it simply is a substitute for a commercially justifiable infrastructure.

 

I can't answer whether or how much "a competitive market economy has ... to offer for development" but I do know that the activities of a neo-lib dominated WB made precious little contribution to resolving issues of digital exclusion in much of the LDC world through its imposed privatization program.

 

M

 

-----Original Message-----
From: governance-request at lists.igcaucus.org [mailto:governance-request at lists.igcaucus.org] On Behalf Of Mueller, Milton L
Sent: June 1, 2016 9:12 AM
To: governance at lists.igcaucus.org; Anriette Esterhuysen <anriette at apc.org>
Subject: RE: [governance] [JNC - Forum] On the death of neo-liberalism

 

> -----Original Message-----

> From:  <mailto:governance-request at lists.igcaucus.org> governance-request at lists.igcaucus.org [mailto:governance- 

>  <mailto:request at lists.igcaucus.org> request at lists.igcaucus.org] On Behalf Of Anriette Esterhuysen

> 

> Market-fundamentalist approaches to development and planning will stay 

> around for a long time. They fit so well with the culture of 

> corruption and focus on personal gain that many governments are 

> practicing that it will be really hard to get rid of this approach - even if it is not explictly part of policy.

 

This is not a very accurate statement, Anriette

 

Corruption is strongly associated with state-control and licensing of industries. Take a look at Brazil's current drama with its state-owned oil company. Or, worse, Venezuela. Entities not subject to the discipline of market forces are far more likely to rely on privilege and corruption to get things done. 

 

It's odd that you call market liberalism "market fundamentalism." While it is true that some simple-minded folks turned liberal political economy into a formula/dogma, sometimes misapplied, what I see MUCH more often is that opposition to market forces among certain civil society groups is religious and fundamentalist. It is knee-jerk and not based on any empirical facts or understanding of economics. 

 

At any rate it's hard to argue with the record of liberalization in telecommunications and information. Unless you want to go back to those wonderful days of state-owned monopolies, 2% penetration and 4 year waiting lists for a line. The state-owned PTT is the epitome of a non-neoliberal approach so I hope you are willing to stand up for that paradigm or if not, bite the bullet and admit that a competitive market economy has much to offer for development 

 

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