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Growing protests threaten Thai government’s
privatization plans
Compiled by John Lapp
Mar. 15 (AGR)— A continuing wave of protests against the
privatization of Thailand’s state-run power utility is becoming
a formidable test of the government’s policy to sell some major
state enterprises to private investors.
“Will we go for privatization? NO!”
“Will we sell? NO!” “Selling water and electricity is
like killing all Thai’s!” “How many of us here? 100,000
people!”
These were the words chanted by tens of thousands of workers in front
of the Government House of Thailand from noon to evening Mar. 5, which
became the biggest protest that Prime Minister Thaksin Shinawatra faced
since taking office in early January 2000.
Workers from the Electricity Generating Authority of Thailand (EGAT),
members of all State Enterprises Labor Relation Confederations, workers
from private sector unions, activists, and the general public gathered
for the biggest anti-privatization protest to date in the three-week-old
confrontation in Thailand. Protesters gathered in front of the Government
House to show the Thaksin government the depth of workers resolve to
make their voices heard.
By the end of the week, union leaders of the EGAT were threatening to
bring close to 100,000 labor and other activists outside the prime minister’s
office to show their opposition to the privatization policy.
The Thaksin administration also suffered a major loss of face following
a decision by the country’s revered monarch, King Bhumibol Adulyadej,
to delay endorsing a bill to open the way for the dissolution of EGAT.
The plans affecting EGAT are part of the government’s measures
to transform six leading state enterprises into private entities this
year, followed by three more in 2005. The sale of state enterprises
is among conditions imposed on Bangkok as part of the bailout package
that the International Monetary Fund (IMF) offered in the wake of Thailand’s
1997 financial crisis.
The agencies billed for privatization this year include the Metropolitan
Electricity Authority, the Mass Communication Organization of Thailand,
the Government Pharmaceutical Organization, and the Metropolitan Waterworks
Authority.
The first state venture to be sold was the Petroleum Authority, followed
by the Airport Authority and the national carrier, Thai Airways.
Critics and EGAT unionists cite the case of Petroleum Authority as an
example of how not to privatize: in some 70 seconds, the lucrative shares
that were sold when the authority went private were gobbled up by a
privileged few.
“The record of privatization we have had is not good; there is
no model for EGAT to follow,’’ adds Somboon during an interview.
“When you privatize, you create a private-sector mafia that will
make huge profits from share prices, as we saw with the sale of the
Petroleum Authority.’’
“It is not a free market. The price depends on political objectives
than economic factors,” Somboon continued.
Natural gas is the dominant energy source in the country, followed by
hydroelectricity and then oil. Thailand’s energy consumption is
estimated at 1.352 kilowatt-hours of electricity per capita.
A poll conducted by Bangkok’s Assumption University about the planned
privatization of EGAT confirms how unpopular this move has become. An
estimated 73 percent of 1,147 people surveyed in Bangkok said they think
the planned sale of EGAT was not transparent.
Furthermore, 83 percent said they were happy with the current power
services and 55 percent feared the emergence of a private power monopoly
— views that should strengthen the cause of the protesting EGAT
and other state-enterprise unionists.
Junya Yimprasert from Thai Labor Campaign shared the situation of privatization
in other countries with the demonstrators and stated that “the
government claims that the reason to privatize EGAT is because it is
inefficient. For the part 35 years, there has been no big blackout in
Thailand, unlike New York, Brazil, South Africa, and New Zealand where
blackouts are common in those and other nations where private corporations
run energy sectors. So what is inefficient?” She added that stopping
energy production during time of peak demands to increase prices, as
has been the case in New Zealand in winter, is not trade but a crime.”
After hours of negotiating inside parliament, union representatives
emerged with a small victory. The government agreed to postpone the
planned privatization of the EGAT. Many see this as a political ploy
by the Shinawatra government, seeing as how he is going up for re-election
in early 2005.
“In the past he rushed the privatization in order to keep the equity
market moving... but I think he realizes this could be a big mistake
and could jeopardize his political future for the next election,”
said Teerana Bhongmakapat, an economist and former government advisor.
Sources: Agence France-Presse, Asian Labor
News, Bangkok Post, Inter Press Service, Thai Labor Campaign, VOA News
Global supermarkets elbow aside small
farmers
By Emad Mekay
Washington, DC, Mar. 12 (IPS)— Large supermarket chains
from rich nations that are mushrooming fast in Africa, Asia, and Latin
America are locking small farmers out of their supply chains, a situation
that threatens to put millions of already impoverished US small-scale
producers out of business, says a think tank.
According to the Washington-based International Food Policy Research
Institute (IFPRI), developing countries that liberalized their economies,
opening their doors to supermarket chains that compete against traditional
food markets, have seen their small farmers drop into poverty as the
giant retailers buy from more reliable larger producers.
Small farmers in Latin America, Africa, North Africa, the Middle East
and, to a lesser degree Asia, have been hit hard.
“Apparently in much of Latin America the fast growth in the supermarket
and the retail food industry, to speak more broadly, has bypassed the
small farm sector,” said IFPRI Director Joachim von Braun.
“This is due to bad infrastructure and insecure contracts and the
more competitive medium and large-scale farming industry.”
In the 1990s, as many supermarket chains in Europe and the United States
found their domestic markets saturated, they raced to get footholds
in the developing nations then liberalizing their economies.
Often cash-strapped, those countries were forced to open up under loan
conditions imposed by international lenders like the World Bank and
the International Monetary Fund (IMF), which bombarded poor nations
with a barrage of economic advice, such as removing protectionism and
welcoming foreign investments, they said would eventually pay off for
their populations.
Supermarkets quickly moved to fast-growing countries with large populations,
per-capita incomes that were edging toward those of consumer societies,
and those with a low supermarket presence.
Like consumers in industrial countries, shoppers in those developing
nations are avoiding open-door markets and small, specialized grocers
for the convenience, quality, and attractiveness of one-stop shopping.
The fastest-growing supermarket chains across the globe include Carrefour
from France, Wal-Mart from the US, Ahold from the Netherlands, the UK’s
Tesco, and Shoprite of South Africa.
The advent of the supermarkets, with their global procurement systems,
has proven disastrous for small producers and dairy farmers in developing
countries, who usually deliver their goods directly to open markets
or to local wholesalers using their own vehicles.
As part of their operations, supermarket chains often establish centers
that procure goods for dozens of stores at one time. Such hubs are often
equipped to handle large volumes of consistently high-quality goods.
Small farmers vying to sell to those supermarkets often have to grow
what the retailer wants, not what they choose, a dramatic change from
ordinary practice. Even when they produce what supermarkets want, farmers
risk a large part of their produce being rejected because of sub-standard
quality.
If farmers manage to sell their goods to the food giants, they can end
up having to wait 60 days or more to get paid, which places yet another
burden, a financial one, on their production cycle, says IFPRI.
To complicate the process for small farmers, multinational supermarket
chains often use a single set of quality and safety standards for fresh
produce, based on standards in their home market. For instance, Carrefour
applies the same standards to hundreds of products, no matter where
they are produced or sold.
The report says that tens of thousands of small dairy farmers, in particular,
cannot afford the investments in equipment they need to be able to sell
to the supermarkets.
The chains require mechanical milking equipment, cooling tanks, and
ultra-high temperature treatment, demands that can close small farmers
out of the supply chain, it adds.
In such cases, supermarkets turn to the more reliable large farmers
or farmer organizations.
The process is best seen in Latin America, according to IFPRI. “The
story in Latin America is, I am afraid, to put it simply, a bad story,”
said von Braun.
Latin America has seen the fastest growth of supermarkets among developing
regions, achieving “a rate of diffusion in one decade that took
five decades in the United States.”
In Brazil, for instance, supermarkets’ share of food sales went
from 30 percent in 1990 to 75 percent in 2000. And the growth has been
striking even in Latin America’s poorer countries. Market share
for supermarkets in Guatemala rose from 30 to 35 percent between 1999
and 2001, according to IFPRI.
East and Southeast Asia are about five years behind Latin America, but
supermarkets in that region are growing at an even faster pace.
Between 1999 and 2001, supermarkets’ share of retail food sales
rose from 35 to 43 percent in Thailand and from 30 to 48 percent in
urban China.
The huge stores still have a relatively small, but growing, presence
in Africa, where the largest food retailer is Shoprite, a South African
company that has opened outlets in more than a dozen countries, including
Egypt, Angola, Ghana, and even India.
More bad news could be on the way for smaller farmers across the globe.
With populations, incomes, and urbanization all projected to rise in
developing countries in the next 10 to 20 years, supermarkets appear
set to carry on their rapid growth in these regions.
IFPRI fixes the problem not on the arrival of the free market but on
the lack of institutions in developing nations.
“The problem is not really the supermarket, but the institutions
before that which would facilitate bundling the products from the small
farmer so sufficient quantities of reliable and good quality products
can reach the more picky consumer,” said von Braun, whose organization
is partly funded by the World Bank and the Inter-American Development
Bank (IDB).
IFPRI’s brief report suggests that farmers need proper information,
training, and infrastructure to withstand the arrival of the supermarkets.
With those in place, millions of small farmers in Africa, Asia, and
Latin America could find farming more profitable than ever — or
they might be forced out of the livelihood altogether.
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