To privatize or not to privatize?
This question has again become a hot subject of public debate following the decision of the state-run Sanitation Services Authority (SSA) to enter an agreement with private waste haulers aimed at alleviating the severe garbage problem which has been plaguing Barbados for months.
Under an outsourcing arrangement, which was supposed to take effect today, private operators are taking over responsibility from the SSA for garbage collection in four parishes — St Philip, St Peter, St Lucy and St John — for six months in the first instance with the possibility of extension. They will be on the road eight hours a day, three days a week, and will be paid at an hourly rate of $411.
It is no secret that the SSA, which has generally served Barbados well over the years, has been experiencing major challenges. These stem from being cash-strapped and not having sufficient resources to fully meet all of its operational needs, including the maintenance and replacement of vehicles, many of which have been off the road because of mechanical breakdowns.
As a result, the population has seen a sharp deterioration in collection services, with some communities having to go sometimes for weeks before seeing a SSA truck. This situation has contributed to an unsightly build-up of garbage around the country, providing a breeding ground for flies and other vermin which pose a serious public health threat.
We therefore welcome this example of public/private sector cooperation and see it as a sort of test case which can be used, based on the results, to determine the wisdom of whether to proceed or not to full privatization. Interestingly, word of the arrangement came a day after leading businessman Ralph Bizzy Williams called at a Chamber of Commerce meeting for the full privatization of waste management services.
Obviously seeing an opportunity for his group to become more involved in the business of waste management, Williams offered to acquire the SSA’s operations with a promise to involve in the new venture private waste haulers and SSA collection teams by providing them with an opportunity to become entrepreneurs.
As expected, strong opposition to the interim arrangement and any full privatization down the road has come from the National Union of Public Workers (NUPW) which represents SSA workers. While it is only reasonable that the interests of SSA workers should be fully considered, we believe that the pros and cons of either partial or full privatization should be evaluated, not on the basis of emotion, but by results.
What should matter, in the final analysis, is a solution which delivers a relatively clean Barbados through the efficient collection of garbage as well as its safe disposal. Given the financial challenges facing Government, it would be akin to burying our heads in the sand if we fail to recognize that the public sector is unlikely, for the foreseeable future, to efficiently deliver certain services, like garbage collection, entirely on its own.
This being the case, it makes sense for Government to consider getting out of activities which can be performed more efficiently by the private sector. We recognize that Barbados is still philosophically tied to the notion of heavy state involvement in the economy. However, truth be told, this model is outmoded in this age of market liberalization where the private sector is seen as the engine of growth and the state as facilitator.
Minister of Finance Chris Sinckler is open to the idea of privatization once certain conditions are met. The Opposition Barbados Labour Party (BLP), which is supporting the interim collection solution, has adopted the same position in relation to the SSA. However, support for privatization, as expressed by Sinckler, represents a fundamental policy shift for the ruling Democratic Labour Party (DLP).
Readers will recall that, in the lead-up to the 2013 general election, the DLP had come out strongly against any such move after then BLP leader, former Prime Minister Owen Arthur, had placed the issue squarely on the table in an address to the Chamber of Commerce.
Let’s face facts! A major contributor to the nagging fiscal deficit, which has the country deep in debt, is the fact that Government for many years has had to prop up inefficient state agencies. Such support has meant, among other things, that citizens have been saddled with an increasing tax burden which no one likes to carry.
The SSA’s arrangement with the private sector presents a timely opportunity for the country to engage in a dispassionate conversation on the advantages and disadvantages of privatization. As a private sector entity, we are for any move that will result in a more efficient Barbados that delivers quality services to the general satisfaction of citizens, residents and visitors.
Barbados wins whenever there are such outcomes.