30 October 2018
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“There are virtually no limits on what can be privatised”, so opined the World Bank in 1992[1]. However, at that time, the concept of privatisation was used largely in the context of industrial enterprises. The gravity of the statement can be better understood in the present times when virtually everything is getting privatised – even basic services such as education, health, nutrition!
Taking example of the health sector in India, there is a clear trajectory of increasing private sector involvement in the provision of health services; be it, as envisaged under the National Health Policy 2017 or as planned under the Ayushman Bharat. One of the recent policy initiations in the health sector is the introduction of Public Private Partnership (PPP) for Non-Communicable Diseases (NCDs). Under this, the NITI Aayog, in collaboration with the Ministry of Health and Family Welfare (MoHFW) and the World Bank as the technical partner, has developed a PPP model for providing the NCD services (cardiology, oncology and pulmonology) at the district hospitals. The MoHFW has already rolled out the Pradhan Mantri National Dialysis Programme in a PPP mode. Many of the States such as Rajasthan, among others, are already trying out the PPP model in the running of the Primary Health Centres.
The rationale for involving private sector through PPP is a standard one that the public health system is systemically constrained due to inadequate funding, shortage of human resources, infrastructure shortfalls and weak management capacity which can be dealt with by “leveraging the private health sector, to deploy resources and infuse greater efficiencies...”[2] Thus, privatisation, in this case through PPPs, is considered an effective way to deal with these challenges and ensure “quality services”.
However, this euphoria and the hurry to privatise such essential services as health needs to be sobered down in the light of experiences of other countries over the years. In fact, the World Bank itself is restrained in declaring PPPs, which it has been promoting for decades, as a complete success especially when it comes to their impact on the poor and the vulnerable sections of population in a country. In an evaluation of the World Bank’s support to public-private partnerships across various countries over a period of ten years (from 2002 to 2012)[3], it has been conceded that, due to large data gaps, it is difficult to assess how far PPPs have benefited the poor.
A recent UN Report of the Special Rapporteur on extreme poverty and human rights (2018)[4] brings to light the evidence and experience with privatisation where it shows that privatisation has a negative impact on people living on lower incomes or in poverty. It cites studies such as one conducted by the National Audit Office (United Kingdom) which concludes that “the private finance initiative model had proved to be more expensive and less efficient in providing hospitals, schools and other public infrastructure than public financing”.[5] Even for infrastructure projects such as road transport and information and communication technology, which are relatively more attractive to private players, a study conducted by the European Court of Auditors of the European Union[6] examining PPPs in France, Greece, Ireland and Spain concludes that the partnerships were characterised by “widespread shortcomings and limited benefits”.
A literature review on PPPs in two sectors, education and health, across Africa, Asia and Latin America points out that “PPPs – both as policy model and practical arrangements – are underpinned by a narrow conception of education and health, which denies their broader embeddedness within the economy and society”[7]
Bringing in the perspective of human rights the UN Report of Special Rapporteur points out that “privatisation often involves the systematic elimination of human rights protections and further marginalisation of the interests of low-income earners and those living in poverty” and that “the existing human rights accountability mechanisms are clearly inadequate for dealing with the challenges presented by large-scale and widespread privatisation”. In a review of the SDG Agenda 2030 by a group of civil society organisations, it is argued that “privatisation and PPPs involve disproportionate risks and costs for the public sector and can even exacerbate inequalities, decrease equitable access to essential services and jeopardise the fulfilment of human rights.[8]
With such compelling evidence and arguments against privatisation, even under the garb of PPP, and the associated undermining and violations of human rights, there is an urgent need for the Indian state to rethink its policy stance especially in the context of basic services. Equally importantly, in order to ensure that there is a momentum built to ensure such a change in state’s approach, it is imperative that there is a collective effort by civil society, activists, patients and other constituencies to demand for public provisioning of such essential services as health.
[1] Shirley, Mary M. (1992) “The What, Why, and How of Privatization: A World Bank Perspective”, Vol. 60 Issue 6, Fordham Law Review.
[2] NITI Aayog (2018) “Guidelines for Public-Private Partnership for Non-Communicable Diseases”
[3] World Bank (2015) “World Bank Group Support to Public-Private Partnerships: Lessons from Experience in Client Countries, FY02-12”, Washington, D.C.
[4] Alston Philips (2018) “Extreme Poverty and Human Rights”, Report of the Special Rapporteur, United Nations.
[5] National Audit Office, United Kingdom (2018) “PF1 and PF2: Report by the Comptroller and Auditor General, London, as cited in Report of the Special Rapporteur, United Nations (2018).
[6] European Court of Auditors (2018) “Public-Private Partnerships in the EU: Widespread shortcomings and limited benefits”, Special Report, as cited in Report of the Special Rapporteur, United Nations (2018).
[7] Languille, Sonia (2017) “Public Private partnerships in education and health in the global South: a literature review”, Journal of International and Comparative Social Policy, Volume 33, Issue 2, pp. 142-165.
[8] Report by the Civil Society Reflection Group on the 2030 Agenda for Sustainable Development (2017) “Spotlight on Sustainable Development 2017: Reclaiming policies for the public”, as cited in Report of the Special Rapporteur, United Nations (2018).
The views expressed in this piece are those of the author, and don’t necessarily reflect the position of CBGA. You can reach Richa Chintan at richa@cbgaindia.org.