Business, CSR, Economy, Human Rights, Law, Nigeria, Poverty, Social Justice, Social Responsibility, Sustainable Development, Uncategorized

Privatisation vs. Commercialisation – The Sustainability Issue.

Developing country rules are different from established developed country rules, this is due to various factors which include, but not limited to poverty, lack of institutionalised processes, corruption, nepotism, weak institutions etc.

The question has always arisen about what is the best form of economic model to adopt in running Government enterprises, ‘Privatisation’ or ‘Commercialisation’ (especially in light of government failures in running enterprises in developing countries). The phrase “government enterprises’’ explains itself, it means a government-sponsored business activity, such as a public utility. It is an enterprise set up by the government for the provision of goods and services, for the benefit of the people. The writer has always advocated for any other model except privatisation, for developing countries.

Privatisation as a model elicits selling government enterprises to private business concerns, usually owned by very rich individuals, who are mostly motivated by profit, at the expense of the people in the country. The arguments for privatisation include that the companies would be better run, provide jobs to the benefit of the society. Inspite of the stated reasons, from hindsight, these are not enough reasons for the case, in under-developed countries. In a country with weak institutions, how do you control unbridled capitalist tendencies i.e excessive increase in prices of goods and services. America cannot be compared with Nigeria, esp when comparing GDP and minimum wage issues.

It is the opinion of the writer that the model of commercialisation as adopted in the U.K, is better for developing countries to adopt.

What is Commercialisation, in this context? Commercialization is a system of leasing out govt enterprises for a few years to the best and most capable hands. This is a better model, in the sense that government enterprises still belong to the state and those holding the leases would not take permanent control which would give them a sense of superiority, which could lead to them riding roughshod over the populace. Commercialisation is more advantageous because it can help governments protect the people by getting a better deal for the people at the expiration of a lease, before the renewal of another. Developing countries rarely learn from second hand experience i.e experience of other countries. Russia and Britain have experienced both models and have totally rejected privatisation. One of the advantages of commercialisation of government enterprises is education and technology acquisition, upgrading standards, learning new work ethics and management cultures and skills acquisition. These are important because the major problems with government enterprises, in developing countries, is motivation and job satisfaction which is lacking in most cases. Inculcating a new mind-set is fundamental to a developing country’s progress. Inevitably, this would lead to a more sustainable economic environment where both the country and people can benefit. Instead of a privatised system that creates oligarchs (a new level of super-rich) which goes against the new ethos in the world which is bridging the gap between the rich and the poor by creating a more solid middle class. It has always been the view of the writer that those who profess privatisation as a system, lack adequate understanding of sociology, motivational psychology, political philosophy and positive socio-economic theories that hinge on socio-capitalist initiatives such as social welfare, CSR and community development in a protected and better monitored environment.

It should be noted that governments that privatise their enterprises give control of their economies over to private individuals and when this happens, chaos would be the end result, because this erodes democratic ideals, where the people lose the right to run/ decide their economic destiny, because those elected lack the power to implement the people’s wishes. So the real power would reside in the owners of factors of production/ the commonwealth. If the government controlled its own enterprises and partook in the same economic environment as privately run companies, this would create competition which could spur a rejuvenation of government enterprises and the government could control prices of its goods and services which would also have an effect on prices in society, which could defeat any cartel arrangement in fixing prices to the benefit of the cartel.

In short the espoused phrase of ‘Government having no business in business’ is totally flawed and wrong for developing countries. It can even be said to be wrong also for developed nations in light of the recession of the 2007-8, where due to the collapse of major enterprises, the governments of USA and UK not only gave out bailout funds, but even bought stakes in some banks in the UK, as well. This is the result of unbridled capitalism.

It should also be noted that Foreign Direct Investment (FDI) is different from Indigenous Privatization of Government enterprises and the excuse of the issue of frustration of FDI initiatives, such as the Richard Branson’s debacle in Virgin Nigeria (Note: Not Virgin Atlantic business in Nigeria) should not be used as a yardstick for privatization in Nigeria. When individuals own all the companies in a developing country, no one can hold them back from maximising profit, over public interest. To whose detriment is this? Answer: the people, citizens and consumers.

Can this bring about sustainable progress/ development for the majority or only for a few?

Standard
Business, CSR, Dangote, Human Rights, Law, Nigeria, OXFAM, Poverty, Public Relations, Social Justice, Social Responsibility, Sustainable Development, Uncategorized, Warren Buffet

Injustice and Inequity: the Bane of Under-Developed Nations. (Nigeria as a case study)

‘For the same reason that a Dangote is great, is the same reason why underdevelopment persists in third world countries.’

Why in the midst of so much riches, is a society so poor? There are a few reasons – inadequate distribution of resources, corruption, insincerity and the prevalence of an individualistic nature.

Inequality has become a global phenomenon, in today’s world, but it is a lot worse in developing nations, where there exists various forms of cultural, political, social, legal and economic imbalance and injustice.

The writer has on numerous occasion attempted to enlighten at various fora, the unnecessary nature of having too much in an under-developed nation. Why should one man have over 10 billion dollars, in a country, where some cannot even afford to feed on 1 dollar a day. It is the belief of the writer that no man should aspire to over 1 billion dollars, if their society is bereft with poverty and under-development. The logic behind this is that the more a man takes out of an under-developed environment/ market, the less for the people of the country.

This would somewhat explain the philanthropic nature of billionaires in more developed climes e.g Warren Buffet. These set of men understand the essence of money and money-making. In better climes, there is something extra to having money. Developed and more enlightened societies develop strategies and systems that instil a sense of responsibility on the rich e.g through charitable organisations like OXFAM or by the rich setting up their own foundations e.g Bill and Melinda Gates Foundation. This sends a message, which is you are only a temporary custodian of the monies in your possession and bestows some responsibility on the holder of such monies to be more communal and charitable in his or her actions.

In contrast, what is found in underdeveloped nations, is a set of people (Elite and the Rich), who believe that society owes them indefinitely. They possess a megalomaniac disposition, imbued with an over-bloated ego of self-importance, almost feudalistic in nature, to the detriment of the society around them. A set of people, who are on a one-way track of constantly stripping the society and the environment of its resources, without giving anything back. If this is not wicked, I do not know what the word means.

In a business or capitalist environment, there is nothing wrong in healthy competition amongst entrepreneurs, but when that need for capitalist competition begins to hurt society, then it is wrong and we should know when to draw the line. It is this sort of unbridled money-making, without any care for the society from which the money is derived, that leads to the collapse of societies and civilisation i.e. Syria, Iraq, and Libya.

It is the opinion of the writer beyond all reasonable doubt, that the cause of high corruption in the land, is based on this circumstance of injustice and inequity. The blame lies not only on Government officials, but also on the people of the nation, who have been so impoverished over the years, that they now suffer from a poverty mentality, even in the midst of riches, making the people desperate and less humane.

How do you explain the situation where banks ask their workers to meet crazy monetary generation targets (in the Billions) or they would lose their jobs? The multiplier effect on the psyche of Nigerians in this era of little or no job security, is best left unimagined. Most people will become criminals and will be encouraged to steal to meet up. Even Juju/ Obeah (Traditional Spiritual assistance) is not out of the question in this effort, of unbridled primitive acquisition of material resources.

One solution to this situation is the implementation of a Corporate Social Responsibility (CSR) Law in Nigeria, as in India. This would make it compulsory for every company that makes over a particular amount, to spend a part of its revenue on CSR. The implementation of such a law would act as a driver towards sustainable development in the society.

Why is this not prevalent in most under-developed nations?

In the words of Bob Dylan, the answer my friend is blowing in the wind.

A word is enough for the wise.

Videos on Inequality in today’s world:

 

 

Standard