Privatisation and corporate capture

Left ArrowFeminist criticisms of conventional macroeconomic policies: Work performed by women is seen as dispensable
Purple Dot Decision making and transparency Right Arrow

 

Feminist criticisms of conventional macroeconomic policies

Privatisation and corporate capture1‘Corporate capture’ is defined by ESCR-Net as “the means by which an economic elite undermine the realization of human rights and the environment by exerting undue influence over domestic and international decision-makers and public institutions.” More on the issue is available at: https://www.escr-net.org/corporateaccountability/corporatecapture

As you may recall, the conventional macroeconomic theories are all capitalist theories based on the dominance of the market over all else, with the partial exception of Keynesianism. As an extension of these theories, neoliberal macroeconomic policies have been developed, which rest on the idea of shrinking the role of government and its regulatory power over the economy and the market. However, we see that the idea of shrinking the role of the state is often a misnomer as this approach is often applied to social protections and the public sector, while several state functions are used to incentivise business and favour the private sector over the public sector.

“The ongoing crisis has led to a rising tide of public fury, spread across continents, and mostly aimed at private bankers. But public anger is also increasingly directed at the political and technocratic establishments that actively protect the interests of financiers: politicians and technocrats that have tossed their ‘free market’ theory to one side and protected private financial risk takers from the discipline of the market and from the rule of law. There is outrage at the way private losses have been socialised and public funds and guarantees generously deployed to bail out private bankers and the financial system as a whole.”

– Ann Pettifor, The Production of Money, p. 85

Privatisation schemes have been developed and implemented throughout the world in parallel with the narrative of ‘shrinking the role of government and its regulatory power’, and with the pretext of removing ‘public service burdens’ from the governments. In fact, privatisation measures became a central aspect of the Structural Adjustment Programmes (i.e. economic and policy conditions) imposed on countries borrowing money from international financial institutions (IFIs) for a long time. As the private sector gains more space and resources (including through privatisation), its political and economic influence over macroeconomic policies is also increasing.

Public Services International defines ‘privatisation’ as “any means by which services, infrastructure and functions traditionally or ideally performed by government are wholly or partially owned, provided, managed or delivered by private actors/privately employed workers. It includes public-private partnerships, corporatisation of public services, outsourcing of public service employment and euphemisms like ‘asset recycling’”.2Public Services International. (March 2019). Privatisation and Women’s Human Rights: Factsheet for CSW63 advocacy.

Through privatisation, we see that more and more private sector companies are profiting from supplying essential services and goods, such as supply of water, heating, energy, and even health services and education. However, while regulations on the services and goods provided by the state are stronger and comparatively well established, the work of the private sector is much more unregulated.

Kate Donald: "It's clear that privatisation can have very discriminatory effects, because the private actors who come in to public service provision are motivated not by making sure that everybody has coverage, but by making a profit. And that almost always means that the people who are worse off already then get even more disadvantaged by the privatised public services."Furthermore, in principle, the public sector is accountable to the people it serves and thus makes decisions that prioritise the interests and wellbeing of the public over profit. In contrast, the private sector is focused on generating profits, often with an emphasis on short-term returns on investment. Thus, privatisation results in accessibility problems and human rights violations in the supply of these essential services and goods, for which the private sector is rarely held accountable or required to provide remedies.3For a deeper discussion into why ‘democratic ownership of public services’ is important, and for examples of remunicipalisation, please visit Transnational Institute’s The Future is Public series.

Additionally, even international human rights institutions are trying to include the private sector as a source of financial resources for development. This is happening as sustainable development measures are becoming important parts of economic policies throughout the world, and with the states getting smaller in terms of their income generation and regulatory power. This makes the private sector (a sector that is not as strongly regulated, transparent or accountable as the public sector) central to financing essential and important services, and raising significant concerns about the impacts on women’s human rights and gender equality.

“Despite mounting evidence that neo-liberalism and related concepts of privatization and structural adjustment have caused significant hardships and human rights violations for many impoverished communities, key global institutions with the mandate to safeguard international human rights standards and to work with governments to eradicate poverty, are looking to work with the private sector to deliver and/or finance development. The current rhetoric calls for ‘a business case’ to be made for private sector involvement in development and human rights.”

– IWRAW Asia Pacific, Corporate Power and the Space for Women’s Human Rights Activism

IWRAW Asia Pacific’s discussion paper also provides important examination of the frameworks and instruments available for women’s rights organisations to directly or indirectly engage with the private sector.

In 2011, the United Nations published a report called The Guiding Principles for Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy’ Framework. Aiming to “provide an authoritative global standard for preventing and addressing the risk of adverse human rights impacts linked to business activity”, the principles have also drawn attention to the private sector’s responsibility for adherence to human rights principles.

The expectation is that the principles will be implemented in a ‘non-discriminatory manner, with particular attention to the rights and needs of, as well as the challenges faced by, individuals from groups or populations that may be at heightened risk of becoming vulnerable or marginalized, and with due regard to the different risks that may be faced by women and men.’

However, as the name indicates, these are just guiding principles. While states have international agreements and standards through which they can be held accountable for the rights violations they cause, there are no international, binding standards by which the private sector (and especially the gigantic multinational corporations that provide services in many countries of the world) can be held accountable.

For that reason, civil society organisations throughout the world started a call for a legally binding instrument on human rights. This will then hold the transnational corporations and other business enterprise sectors accountable for their actions and rights violations. As a result of global efforts, a process has begun to develop a binding instrument on transnational corporations and other business enterprises with respect to human rights. All this is continuing as this starter kit is being written.

Women’s rights organisations are also organising their own campaigns, to ensure that gender analysis and expertise, and the differential impacts of the activities of these private sector actors towards women, are included in the proposed legally binding instrument.

“A gender perspective is not about treating women as a ‘vulnerable group’; it should not be a separate ‘tick the box’ exercise; and is not only about women and girls. Integrating a gender approach into the treaty means analysing how businesses may have different, disproportionate, or unanticipated impacts on women or men, as a result of their different gender-based social, legal, cultural roles and rights. This approach is thus essential to the very purpose of the prospective treaty if it is to put the concerns of rights holders at the center and to effectively ensure the prevention, protection and remediation of business-related harms for all.”

– #Feminists4BindingTreaty

 

Left ArrowFeminist criticisms of conventional macroeconomic policies: Work performed by women is seen as dispensable
Purple Dot Decision making and transparency Right Arrow

 

 

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