Privatisation: A remedy for South African ills

2015-04-01 09:54

Many of the service delivery and government effectiveness problems that we are facing in this country could possibly be addressed through privatisation. I am not just talking about Eskom, South African Post Office or South African Airways (these go without saying). Rather, I am talking about the basic services that government supplies in particular healthcare, home affairs and education (yes, education AND even others like the police force!). I believe that if done correctly, privatisation through public-private partnerships could be one answer to the challenges we face.

Twenty years into democracy government is still struggling with the legacies of apartheid and indeed its own ineptitude: For example, while pass rates are increasing; so too are dropout rates; delivery of text books is a problem.  “RDP” houses crumble, hospitals without medicine, water and sanitation not up to the requisite standards, suppliers not being paid such that they go out of business. We read about these every single day. Our government is not able to meet all the demands of our society, nor should they be expected to do so, alone.

What then is the root cause? The problem, I believe stems from the fact that our government has insufficient incentive to excel in any of the matters that it handles. What do I mean? Well, if the ruling party is almost guaranteed to return to office no matter what it does = No incentive. The competition between political parties to gain the trust and votes of the electorate is the hallmark of what makes democracies work. In fact it’s the single biggest checkpoint for ensuring that governance happens; competition. Without it inevitable lack of real progress results. I would go as far as to say that without real competitive multi-party system, we do not have real democracy; it is not enough to say that the electorate has a right to choose, but what is fundamental rather, is how rigorously they enact this right. Additionally, the government has far too many conflicting agendas. The job of government is to create an investment friendly climate through policies that stimulate private investment and job creation within a free market system, yet our ruling party is in an alliance with the unions and the communists (the people who oppose these very things of free market capital). Government’s implementation of policies and decision making is hampered by incoherence. You see it in how they do things; for example given the small tax base and a stagnant economy in a relatively high inflation environment government thinks they can create jobs by having a large civil service (some say we have the largest government in the world) that is ineffective, because we reward cadres and not merit. This is a recipe for disaster: no incentive to succeed, incoherent implementation and rewarding imbeciles.

Get rid of all the bureaucracy. Privatise. At least through private public partnerships. Hospitals could be run by private companies (let’s call them private participants) at agreed upon performance criteria for a specific annual fee, plus a mutually agreed profit margin for an agreed time period. The failure to meet performance criteria could mean the end of the private participants’ renewal of term.  Of course the profit margin would be the very minimum that the private participant can make as there is no cap on innovation and efficiency, so theoretically an efficiently run operation can make more profits. Incentive for excellence? Yes. The Department of Health’s role would be focused on oversight, and creating the political imperatives against which these operators would conduct themselves. If we say that this model is expensive, we would be underestimating the power of the profit motive to lower costs and improve efficiencies. No intelligent being disputes the ability of private enterprise in the regard. I know I sound like a capitalist, and that’s because I am one, but the fact of the matter is our country cannot afford to remain in this murderous malaise of mediocrity. We are better than this (unless you don’t agree, in which case sod off because you want to kill this country with ideology). This model isn’t all that new, this is how hospitals in Britain and some in Canada  are managed. According to the Commonwealth Fund, Britain has the best healthcare system in the world, and Canada is not too far behind. African countries are adopting it as their leaders are driven by the growing need to deliver, but recognize that they may lack the capacity to fully achieve their aims. Which begs the question; why do we continue to struggle, using old outdated modalities of centralization?

Imagine if we applied the similar approaches to manage our schools. We wouldn’t privatise individual schools, but rather we would privatise the management of districts of schools. Solutions to on- the- ground problems would be sought and applied as they arise instead of being covered up by political rhetoric. Our schools’ problems would become business imperatives to be resolved with the greatest of urgency. Currently, it appears that the matric pass rate is the main measure for success at the Department of  Basic Education. In fact, we never see the minister except at matric results and teacher strikes (where large female undergarments are displayed). However, with competing private participants, the DOBE can enforce more salient measures such as throughput rates from enrollment to graduation, effectiveness of delivery of subject content for each phase of learning without embarrassment at the release of these statistics. The districts would create their own inspectorates or internal assessments to monitor content delivery. The Department of Basic Education would instead focus on quality control; and moderation to ensure standards are maintained without worrying about the day- to- day mechanics of “how” on a national level. For the private participants it would be business as usual to solve these, and because of competition the imperative to excel is enhanced.

One could apply the same thought process to how our policing is managed and applied.

For this idea to succeed we would have to be able to administer tenders (for the private participants) in an honest and transparent way, without the so called cadre deployment, and preference for our friends. Merit and merit alone must be the yard stick. Careful design of measurement and scoring criteria would have to be applied.

Government would not be expected to negotiate with unions, as they would cease to be the employer of teachers (while being in an alliance with the union; a conflict of interest that… wait, let me recover my will to live). The decentralisation of decision making would make for more responsive treatment of issues. For example in my school example, districts would be able to decide to manage their teaching capacity by exploring avenues which may be seen as otherwise taboo; like employing (outsourcing) people to become markers to avail teaching capacity (something that is needed considering the alarming learner- educator ratios in our country). Agility.

What I am saying is we need to explore more creative and yes, perhaps drastic ways to solve our problems by involving the private sector.

The true test of policy is not in populist sound bites or in the beauty of its premise, but rather in its practicability; can we do it, can it be done effectively? So far our country’s leadership have proposed in some instances wonderful policies but they consistently fall short in implementation.  They need not have to try (and fail) to do everything themselves. The collective capacity of this country can be better mobilized through private participation.

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