Better way to privatization

Citing the 2012-2013 Philippine Human Development Report (PHDR), the Inquirer’s March 31 editorial (“Infrastructure is key”) pointed to war and the lack of infrastructure as the main reasons Mindanao, an island so rich in natural resources, has many of its provinces mired in dire poverty. Aside from the conflict in Mindanao, the government’s failure to put in place “connective infrastructure” is a major cause of the provinces’ poor HDI (human development index) rankings, Prof. Toby Melissa C. Monsod, 2012-2013 PHDR coordinator, noted, citing as proof the “overlapping public investments with little or no development significance such as waiting sheds, entrance arches and multipurpose pavements, resulting in duplicative infrastructure and programs in disregard of scale, synergy and the conscious integration of larger markets.” We can’t agree more.

Similarly, the editorial cited the observation of business tycoon Ramon Ang that building more infrastructure is the key to solving the peace and order issues in Mindanao and that there is need to bid out these infrastructure projects to the private sector.

Undeniably, privatization has become the accepted answer to government’s lack of capability to provide much-needed infrastructure projects. Lamentably though, privatization has also unreasonably increased the cost of basic services beyond consumer affordability, allowing the accumulation of enormous private profits. Poor Filipino consumers.

But there is a better way to privatization: “cooperativization”—yes, the cooperative way, meaning, cooperatives bidding for government assets and undertaking public infrastructure projects. Through cooperativization, the end-users, not private interests, will be the true and ultimate beneficiaries.

I refer to genuine people’s cooperatives, those registered with the Cooperative Development Authority—the private organizations whose primary purpose is to serve the interests of their numerous members, who continually fund their respective co-ops’ capital requirements through monthly savings in the same way government is mandated to serve the interest of the people who provide government its revenue requirements through their tax payments.

Not many Filipinos know the financial strength of cooperatives; in fact, a number of “billionaire cooperatives” exist in their midst. Realizing this financial power, cooperative leaders of the six Mindanao regions have formed 1 Mindanao Energy Cooperative. This new cooperative proffers its combined competence and strength for partnership with government by bidding for and investing in infrastructure projects and public assets that are being privatized, such as the Agus-Pulangi hydropower complex.

This is a private sector initiative which the government must support with a sense of priority as this can address social and economic inequities and help greatly in ending the decades-old conflict in Mindanao. Yes, genuine people’s cooperatives are offering an economic model for social entrepreneurship that can address poverty in Mindanao.

—PETE L. ILAGAN, president, National Association of Electricity Consumers for Reforms Inc., [email protected]