Editorial

GM, NGOs & the Public Interest 

In the days of Ronald Reagan and Margaret Thatcher, the mission of governments was to trim governments down to size. Governments were apparently occupying too much of the available space and that was supposed to be preventing the private sector from finding its full expression. A swathe of public sector “reforms” followed. Numerous government activities heretofore were taken over by the private sector. Wide-ranging deregulation was favoured to free the private sector to engage in various activities without having to put up with those regulatory handicaps. It was a world of free-for-all and the Berlin Wall fell. Cowboy capitalism roamed on the face of the world and an American historian, Francis Fukuyama, was inspired to write that the advent of liberal democracy in fact signified what he called “The End of History”. In other words, any other social model which will come up will evolve until it ultimately assumes the form of the capitalist liberal democracy.

Continuing along this path, free markets started bursting at the edges. Governments abandoned several key positions that they had been occupying so far. Lobbies gained fresh ground. Unbridled capitalism outperformed itself under this new impulse. A prolonged era of cheap money and a frenetic race after money-making and profits ensued for a decade at least. After signalling a couple of times that the bubble would burst any time, this uncontrolled expansion of capitalism finally brought the world economy to its knees in late 2007. The world’s most important banks and large financial institutions had fully run out of capital. Millions of workers lost their jobs. The imminent collapse of the financial institutions threatened the world with an economic depression on a massive scale it had never experienced before.

Had the governments in the principal markets where this crisis hit the system directly not intervened by injecting capital in concerned financial and non-financial institutions alike on a scale never seen before, the world would have been reeling under chaos today. Instead of the breakneck liberalism that was ousting governments from areas of their responsibility in past years, there came a turn of the tide, forcing governments to bail out a crippled private sector which had been over-driving most irresponsibly for several years. Governments took massive stakes in the capital of enterprises to save the private sector from crumbling further. Having been thus salvaged, the private markets are currently threatening to take to their old ways again despite the catastrophe this liberal system has heaped on its victims already. Governments are trying to make a comeback on the scene which they had abandoned in the name of free market liberalism. They are making new regulations to ensure that things do not get out of hands again. Of course, there is a lot of resistance!

The question that arises from this situation is whether governments should have relinquished with that amount of abandon their commanding positions in the first place. Should they have gone as far as to entrust to the private sector the responsibility for looking after the welfare of citizens, for example? Even if they did so, what amount of oversight were they still expected to exercise so as to ensure that conflicts between private pursuits and public objectives are properly identified and resolved?  It is the responsibility of governments to be on the front line wherever the ‘public interest’ is at stake. No market ideology can overtake this primary duty of care which a government owes to its people for, without it, there would be no need for governments.

In the past, governments have been so meticulous about this duty of care that, recognising their own comparative shortcomings of approach to specific social concerns, they have relied on non-governmental organisations (NGOs) to look after certain social matters. It is a question of approach: officials do not have the same touch as certain non-officials closer to where the root of the problem lies. NGOs have been known to carry out excellent work in such areas. They have been supported by state funding for carrying out their activities. It is difficult to quantify the input of work as one would do in a performance-related pay system in very many activities of the sort. You can pull out one drug addict more easily from out of the hell than another; pure quantification of effort and remunerating it is next to impossible in such cases. This situation and subject-matter of several NGOs defies the notion of financing based on a program-based-budgeting system. We should therefore distinguish between apples and oranges and not try to put everyone in a mix-bag drawn from the school of the failed market liberalism.

If, on the other hand, we look at the NGOs themselves, they are not expected to be working on a 9-to-4 o’clock rule. They have to prove however that they have a positive influence on the outcomes in the sectors of their involvement. They should be able to execute the work more effectively than a government department could have done whether or not they are benefiting from state funding. A proven track record is a must for those who want to be credible in their roles. They should also be able to demonstrate that they can act independently of the governments which are funding them. This situation arises especially in those cases where the government or parties close to the government are involved in commercial activities. The government cannot, in such cases, be expected to be a fair arbiter if there is a dispute arising on its pricing of the concerned products or services. If there is a dispute, for example, on monopoly practices by Air Mauritius on certain destinations, one would expect a third party such as the Competition Commission helped by relevant NGOs to thrash out the issue without government involvement.

Both the government and NGOs are expected to try dialogue before the situation is embittered by unpalatable actions on the part of the protestors or the government in those cases where the government is a party to the dispute. We do not appear to have followed this course in the dispute leading to the recent hunger-strike by the Secretary-General of the ACIM, a consumer protection group, claiming that abusive indirect taxes were weighing heavily in the price of petrol and that they should be trimmed down. One can understand the deep reluctance of the government to review a major source of its indirect revenue after having decided to cut down sharply its rate of direct taxation. One can also understand the sense of revolt the government must have registered when the ACIM decided to bring road traffic to a halt on a critically important day for terminal school examinations which must have affected the students participating in those examinations seriously. If, as a consequence of the retaliation that took place in this context, the staff subsidies being paid to the ACIM by the government were suspended sine die, it only shows that the escalation was allowed to drag on.

This mutual loss of faith by the government and NGOs in each other does not fit into the role NGOs are expected to be carrying out for the protection of the public against abuse. Moreover, it is difficult to establish that the recent hunger-strike was not timed, like the order to slow down road traffic previously, to cause political embarrassment. It is a matter of speculation whether such a dramatic action, taken perhaps on the eve of general elections and during an intensely religious period, is a mere coincidence. In any event, the indirect tax on petrol has not been affected by all this. The only thing that has changed is the restoration of the government subsidy to the ACIM, which was already being paid before the incidents took a serious turn last year. Part of the media which plays its own game to show the government in disarray whenever it can, has not missed the opportunity. Maybe it would want to secure a more generous division of tickets for the elections between the parties going into a political alliance by posturing against the government whenever it can establish the government to be in a weak position.

We don’t think NGOs are really made out to engage in this type of power struggles. Their true role is to complement the social work of governments, rather than allow themselves to be used as proxies for political battles which are not their own. If the space specific to them is lost because of a misperception of their true role as NGOs, the public will suffer. Rampant capitalism will make a comeback no holds barred. It will be a higher price to pay in that case, as the world has witnessed the past two years. The vacuum and ravage brought about by the gurus of unbridled capitalism has shown that one should not lose whatever foothold one has secured against an expansive private sector that sees its growth only at the expense of the state. One should get down to the real work and have results to show.

 

M.K.

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