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Arundhati Roy's Views on Privatization



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IPI_Marker

http://www.zmag.org/roy.htm

I totally disagree with her views on privatization and reforming the power
sector.  She states that the goverment should continue to subsidize power
because that is their role in a democratic country.

Agreed, but I would argue that this should be done with an explicit subsidy
(allocated from the State's budget funds) rather than a hidden subsidy, as
that will only bankrupt the state electricity board.

Excerpt:

The first step that a 'reformed' privatised power sector is expected to take
is to cut agricultural subsidies and put a 'realistic' tariff (market value)
on power.

What are political compulsions? Why are they considered such a bad thing?
Basically, it seems to me, 'political compulsions' is a phrase that
describes the fancy footwork that governments have to perform in order to
strike a balance between redeeming a sinking economy and serving an
impoverished electorate. Striking a balance between what the 'market'
demands and what people can afford, is-or certainly ought to be-the primary,
fundamental responsibility of any democratic government. Privatisation seeks
to disengage politics from the 'market'. To do that would be to blunt the
very last weapon that India's poor still have-their vote. Once that's gone,
elections will become (even more of) a charade than they already are and
democracy will just become the name of a new rock band. The poor will be
absent from the negotiating table. They will simply cease to matter.

But the cry has already gone up. The demand to cut subsidies has almost
become a blood sport. It's a small world. Bolivia's only a short walk down
the road from here.

When it recommends 'privatising the power sector', does the government mean
that it is going to permit just anybody who wishes to generate power to come
in and compete in a free market? Of course not. There's nothing free about
the market in the power sector. Reforming the Power Sector in India means
that the concerned state government underwrites preposterously one-sided
Power Purchase Agreements with select companies, preferably huge
multinationals. Essentially, it is the transfer of assets and infrastructure
from bribe-taker to bribe-giver, which involves more bribery than ever. Once
the agreements are signed, they are free to produce power at exorbitant
rates that no one can afford. Not even, ironically enough, the Indian
industrialists who have been rooting for them all along. They, poor chaps,
end up like vultures on a carcass that get chased off by a visiting hyena.



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