Palestine & PFI: worse than you might think

Oct 16, 2011

Palestinian Prime Minister Fayyad - signing away economic prospects?

The tentacles of global private finance are slithering into one of the world’s most vulnerable communities and beginning to take a grip of its institutions.

The UK’s Department for International Development (DfID) and the World Bank are running a £14m housing PPP in the West Bank and Gaza. The scheme is part of DfID’s broader work in the region to develop the private sector and tackle poverty.

Meanwhile, the City of London Corporation and its lobbyist friends, TheCityUK and Infrastructure UK, are liaising with the Palestinian Authority and Prime Minister Salam Fayyad  over potential PPPs to manage water supply and waste disposal.

Although PFI has been trashed in the UK, comparisons between our scheme and Palestinian PPPs are not straightforward.

For one thing, the UK has a AAA credit rating, making it cheap and easy to borrow money to build public infrastructure. According to the Arab Centre for Agricultural Development, Palestine has a lowly C- to C, making it difficult and expensive.

The UK’s public institutions also operate in a peaceful and open environment. In Palestine, simply getting construction materials to the right area can be impossible.

Given Israel’s grip on the region it may be that DfID and the World Bank, with their diplomatic gravitas, are able to achieve things that Palestine presently could not hope to.

If the choice for Palestinians is PFI housing or no housing, which is best?

But the enforcement of this choice raises questions about the neoliberal approach to poverty. Why must aid be packaged up in deals that benefit private contractors?

Why is DfID opting to use the PPP model when the National Audit Office, Public Accounts Committee and Treasury Select Committee have all rubbished it in the past year?

What are the long-term implications of introducing market based solutions to an area with no recognised rights under international law?

To some the answers are depressingly familiar. They are symptomatic of a paternalistic approach to development that is imposing global free market orthodoxy. The UK is helping people out of the material constraints of extreme poverty only to rebind them in more flexible economic chains.

Over the coming weeks GR will be trying to get some on-the-ground answers to the questions above. We want to talk to Palestinians in Palestine about DfID and the World Bank and hear their concerns. We will also seek to obtain contractual information about PPP projects using the Freedom of Information Act.

GR calls for a mode of development that focuses on building sustainable and self-reliant communities and gives people real choices about the way their public services, economies and lives are organised.

PPPs and PFIs are at odds with this vision in every way. They create profit for global corporations, burden governments with debt and give the market a hand into places it should never be allowed to go.

On December 7th GR is holding public meeting with PFI expert Dexter Whitfield to discuss PPPs in Palestine, among other PFI issues. Follow us on twitter @globaliseresist for updates.

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