Thursday, April 26, 2007
By Chibaula Silwamba
Thursday April 26, 2007 [04:01]
Visiting UN assistant secretary general Jomo Kwame Sundaram has observed that the World Bank-championed privatization has failed and suggested the encouragement of public investment. In an interview in Lusaka on Monday, Sundaram - who is UN assistant secretary general for economic development - said privatisation had led to low investment and economic growth.
He said international institutions that promoted privatisation, such as the World Bank, had now realised that the private sector was not investing after they bought off companies that were previously in public hands.
"We have realised that the private sector has not delivered. Even the World Bank, which has in the past decades encouraged privatisation, has realised that the private sector doesn't invest," Sundaram said. "There has been low growth in the past decade because of privatization."
He said the private sector was only interested in making profits instead of delivering the services to the people. "The private sector has not invested and they only invest when they are given incentives. There is a big drop in investment due to the private sector," he said. "Now, public investment should be encouraged."
However, Sundaram said there was need to put in place strict regulations to ensure that once the public sector invested, civil servants did not mismanage the companies.
Sundaram said it would be easy for the public sector to provide services such as electricity and water to all people regardless of where they live.
Sundaram also observed that it was unfortunate that most of the aid to developing countries did not reach the poor.