Disguising Trade in Development Partnerships

• Author: Priscilla Schwartz
• Position: University of Leicester priscilla.schwartz@le.ac.uk
• Pages: 105-117

Page 105

1 Introduction

The doctrine of public-private partnership (PPP) was christened to improve on quality and economic efficiency of public services in developed countries through collaboration between public and private entities, and using market-based solutions. It remains the favourite brand in capitalist relations. ¹Respective roles of the public and private sector worldwide were altered with the wave of the British experiment with large-scale privatization programmes in the early 1980s, which ushered the engagement of private firms in productive activities. ²

In LDCs, this has been determined mainly by pressure from international donor agencies (where aid has been conditional on privatization) and from domestic capital market interests at the expense of transparency. ³Infrastructure development and extractive industries were targets for private sector involvement in LDC public sectors. PPP concept re-brands privatization in an aggressive bid to ensure predominant private sector participation in government service to complement the trend of liberalisation and globalisation.

The concept bears no legal definition. Various terms and models define or describe PPP arrangements. These range from the legal regime determining the nature of partnership, institutional framework governing operations and the regulatory conditions that border partnership interests. The predominant policy objectives driving PPPs relate to private sector development, enabling business environment promotion of competition and social regulation, and international cooperation on these. Within this market centred rationale, embedded legal complexities and regulatory conundrum, PPP is widely promoted as a development tool that ensures basic social services including Health in LDCs.

The state of most LDC health sector including Sierra Leone is deplorable. Inadequate government health infrastructure, poor service conditions, prevalence of diseases, and compounded by poverty paint a grim picture for marketing. According to recent UNICEF Report Sub-Saharan Africa region (home to majority of LDCs) is furthest behind on almost all of the health related Millennium Development Goals (MDGs). ⁴

It is in light of this peculiarity, that I scope a developmental context of health services for LDCs. The Context represents primarily a pursuit of policy objective for the promotion of affordable, accessible and universal health care services, as a public purpose for which the government is to provide, facilitate and regulate in the interest of its peoples. Page 106

Under the principles of the UNICEF/WHO Alma-Ata Declaration, the provision of such health care should be 'at a cost that the community and the country can afford to maintain at every stage of their development in the spirit of self-reliance and self-determination'. ⁵

LDC governments have relied on Official flows over the years, including loans, grants, export credits, and publicly guaranteed debt to fulfil this public purpose. However the trend of decline in official flows to LDCs, and substantial increase in unofficial private for-profit finance and other private cross-border giving noted by Harford et.al ⁶ contorts the performance of this function. And concerns over global health security ultimately paved the way for a reconditioning of LDC health objectives as a global agenda. Henceforth LDC health challenges should be addressed in 'global partnership' with collective responsibility particularly for reducing child mortality, improving maternal health, combating HIV/Aids, malaria and other diseases. ⁷ International cooperation with pharmaceutical companies is made an essential component of this partnership.

This globalisation of partnership introduces the doctrine of PPPs in LDC health service delivery systems in a transformational way that blurs the distinction between the traditional economic orientated PPPs and developmental context of health services for LDCs.

This paper, seeks to identify within the concept of PPP the developmental context of health services in LDCs. It analyses the doctrine of PPP and the application of various models to LDCs health delivery systems. It examines different types PPP arrangements under broad categories including, international trade and economic partnerships, development PPPs and domestic health initiatives. Examples are drawn from LDC countries, especially Sierra Leone, to illustrate the practice of respective health PPP. Regulatory challenges inherent complex PPP mix is also addressed. The paper recommends a more pro-active role for LDC governments in the design, implementation and surveillance of health PPP as essential in achieving health development goals.

The following section analyses various permutations of PPPs in aid of extrapolating a developmental context of health services applicable to LDCs.

2. Doctrine of Public-Private Partnerships

The United Kingdom Private Finance Initiative of the 1990s attempted a systemic programme for PPPs focusing on limiting public expenditure and much later, placing emphasis on public purchase of quality services and risk allocation.

Under EU Community law, PPP enjoys prominence through concepts of SGI and SGEI ⁸ and shaped by EU policy on competitive tendering of public works and services. Yet the term remains undefined and there is no specific system governing PPPs. ⁹ In general, the term PPP in Community usage refers to forms of cooperation between public authorities and the world of business which aim to ensure the funding, construction, renovation, management or maintenance of an infrastructure or the provision of a service. ¹⁰ According to the European Commissioner for Internal Market and Services, it is still unclear how existing 'patchwork quilt' of rules should apply to PPPs. ¹¹ He also notes the difficulty in developing a coherent framework that provides the public and the private side with legal certainty and to facilitate institutional framework within which PPPs can work most efficiently. ¹²

A UN Study Group defines Public-private partnership as implying "a common understanding of shared goals, a willingness to repartition responsibilities for their achievement, a continuing public-private dialogue on what needs to be done to promote their realization, and a supportive policy and institutional framework". ¹³

The United States National Council for PPP views PPP as contractual relations between public agency and a private sector entity for purpose of the sharing of skills, assets, risks, and rewards potential of each sector in Page 107 delivery of service or facility for the use of the general public. ¹⁴ From the United States perspective, PPP does not represent "corporate philanthropy" or "charity work" to help poor nations but informs a cooperative alliance that can benefit business and the society in which the business operates. ¹⁵

For the African Union (AU) and its New Partnership for African development (NEPAD) agency, PPP represents a means to 'achieving economic transformation in Africa by working closely together with the private sector in utilizing respective core competencies to form synergies and achieve results collectively'. It has also a role in increasing public financing for provision of basic infrastructure - roads, energy, and water supplies and advancing the African Agenda under WTO and EPAs. ¹⁶

In other forums, a social dimension of PPPs is shaping and identified as 'public-social-private partnerships' (PSPP). This concept derives from the inapplicability of business and profit led PPP model to fulfil public aims such as the common good and welfare. ¹⁷ PSPP covers cooperation models between participants that are not only agencies of the state and private enterprises (as in PPP), but are also social enterprises and social economic organizations. ¹⁸ The goal of PSPP financing tool is the servicing of social protection and supporting interests and activities for the improvement of opportunities for disadvantaged people or groups. ¹⁹ PSPP models should only be supported by the state in cases where they serve the long-term social needs of disadvantaged members of society. 'This responsibility belongs to the state and the state only'. ²⁰

The forgoing permutations of PPP are split on emphasis - business or developmental. The UN and PSPP descriptions represent a more cohesive framework and approach to PPP from which the developmental context of LDC health services could construct. The commonality of partnership goals, the recognition of other social private partners, the strategic partitioning of health responsibilities by the state and a supportive institutional framework that allows for policy considerations of the state and continuing dialogue on implementation of social goals frames the developmental context of health services in LDCs - that is promotion of quality, affordable, accessible and universal health care services to citizens as a public purpose for which the government is to provide, facilitate and regulate.

2. 1 Partnering models for health facility and services

There are several models of partnering mechanisms for engaging private sector participation especially in public hospitals, health centres or clinics. The discernible models include and facility arrangements involving construction, ownership type, management, operation and maintenance, and other financing agreements. These are notably:

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