The Return of Strong Public Services
Essential for social, economic and health security for all
|Jun 25, 2020|
By: Shobha Shukla
The Covid-19 pandemic has illustrated, more than ever, the overwhelming importance of public services and the devastating consequences of under-funding and privatizing them. With 9.1 million infected and nearly 475,000 dead across the world, that is why the writing on the wall is clear: commit to recovery plans that will deliver a new era of public services for all.
"Covid-19 has shown us that well-resourced public health systems are the best defense against any public health crisis,” said Kate Lappin, Regional Secretary of Public Services International for Asia Pacific. Similarly, the best defense against any economic crisis is well-resourced and functioning quality public services that are accessible to all, together with universal social protection. Yet, these services have been undermined over the last 40 years."
Countries that have invested in well-coordinated public services for quality education, reliable energy systems, accessible and well-maintained water and sanitation, will manage this pandemic, and any future crisis, far better than those who have embraced the corrosive ideology of neoliberalism.
"But in this crisis, there is an opportunity for us to make changes in the global financial and economic rules to ensure that the Covid-19 recovery is such that it can weather any future crisis," Lappin said.
Rosa Pavanelli, General Secretary Public Services International, rightly pointed out the failure of the existing economic system is written in the failure in controlling the current pandemic. Years of reducing funding and staffing in public health systems have resulted in poor primary healthcare services, understaffed health services and absence of job safety policies that could allow workers to receive personal protection they need in times of crisis like Covid-19.
The push to encourage private sector has not only undermined delivery of quality services, but also undermined the capacity to ensure universal access to health services during Covid-19, she said.
David Archer, Head of Public Services, ActionAid International, is one of the two authors of the report, "Who Cares for the Future: finance gender responsive public services!". While sharing data from this report, Archer underlined three factors that have impacted government spending on public services which has undermined countries’ efforts to address the Covid-19 crisis.
According to Archer, "There is a new debt crisis and a major sufferer is the governments’ capacity to spend on public services. We looked at 60 countries and found that 30 of them were spending more than 12% of their national budgets on servicing debt. These 30 countries had also cut on spending on public services during the last three years. Where debt servicing has risen it has led to underinvestment in health, education, and other public services. Those countries that managed to keep their debt servicing below 12% were increasing their spending on public services. This debt crisis had not been recognized prior to Covid-19. There have now been some small efforts to temporarily suspend debt payments to allow governments to spend revenue on providing a comprehensive response to Covid-19. But it is not enough. There needs to be a much longer-term suspension, rather cancellation, of debt and renegotiation to ensure that in future all debts are negotiated at the country level in a transparent and accountable manner and that debt servicing does not rise above 12% of the national budgets" he said.
public sector wages
Another factor is cutting down public sector wage bills. Archer explained that "The routine advice of the International Monetary Fund (IMF) to countries is to keep inflation extremely low in single digits- much lower than what most economists believe is necessary. IMF was also telling countries to freeze or cut their public sector wage bills. In 78% of the countries we studied, this freeze or cut on the public sector wage bill had happened. This is a serious issue as those on the public wage bills are teachers, doctors, nurses, healthcare workers, other essential frontline workers. So, if you follow IMF’s advice you cannot recruit more of them who are needed to provide good quality public services."
low tax to GDP ratio
The third factor is the acutely low tax to GDP ratio (the amount of money governments charge as tax) particularly in Asian countries, which prevents governments from getting the revenue needed for investing in quality public services. Archer shared that the global average of tax to GDP ratio in a low-income country is 17%. But in Asia, there are many countries having it far below that. In Bangladesh, Pakistan, Myanmar and Cambodia it is below 10%; India, Indonesia, and Philippines have it below 17%; Thailand and Vietnam are doing slightly better. "In the rich countries, the average tax to GDP ratio is 34%, which means that they have a tax base which is double or triple as compared to most Asian countries. You cannot provide universal public services of good quality when your tax revenue is not sufficient", said Archer.
He suggests simple solutions to these problems: to renegotiate debts, to resist policies of IMF and to increase tax revenue available for investing in public services. This way countries can easily double their spending on health, education and other essential public services in the next five years.
tax the corporates
Rosa Pavanelli added that "Governments should tax the multinational corporations (MNCs). IT sector, which has been making huge profits during this pandemic, should be taxed more. Globally financial institutions and governments should introduce a 25% tax for corporates. Fight against tax evasion and corruption should be part of this big plan to generate revenue and bring the economy back on its feet, post-Covid-19. Neoliberal system has shown its weaknesses and failures during Covid-19 management. Economic system needs deep reforms and not just patchwork remedy."
local public services are essential to local GDP
"Public services, especially at the local level, contribute to the local GDP. They are essential to support local economy and to support quality of life of the people. We have to work for strengthening dignity of workers in public sector. They are heroes who have to be celebrated everyday by recognizing the dignity of their work with decent wages and working conditions, as they are the ones who are delivering fundamental human rights to all" added Pavanelli.
unpaid care and domestic work
Nisha Larma Arki, Women's Rights Head, ActionAid Nepal, pointed that "Insufficient and underfunded public services have affected Covid-19 management in Nepal, impacting the lives of people, especially women. While Covid-19 cases and deaths are few in Nepal, people are dying of other secondary impacts - one of them being insufficient public health services. During lockdown period there has been a 200% increase in maternal mortality, and also an increase in domestic and sexual violence due to confinement in houses. Women and girls are having limited or no access to basic health services, including those for family planning (giving rise to unintended pregnancies) and for pregnant women. Very few safe homes are functioning during the lockdown which is severely limiting options to help domestic violence survivors. Very few quarantine centers are gender-friendly and even cases of rape have taken place in them."
Arki believes that strengthening public services is important to dismantle gender inequality and gender-based discrimination.
Archer too echoes Arki's sentiments: "Poor funding for public services also abets gender inequality as the first sufferers are women who are in the frontline of care giving. Their unpaid domestic work is never calculated. When public services are not available, women and girls are forced to shoulder maximum burden of unpaid care and domestic work, such as to care for the children and the sick at home, collect water from faraway places and do other chores. Where public services are available it gives them access to education and decent work."
V Narasimhan, General Secretary, All India National Life Insurance Employees Federation India, cautioned that “The standard policy advice of the World Bank remains on cutting government subsidies, increasing revenues and shrinking the public sector through privatization. While giving loans to India and other south Asian countries, the World Bank made the loans conditional upon implementation of its economic policy. Privatizing public assets has reduced the poor's access to healthcare, water, power, and other services and it is also creating a private corporate monopoly in various sectors which is not in the interest of the people. The World Bank is following the methodology of private sector engagement even in the Covid-19 pandemic situation."
Pavanelli remarked that in 2016 the UN General Assembly, the World Health Organization and International Labor Organization had adopted a very progressive plan to increase employment in the public sector to boost economic growth, including hiring 18 million healthcare workers/ professionals by 2030. But what we get is freezing of wages, non-replacement of workers in public health sector, outsourcing and privatization. It is time to put aside the economic model that we have been following for decades and put in place a new and different system that addresses the fundamental root of injustice and inequality, she said.
Shobha Shukla is the founding Managing Editor of CNS (Citizen News Service) and Coordinator of APCAT Media (Asia Pacific regional media network to end TB & tobacco and prevent NCDs). Follow her on Twitter @shobha1shukla or visit www.bit.ly/ShobhaShukla