Once ago, politicians from both sides of the political divide hotly debated the issue of privatization of the major utility entities, The Bahamas Telecommunications Company and The Bahamas Electricity Corporation. Today, the debates have cooled down as many politicians see little wisdom in pressing the issue.
Those who support privatization of BaTelCo suggest that as long as the shares in that entity are held by the government, there will be no political interference – no matter how many buffers you have between. Others go further to suggest that the government will not be able to afford to keep abreast of the technological developments in the telecommunications industry. They believe that privatization is the only way the Corporation will be efficient and able to compete.
However, the point must be made that the present government seeks to retain 51 percent of the shares of BaTelCo if it decides to privatize. The government intends to maintain controlling shares.
We are firm in our conviction that both BaTelCo and BEC can be efficient, profitable and provide state-of-the-art services if politicians allow professional managers to run these entities. The problem is politics. It is simply not true that entities controlled by politicians cannot be profitable. What is required is truly a new political culture. The operations of BEC is a clear example. A board of businessmen with a competent management team allowed to operate with sound business and ethical principles could make a difference in the standard of service which the people receive. However, the board and management teams must be prepared to stand firmly by those principles and politicians must allow them to manage effectively.
The case of the suspension of a BEC management employee for major infractions is a good example. It is understood that both the board and management made a determination to terminate the services of the employee, but their decision is being held up by the political directorate.
Politicians in The Bahamas cannot seem to understand that they are merely responsible for policy and should not be about the business of micro-managing entities of government.
The whole concept of privatization is ultimately a political rather than an economic decision. No matter what the economic advantages of privatization, it will not happen in a country unless politicians in power are motivated to take on vested interests.
In The Bahamas, there is no urgent need to drive the issue of privatization. A major cause to push the privatization issue should be the advent of a macroeconomic crisis, as evidenced by hyperinflation or severe balance of payments problems. As long as the government could raise taxes or borrow at home and abroad to finance public spending and imports, privatization could be avoided. Currently, based on cash-flows, both BEC and BaTelCo are able to raise government guaranteed loans with relatively low interest rates.
Privatization is also seen as one potent method for reducing the governmentﾴs budget deficit. However, if 49 percent of the shares in BaTelCo are sold to private interests for under $100 million as is reported, this would not make an appreciable difference.
Whether we have privatization of government owned entities or not, it is important to decentralize the decision making process in the public sector and empower persons within the chain of command to make decisions and be responsible and accountable for those decisions.
The Cabinet of The Bahamas or a Minister should not expect to make every decision or micro-manage every issue in the operation of a public-owned entity. The management model based on highly centralized decision making by a select few at the top has prov ed to be inefficient and ineffective in operating businesses. Such an approach is clumsy, laborious and time consuming. It is an outdated form of management particularly in this era of globalization where the market puts a premium on speed and responsiveness.
In the ultimate analysis the Bahamian people need to understand that there is a new way of doing business in the world and they should demand that their political leaders comply.
By Wendall K. Jones, Insight, The Bahama Journal
