The violation of social rights within market rationale

Privatisation of social services is being imposed by the international funding institutions through severe and never-ending structural adjustment programmes. In these programmes pressure is put on the government to change social policies to make social services profitable; thus health, education, social security and access to water, energy, telecommunications and environmental sanitation services can be operated by private agents, guaranteeing them high profit margins.

Transferof the public heritage to private capital

Privatisationof basic services has skewed income distribution enormously, making the richricher and the poor poorer. The State has favoured accumulating public assets inthe hands of financial groups, delivering state companies at prices close to onethird of their real value.

Thefirst step in the privatisation of these companies has been to increase therates of public services to make them attractive to private capital. Over thepast five years, the rate for water consumption has increased an average of 238%[1]for the poorest stratum of the population in the nine main cities. Waterprivatisation is the next objective in the sights of the financial corporations.[2] 

Inprivatisation of highways, telecommunications, and production and distributionof energy, pre-established profit margins have been guaranteed for multinationalcompanies and other purchasers, which the State must pay if the companies do notmanage to obtain the expected profits. In this way, privatisations haveinstalled a form of capitalism without risk in which the profits of thecompanies do not depend on the goods or services actually produced and sold, buton predicted sales. The risks for losses or profits not collected must be takenon by the citizens through the public budget and by the state companies thathave been obliged to deliver huge compensations to the private companies withwhich they have been obliged to “compete” under these unfair conditions.

Educationas a business

Thepolicies ordered by the World Bank and the Inter-American Development Bank havecontinued to organise education according to market rationales, placing thecountry among those having the highest percentage of schools in private hands. With these levels of privatisation achieved, the agreements with the IMFhave now been set out in a constitutional reform, again reducing the amount ofresources that the State should allocate to healthcare and public education.This reform, approved despite one of the greatest social mobilisations of thelast decade, will generate a reduction of close to USD 2.5 billion between 2002and 2008, an amount freed to pay public debt creditors.

Alongthe road to privatisation of educational institutions, the State has virtuallyreduced its commitment to state education to funding the teaching staff.Students’ families must cover the costs of maintenance and conservation ofschool facilities, acquisition of materials, payment of public water, telephoneand energy services, acquisition of teaching aids and payment of salaries tonon-teaching staff such as wardens, secretaries, cleaning and maintenancepersonnel. These costs have to be covered by payments that the families mustmake for registration, boarding facilities and other economic resources receivedfrom the sale and provision of teaching services to students.^[3] It is not surprising that with so many costs falling to students theHuman Development Report for Colombia 2000 has noted that in 1997 the reasonsfor 46% of school age children and young people not attending school werestrictly economic, mainly the high academic costs and the need to work.[4]

Theneo-liberal educational reforms have gone further than in any other country inthe continent. As a result of de-regulation and privatisation policies andmarket criteria in the provision of educational services, the right to educationhas become one of the most difficult rights to achieve. The impoverishment ofnearly 29 million Colombians has already placed outside the classroom 3.1million children who do not have sufficient resources to pay for the right toenter or remain in school.  

InColombia, not only is basic education not free, but since 1991, the Constitutionhas introduced a system of collecting fees in official educational institutions.All children and young people who want to enter basic education, with very fewexceptions, must pay. In spite of the fact that Colombia has ratifiedconventions such as the International Covenant on Economic, Social and CulturalRights and the Convention on the Rights of the Child, in which the State haspromised to ensure free basic education for all children, standards and policiesopenly ignore this mandate. Recently the Committee on Economic, Social andCultural Rights pointed out that the Colombian constitution is not adjusted tothe provisions of International Covenant on ESCR as it does not guarantee theright to free education for all.[5]

Since1990, a series of reforms have been introduced that have raised the cost ofeducation enormously. Over the past seven years, the price index for educationincreased by 40% with relation to the general price index. At the same time, theState increased spending on education between 1991 and 2001, from 3% to 5% ofthe GDP, while private family expenditure on education has already reached alevel of nearly 4.5% of the GDP. 

Inspite of this, coverage continues to be low in middle schools (26%), basicsecondary education (52%), and pre-primary education (34%). For basic primaryeducation, coverage has reached 82%, showing some improvements, but it is stillunder the average for Latin America and the Caribbean. The increase in officialand family expenditure on education has not resulted in a proportional increasein coverage and quality for almost 60% of the population living in poverty.

Inrural areas, almost 30% of the children who are admitted have to give up theirstudies during the year. The deteriorating quality of this education isindicated by the poor results from international quality tests.

Theprocess of privatisation of education in Colombia has progressed so fast that30% of the available places for primary and secondary education are to be foundin the private sector, where costs are not within the reach of the poorpopulation. For higher education, only 25% of the available places are to befound in the public sector. This situation is worsened by the economic crisisthat has led 12% of the private school students to give up their studies andseek admission in state schools, which are increasingly scarce, given the statepolicy of eliminating funding for educational supplies. 

Thehigh dropout rate in public education is a direct consequence of high costs. Thelatest studies on school dropouts estimate that over a million students leaveprivate or state schools each year.[6] The causes of school dropouts are mainly related to theeconomic crisis, the armed conflict and dislike of schooling.[7]In rural areas, the average dropout rate is between 17% and 30% of the totalnumber of students.[8]

Thehealthcare market

Law100 (1993) reformed the healthcare system to enable private companies to takeover a major part of healthcare services through a market of insurancecontracts. For those having the capacity to pay, a system of contributions wasestablished and a subsidised regime was created to cover the poorest sector ofthe population, with the assurance that by the year 2000 the whole populationwould be covered. Full coverage was not achieved, but has instead decreased.Before privatisation was established in 1993, membership reached 75% of thepopulation and in 2002 only 62% was covered. Access to health care is today moreinequitable; while 20% of the population with the highest income had aninsurance coverage of 75% in the year 2000, only 35% of the poorest quintile hadcoverage. The resulting system is also discriminatory in relation to women:despite the fact that 51% of the population are women, 60.9% of participants ofthe health system are men, thus reflecting the imbalance of women’sparticipation in the labour market.^[9] 

Inspite of being insured, many people cannot receive care because they cannotafford complementary payments. Thus, before privatisation, 67.1% of the peoplewho declared they required health care received it, while in the year 2000, only51.1% of those requiring care were seen by a doctor. The situation is even moreserious in rural areas where 48% of the population are not members of any healthsystem.[10]

Privatehealth costs increased by 50%, rising from 3% to 4.5% of the GDP between 1993and 1999. Public expenditure also rose by 57% from 7.2% to 10% of the GDP overthe same period. Private insurance companies are responsible for managing themajor part of these resources. In December 2001, the private Health ProvisionCompanies (HPCs) covered 70% of the market of the health contribution system,while state HPCs covered only 30%. 

Privatisationof the provision of health services has led to high margins for middlemen; theHPCs and the Subsidiary System Administrators (SSA) in hands of the privatesector retain a major part of the resources, absorbing increases in expendituremade by the State and by families. The General Comptroller of the Nation haspointed out that, on an average, the SSAs retain 40% of the money from socialsecurity assigned to the subsidised system. 

Freemarket reforms have led to deterioration in the general health of thepopulation. Between 1990 and 2000, the number of children under one year of agethat had received the complete cycle of vaccinations dropped from 67.5% to 52%,enabling a return of epidemics such as measles, which for years had beennon-existent. Privatisation of the health sector has stratified Colombiansociety and discriminated against the neediest sectors. A system has beenestablished for the very poor (subsidised), one for middle-income population(contributive) and another for the rich (prepaid medicine), while 38% of thepopulation are not  covered.Treatment is differentiated both in services and in rights, on the basis of eachperson’s economic capacity to join in one of these systems, thus shaping anincreasingly divided society. 

Privatisationhas led to private insurance companies managing care for the more affluent,while the public sector takes care of the poor. In this competition, the Statehas replaced the subsidies to supply that it delivered to state hospitals,clinics and healthcare centres with subsidies to demand. This situation has ledto several bankruptcies and the subsequent closing of many of the hospitals andclinics that care for the low-income population.

Newconcessions to the multinational pharmaceutical companies make healthcare costseven higher for the poor and worsen the deficit of public health institutions.The Government decided by decree[11]to prohibit production and import of generic drugs, which had been available ata low cost, for a period of five years. This enormous sacrifice of the health ofthe population was made in response to a demand by the United States governmentso that certain Colombian exports could hope to obtain tariff benefits in thismarket. 

Conclusion

Lackof access to social services and their increasing costs have led to a rise inthe number of people in poverty. According to data from the General Comptrollerof the Republic, 59.8% of the population live under the poverty line; accordingto a recent study by the World Bank this figure is 64%.[12]In 1998 there were 21 million poor people in Colombia and in 2002 this figurereaches 24 million, among whom nine million live in extreme poverty.[13]Privatisations have not improved access by the population nor the quality ofsocial services for the poorest sector. Privatisations have increased privilegeand exclusion and have promoted a regressive redistribution of resources fromthe middle and lower classes to the most powerful, while reducing access tohealth care, education and social security for the neediest sectors of thepopulation.