Try searching for a global review/critique of the PPP, or the public private partnership, and you will be surprised with what you will find.
Progressive economists and liberal commentators in the US, for example, generally view the PPP with suspicion, and the gist of their PPP description is the following :
• PPP projects enrich the private actors
• PPP projects create bad jobs
• PPP projects rob the taxpayers blind
OMG. We have been living under the impression that PPP is a sure-fire strategy to modernize the country’s fraying infrastructure, serve as a giant economic stimulus and create jobs on a massive scale. Why is the outside world so skeptical of our cherished path to modernization and growth? Can we get some enlightenment cum clarification, please. Our public intellectuals should help debunk the outside world’s skepticism that the PPP does nothing but enrich the private players, create bad jobs and shaft the taxpaying public.
For four long years, the supposed liberating impact of the PPP on a country like ours with a shabby infrastructure (and one sorely needing big-ticket infra projects) has been unquestioned. Our star, high-profile economists have not been heard raising a pipsqueak on the downsides of the PPP. The financial press has never investigated the PPP experience countries that pioneered in it, and countries that also opted to use the PPP as the main and most financially-viable strategy to rebuild their fraying infrastructure.
The silence is surprising. The simple question on why private returns under the PPP are often higher than the rate of government bonds—despite the fact that it is the public sector that absorbs all the risks and challenges—is not even asked.
We have to take note of the fact that some of our high-profile economists have proclaimed themselves crusaders for public good and have been inveigling with passionate intensity against anything that is corrupt, wasteful and irrelevant. These economists have powerful media platforms, too, and they incessantly exploit these platforms to burnish their reputations as crusaders for public good. Why they have missed critiquing the PPP is, then, quite strange, given their wont to bloviate on TV against all supposed evils in the country.
In short, the PPP, absent the empirical evaluation, has been accepted as the key tool to modernize everything from airports to water and irrigation systems. You also have to wonder why the Left —whose list of public evil is longer than a wine list—has yet to give its in-depth take on the many wrongs about the PPP.
A diligent search would also find out that only two tangential points have been raised against the PPP projects. But these do not say anything about the most important thing: the fundamental soundness of the PPP as the key strategy toward modernization and growth.
The first quibble has been on the slow pace of the PPP implementation. Day in and day out, this has been the main issue in the financial press, and the main beef of commentators who think they have patented the right to lob the heavyweight commentaries on growth and development issues.
The second quibble has been on the competence and financial capacity of some of the winning bidders—their inadequacy to undertake the mammoth projects under the PPP. Such controversy is represented by the fight over which consortium or group had the right to undertake the Cebu airport project.
It turns out that the two quibbles do not get into the heart of the main issue: the fundamental soundness of adopting the PPP as the key strategy to growth and modernization.
The validity of the main criticism against the PPP—that it enriches the private players first and foremost—is something that stands out even without the help of an in-depth evaluation.
Take a list of the private sector bidders for the PPP projects and you will see that they are the wealthiest, most—connected oligarchs in the country. In fact, if you have the list of the companies owned by the Forbes magazine dollar billionaires and you have the list of 90 percent of the bidders.
Once our PPP experiment is over and done with, the income gains will not be widespread but severely limited. To the .01 percent of Philippine society mostly. Not only that. What will be primarily enhanced are the airlines owned by the same people, the power companies owned by the same people, the telecommunication companies owned by the same people. The seaports where cargo handling is operated by the same people. And the ever expanding retail networks of the same people.
After the completion of the PPP projects, the construction workers will all go home to where they came from, the wage bonanza short and temporary. Many will go home broke, maimed and disabled.
In an ideal world, the PPP projects would not have passed muster the test of social justice and economic equity.
So it is never too late to look deep into why our PPP verities have been dismissed as virtual scams in the more developed societies.