Tuesday, October 25, 2011

NU 6 by JIL, Outsourcing the Government


Outsourcing the Government

Privatization has been our government's answer to a more efficient delivery of service. In the recent years, we have seen the privatization of some of the more important corporations of the country such as MWSS (to Manila Water and Maynilad), National Grid Corporation and of course the different power plants across the country. By privatizing these companies, the government hopes to raise much needed funds and at the same time provide a more efficient and reliable service to the Filipino people. Track record has so far been good with many of these companies, especially Manila Water, being able to turn around losing operations and negative public perception. If this is the case, will it also be possible in the future to outsource many other basic services that LGU's provide its citizens? I say outsource here and not privatize because LGU's in effect will still be in control of the policies of running each local area. What will be outsourced are some of the basic functions that define day to day LGU services.
First, the basic services shall be out outsourced to private, third party groups:

a.)    Local city collection and disposal of garbage
b.)    Local city maintenance (think of a private MMDA who are empowered to implement maintenance services as mandated by hiring local LGU's)
c.)     Local traffic monitoring (in which the company can further expand into traffic consultancy)
d.)    Local engineering units to be outsourced to an expert engineering firm
Second, some of the major services shall be outsourced:
a.)    Local police to maintain peace and order (private militia?)
b.)    Bidding of local infrastructure projects to be handled by third party auctioneers
c.)     Bidding of local purchases to be handled by third party auctioneers
d.)    Defense group and "gun-for-hire" groups to be employed for deployment in "hot zones" (think Blackwater Group).
Finally, the ultimate outsourcing that can happen is when LGUs hire a company that specializes in running cities. These private companies will handle almost all the day to day city maintenance as well as running consultation sessions with the LGUs on how to better run cities. These companies will "manage" city operations similar to how competitive firms do their business. Later on, as more and more local government units adopt this policy, these companies will benefit on economies of scale. Imagine such companies working behind the scenes and what power these companies will hold. Can we then succeed in making government operations more efficient and effective just as to what privatization has done for the national government? Is it finally possible to "outsource the government" in today's market economy?

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