This British author introduces us to another neo-liberal invention--private equity infrastructure funds. Although the concept has been around for a while and apparently has been used in some form for the privatization of existing state assets, these financial instruments are now being aggressively pursued in new infrastructure projects. Apparently many national restrictions and regulations are impeding this growth industry and agents of the One Percent are launching an aggressive campaign against these barriers through various international bodies. It is the One Percents' last remaining conquest that will put all of the world's 99 Percents into more debt servitude. This investment type has greatly enhanced a type of financial class of investors--what Michael Hudson refers to as the "rentier class" (see this and this).
It is an investment method, advertised as a "public-private partnership", for the world's One Percents to substantially increase their wealth; however, for the 99 Percents of various nations it often means higher prices, inadequate services, being stuck with more debts when infrastructure projects are failures, and more cutbacks in wages and service to pay the debts. It is a partnership where the public sector assumes all the risks and where the private sector receives all the rewards.
Because the endgame of capitalism is to force most of the world to pay a surcharge to the One Percent for every service they receive such as power, water, health care, education, etc, while exposing the public sector to more debts, it is extremely important for any reasonably educated activist to understand what this is all about. Fortunately, the author shares this concern and writes in a style suited to a more general audience.
The report is in PDF format and 51 pages long (text only, not including the extensive references). However, the content is double-spaced with large margins. (I find it much easier to read lengthy articles by printing them.) To entice you to read the complete article, I am offering the following introduction:
Political discourse is often conducted in code. Where policy proposals or actions are likely to engender strong opposition or cause affront to the public, euphemisms are used (“collateral damage” for “dead civilians”, “land disturbance” for “mining”, “environmental enhancement” for “canalising rivers”) or concepts are employed that direct the conversation elsewhere.
When therefore the World Bank focused its 1994 World Development Report on “Infrastructure”, it should not have come as a surprise that the Report was not in fact about bridges and roads and dams, but about privatising public goods and services and reducing the role of the state in development. But the “coding” extended beyond the crude, nod-and-a-wink use of “infrastructure” to mean “divesting state assets”. By framing policy choices in terms of an either/or opposition between the “private sector”, on the one hand, and “the state”, on the other, the Report successfully hid its promotion of a new “state/private combo”. A realigned state became the lynchpin of a particular response to a growing crisis of over-accumulation within capitalism, in this instance creating new highly profitable investment opportunities by “selling off” state-owned enterprises (“the family silver” in the words of former British Prime Minister Harold Macmillan) at knock-down prices.
Nearly twenty years later, the crisis of over-accumulation (too much capital chasing too few investment opportunities) is not only still with us but has deepened, erupting acne-like in various manifestations that financial analysts now refer to as the GFC (or “global financial crisis”). Once again, “infrastructure” is back on the international policy agenda, with national governments, multilateral development banks and international groupings, such as the leaders of the Group of 20 major economies (G-20), all announcing support for major infrastructure development initiatives. This time, however, “infrastructure” embodies more than an agenda of privatisation: what is being constructed are the subsidies, fiscal incentives, capital markets, regulatory regimes and other support systems necessary to transform “infrastructure” into an asset class that should yield above average profits. Far from constituting a retreat from neoliberalism or a renewed state commitment to meeting unmet development needs (a constant refrain is the plight of the 1.4 billion people in the world who have no access to electricity, the 880 million people without safe drinking water, and the 2.6 billion without access to basic sanitation), the planned interventions by the G-20 and others are better viewed as a response to the over-accumulation crisis that further entrenches the current state-private settlement, geared to harnessing the state to extracting profit for the private sector. As such, “infrastructure” is less about financing development (which is at best a sideshow) than about developing finance. Indeed, the G-20’s 2011 high-level report on infrastructure makes just seven references to “the poor” in contrast to 184 references to “private” or “public-private partnerships”.