DEREGULATION AND LIBERALIZATION

Yar’Adua deepens Agenda for Economic Stagnation and Mass Misery

Labour Should Declare 48 Hour General Strike and Mass Protest

By Segun Sango

The Yar’Adua government appears to have discovered a magic formula that will end the age-long backwardness and underdevelopment of the country’s economy. This formula is called deregulation and liberalization. According to government’s spokespersons, once the oil sector the main stay of Nigeria’s economy is fully deregulated and the nation’s refineries privatized, all other social problems will become secondary. They argue that deregulation and privatization will create a situation where government will have to stop spending over N700 million annually to subsidize imported but locally consumed petroleum products. When this is done they argue government will now have enough resources to address the problem of decayed infrastructure, public education and all other social necessities.

Government spokespersons have sought to justify this economic robbery on the basis that government subsidy and hikes in petroleum prices have only benefited fraudulent government officials and their private collaborators. They have equally argued that deregulating the oil sector and privatizing the oil refineries will create a situation where ordinary users of energy would not have to subsidize fraud and inefficiency, and at the same time ensuring that fuel products are constantly made available to consumers at fair and affordable prices.

Amongst those unfortunately lending credence to this false and simplistic bourgeois phantasmagoria is Adams Oshiomhole, immediate past president of the NLC and current Governor of Edo State, who, in fact is a member of the deregulation steering committee, appointed by Yar’Adua and chaired by the Bauchi State Governor Yuguda. Arguing from the correct premise that importation of fuel products, as well as huge amounts being paid as demurrage on landed vessels, unnecessarily adds to the costs which the consumers have to pay for fuel, Oshiomhole consequently but wrongfully, called for deregulation and privatization of the oil sector. Hear him: “Demurrage is a problem and the country spends so much to import petrol. The refineries should be privatized. They should be sold off. I don’t care who buys them and how much they pay. Even if it is one naira, let it be sold. The issue is that products must be available” (This Day, February 11, 2009).

Socialists and working class elements must not for a second accept these false arguments. In the not too distant past, capitalist spokespersons used to justify incessant hike of fuel prices on the excuse of meeting the real cost of these products. On the other hand, labour and mass of the working people had always insisted that government claims of subsidies were false. Now propelled by the satanic desire to totally hand over the oil sector to profit merchants in the name of deregulation, the government has now come round to indirectly admit labour’s position in this regard by stating that its so-called subsidies of prices had only been going to the pockets of oil racketeers and profiteers within and outside government.

But like true anti-poor, capitalist politicians, this belated truth has merely turned out as an excuse to foist on the working people the mother of all social economic robbery, a.k.a deregulation and privatization. Instead of taking firm and concrete measures against all those who looted public money in the name of non-existing subsidy, as well as those who collected tens of millions of dollars to repair the nation’s refineries without actually doing so, the government has now come up with the disingenuous solution to sell off the entire oil sector to these same looters and their capitalist collaborators in the name of privatization and deregulation.

It is equally false to give the impression that privatization of the refineries would make products available and affordable. In fact, since government announced “full deregulation” of diesel and black oil, prices of these essential products have skyrocketed thus leading to further collapse of businesses and services, the direct result of the huge cost of energy. As the government prepares to implement full deregulation of petrol product, it has already been estimated that a litre may cost up to N94.00 or more. This doubtlessly will have a very devastating effect on the economy and masses living standard, which already are near their teeters end.

Meanwhile, it is pertinent to remember that the former government headed by Obasanjo granted 18 licenses to private companies to enable them commence local refineries of petroleum products. Several years later, none has been built. Of course, if tomorrow, government decides to sell public refineries to private companies, there may be no lack of buyers, which of course goes to prove the fact that capitalist corporations don’t like spending their own money for capital intensive and or long-term ventures. So, one or two things will happen. One, the privatized refineries may be bought by oil cartels who have no plan of making them functional so that profits can be maintained internationally. Two, even if the privatized refineries are made functional, prices of products will remain extremely high because of absence of stable electricity and other infrastructures and facilities needed to store and distribute products to end users.

LABOUR’S RESPONSE

While commenting on government latest policy of full deregulation and privatization of the oil sector, Abdulwahed Omar, the NLC President, had among other things, made the following statement as reported in the March 2 edition of the Daily Independent: “The economic meltdown has now shown that the economy and its regulation cannot be left to the whims and caprices of free market forces and that government does have a strong and leading role to play not only in the regulation of business and the economy but that it must also be a key player in the ownership and management of business and non-business institutions for the regulatory role to make impact. We maintain our long held position that privatization has adverse effects for employment, prices and public welfare and that there should be no privatization of the strategic economic social sector and public monuments. But in a situation where privatization is inevitable, the process must be transparent, participatory and accountable with emphasis on the need to protect jobs and benefit of Nigerian workers in the affected enterprises”.

To avoid privatization and deregulation, Umar argued, in a later interview with the Vanguard newspaper, “If government will tackle corruption and reduce it to the barest minimum, there will be a lot of money to do other things. Farida Waziri, EFCC’s Chairperson, was telling us when she visited US that corruption … the level of stealing in Nigeria is no longer in hundreds or millions but billions.” Arguing further on why government should not deregulate and or privatize the oil sector, Omar says “Government came out to admit there is a cartel that undermines anything they do about this subsidy thing… If government is not able to take full charge of the present situation, what do you think will happen when government decides to hand over to these people, saying okay, do as you like” (Vanguard July 30, 2009).

On his part, the Trade Union Congress, Peter Esele, also in March, 2009 had among other things stated: “The Federal Government should as a matter of utmost urgency fund from the national treasury, the process of re-opening all closed down factories in order to reverse the present trend towards de-industrialisation….as this has continued to harm employment generation as well as generate lower economic growth. The ongoing nation’s economic crisis is a pointer that only a new system of government that pushes forward the decent work agenda is needed that would put an end to massive inequality which has characterized the nation’s economy. We reject the continuation of the neo-liberal economic policies, which has resulted in massive closure of factories, particularly in the textile and the footwear and rubber industries, reduced power generation, collapse of public infrastructure. Government partnership is critical to ensuring the effective implementation and sustainability of the 7-point agenda, industrial revolution through power and energy agriculture and food security, wealth creation and employment, mass transportation, land reforms, security qualitative and functional education and of course, Niger Delta development”.

There are also sections of labour leaders who also wrongfully argue that deregulation can be beneficial to the working class people under certain conditions. For instance, PENGASSAN President, Babatunde Ogun had argued thus on the current debate: “Before you can deregulate, certain conditions must be fulfilled…The refineries are not working”. His counterpart in NUPENG, Peter Akpatasan had similarly argued: “Deregulation requires that certain parameters must be in place…You cannot deregulate when you have no refineries”. Lately, both PENGASSAN and NUPENG leaderships appeared to have moved from the position of “conditional deregulation” to that which says that “deregulation is a better option for now”. Tokunbo Korodo, NUPENG Zonal Secretary, recently told the media “our members have listened carefully to the government’s representatives and the Executive Secretary of the Major Oil Marketers Association of Nigeria (MOMAN), Thomas Olawore, and we discovered that their views are complimentary. So, we opted for deregulation as insiders who understand what is going on in the sector”. Korodo was especially irked that the NLC leadership did not get the consent of both PENGASSAN and NUPENG “before forming a consensus against deregulation”.

Suffice to stress, it will be entirely in the interest of the economy and working masses for the NLC to form “a consensus against deregulation” given the inherent negative consequences of this neo-liberal, capitalist policy. Unfortunately however, when scientifically xrayed, the NLC’s leadership’s position on deregulation is at best utopian and at worst, hopeless. The demand that government should play greater role in the economy, make local refineries to function instead of relying on imported petroleum products, pump money to revive collapsed industries, reduce official corruption to the barest minimum, all sound very nice to hear. But these precisely are the opposites of what capitalism and its elites stand for. Of course, if all of these enumerated demands can be implemented, it would be possible to achieve a significant improvement in the economy and the living standard of the masses. But this could only be possible under a government of the working people primarily formed to harness the major societal resources (natural and human) to guarantee the basic needs of life for all unlike the prevailing unjust capitalist order, where a tiny few permanently own and devour most societal resources.

At this period, capitalists internationally are only interested in converting public assets and resources unto the exclusive, private property of the few rich. They are not interested in spending money to develop public education, healthcare, etc. For weeks now, the university teachers and non-teaching staffs have been on strike for better funding of the system and for improved living wages. Characteristically, the Yar’Adua government says that it has no money to meet these demands. However, the same government had in a jiffy, coughed out N420 billion of public funds to offset certain bad loans granted by some private banks without proper co-lateral!

The NLC leadership gives the impression that once government is able to reduce corruption to barest minimum, the nation’s refineries can become functional, without having to pay any subsidy for petroleum products either real or imagined! The problem with this expectation is that the very elements that corruptly grounded the refineries, so that they can profit from oil deregulation, are the same elements being called upon to bring corruption to barest minimum when actually their design is to capitalize on this to be able to fully own the oil sector. The NLC President was quite right when he stated that there appears to be a force propelling government to carry out this anti-growth and anti-poor measure. Yes, this force is being driven by the imperialist quest to re-colonise Nigeria and the inherent profit/greed calculations of the local capitalist elements.

To guarantee sufficient and functional local refineries, which can produce fuel at affordable prices for industrial and domestic use that would not be crippled by corruption, the working class, first and foremost, needs to fight for a working people’s government that would be prepared to put the commanding heights of the Nigeria’s economy, including oil, under public ownership and working class democratic control and management. First, oil resources must not under any guise be left for profiteers. Very importantly too, the control and management of these vital resources must not be left to capitalist elements and profiteers. The day-to-day running and long-term decisions on how to run this sector must be that of the working class people with elected committees that are subject to recall whenever they are found wanting in their duties. This is the only practical way that could guarantee production for needs without the usual corruption, which characterize the management of publicly owned enterprises. It is only a working peoples government that is prepared and able to take fundamental decisions that would benefit the majority unlike the present order that only favours a reach few.

Unless the NLC leadership approaches this issue on a principled basis as outlined above, it is a matter of time before it also degenerate to the NUPENG and PENGASSAN’s pro-capitalists stance of acceptance of “deregulation as a better option”! Notwithstanding the bed of roses and good assurances being offered by oil markets and the Yar’Adua government, deregulation of the oil sector is one policy that will certainly spell absolute disaster for the economy and masses living standard. Many of the labour leaders that may today support this counter-productive, anti-poor measure will surely live to reap whirlwinds of unemployment, high prices of petroleum products, as well as the general social dislocations and discontents which this will bring forth.

The Labour and Civil Society Coalition has held mass rallies in 7 cities across the six geo-political zones viz, Lagos, Asaba, Kano, Maiduguri, Makurdi, Enugu and Ibadan, to mobilize mass support for struggle against deregulation of oil industry and for a new minimum wage of N52, 200. These rallies though have drawn enthusiastic support from the mass of workers and ordinary people, have not forced the government to rescind on the plan to go ahead with the anti-poor policy of deregulation. The declaration by the NLC president at Ibadan rally that Labour would go on strike if government refuses to meet the demands is welcome. We however call on both NLC and TUC to use the Abuja rally, which is slated to be the grand finale to declare categorically a 48 hour general strike and mass protest as the next step. There should be strike committees constituted by labour, youths, socialists and civil society activists at workplaces and communities across the country to mobilize mass support for the strike and organize mass activities before and during the strike.