Throughout the 1980s and 1990s, the globe seemed seized by a great, apparently unstoppable wave of privatization. As we emerge into the 21st century, especially after the events of 2008, we find the landscape changing. While there are certainly a growing number of re-nationalizations and nationalizations, a new feature on the landscape is the growing number of state-owned multinational corporations operating in overseas markets.
These entities break with the simple dichotomies and platitudes about private and public, both on the left and on the right. Rightists who claim that public entities are bloated and inefficient find their rhetoric stumbling before the incredible successes of places like Dubai and China, the re-emergence of Russia, and the rise of Brazil, and even the ability for states like Venezuela, Iran, and Argentina to resist the dominant capitalist forces of the globe. However, this is not the beginning of a golden age of the left, where socialist multinationals stride the globe battling their capitalist opponents like the avenging ghost of the Red Army. The multinationals do not seek liberation for the world, and increasingly we see that they exist for the profit of the home country, more specifically, for the advancement of the interests of the politicians who control them. This is a narrow vision of human improvement, one that exploits the weakness and poverty of places like Afghanistan and sub-Saharan Africa where these national state-owned multinationals exploit resources and labor in the same manner as their private counterparts.
However, sometimes this broad, sweeping vision does not do justice to the subtleties of life and a close examination of a specific example is more revealing. For several months, I have lived in the city of Medellín, Colombia, home to a municipal-owned multinational, Empresas Publicas de Medellín, or “Public Companies of Medellín” (EPM). I hope, through examining how EPM operates, both at home and outside of Medellín, we can gain a better understanding of the logic behind the rise of the nationalized multinational, how they serve their owners, and what they deliver to their customers and clients.
The “Educated” City
Medellín is a city with a chip on its shoulder. Like many mid-sized countries of the world, Colombia is large enough to be home to a single, great, city; in this case it is the capital, the sprawling metropolis of Bogotá (home to about 8 million people). In its shadow, however, Colombia is home to a number of other sizeable cities, the largest of which is Medellín (with just shy of 3 million). The highly centralized Republic of Colombia concentrates not only prestige, but also a level of decision-making in the capital that many in the relatively decentralized United States would find constrictive.
It is understandable, then, that the people of Medellín, known (along with their fellow residents of the Department of Antioquia) as “Paisas” have developed a strong sense of being underdogs struggling in the shadow of a city they often revile as cold, unemotional, controlling, uneducated, and dirty. While one could examine the subordinate status of cities like Medellín in many terms, the elites in local government have decided to focus on a cultural argument. The slogan of the department of Antioquia— “Antioquia la más educada ” — literally translates to “Antioquia the most educated,” but within the Spanish-language context, “education” refers as much to one’s cultural sophistication, command of etiquette, and general deportment than to his or her classroom knowledge. The goal of the policy is to link economic development and social leveling to cultural advancement. For instance, in order to bring order to distant slums riven with violence, the city has erected cultural buildings; the most notable is the Biblioteca España (The “Spanish Library”), a mostly book-free cultural space perched on a hill high above the city center.
In truth, Medellín could never hope to displace the capital in wealth, population, or political power, and so perhaps cultural superiority is an achievable goal. However, Medellín faces an uphill battle even here, as the Colombian state has showered benefits upon the capital: it is home to publicly funded institutions of every kind, such as impressive museums (like the Museum of Gold), national celebrations, and cultural organizations like the National Symphony Orchestra of Colombia or the Teatro Colón. Bogotá draws upon the wealth of the entire nation while Medellín has only the Department of Antioquia to draw upon (of which, the majority of the inhabitants live within the metropolitan area).
There is a wrinkle in the works because Medellin has a secret weapon. Like many Colombian cities, Medellín’s public utilities—gas, water, sewer, electric and telephone—are under the auspices of EPM. While across the globe, municipalities are selling off their public utilities to private corporations, Medellín has bucked the trend and instead converted EPM into a multinational corporation. The company remains 100% owned by the municipality and is tightly linked to the Mayor’s Office: the mayor serves as the President of the company and appoints all of the other eight members of the board. This organization has served as the springboard for numerous Paisa politicians, including the infamous right-wing president Álvaro Uribe who started his public career as EPM’s Chief of Assets in 1976.
Today, they own the national telecommunications company Une and power/water companies in 11 regions of Colombia, including Bogotá itself. Even more remarkable, EPM owns utilities in Guatemala, Panama, and Guadalajara, Mexico; Une has branched out into Spain and the United States. The vast majority of EPM’s customers and—we might safely assume—its revenue streams, are outside of the boundaries of Medellín itself.
State Centralization versus Corporate Centralization
The effect of EPM’s wealth continuously flowing into the city is undeniable. EPM has funded huge projects throughout the city including: the Planetarium, the Botanical Gardens, the Museum of Water, a children’s interactive museum, libraries, urban parks and, most strikingly, the 16,000 hectare Arví Park just outside the city limits. Less tangibly, I have noted that it funds cultural projects like theaters, the symphony, and academic conferences. The revenues from EPM’s empire has allowed Medellín to bat well above its weight in the arena of elite culture and to compete with a national capital three times its size.
This raises interesting questions about centralization, democracy, and accountability. The people of Medellín are right in their strident criticism of the often unaccountable and undemocratic centralization of the Colombian state, where taxes, influence, and treasures of all forms are funneled into the center often with little return seen in the outlying provinces. However, is the Medellín/EPM model any better? Is it any more just for the wealth of Guatemala, Panama or, even, Bogotá to build libraries and museums in Medellín than it is for Bogotá to profit disproportionately from the national treasury?
From the left, strong critiques have been leveled against the privatization of public utilities, and one might laud the elite of Medellín for resisting the urge to sell of EPM; however, when EPM itself becomes a predator of other privatized municipalities is there any difference than if they were bought out by National Grid (a private British multinational)? One might argue that there is more accountability in a publicly owned utility, and it is true that Colombian public bodies are watched over by a relatively autonomous and strong set of regulatory institutions, but these bodies are primarily concerned with preventing fiscal wrongdoing by employees rather than ensuring that these monies are used for the benefit of those who paid them. In fact, EPM customers outside the city of Medellín have no more influence over EPM than they would over a private company. This is even less so for foreign customers for whom EPM operates like any multinational: extracting wealth and shipping it to overseas owners.
I traveled up into northeastern Antioquia, a place where EPM has a strong presence, not only owning the local utilities but also operating massive reservoirs. From the people of these impoverished campesino communities, EPM takes money and floods valleys and gives little in return. They can never attend the orchestral concerts in the city and their children will never study at the EPM-sponsored libraries. Even within Medellín, women’s groups organize against the company’s market-based models, demanding that EPM recognize clean water as a human right and cease cutting off the city’s poorest from access to the tap. Compared to the benefits for the city’s elite—who enjoy not only the full range of EPM’s cultural activities but also the political and economic benefits of having an “educated” city—the city’s poor only enjoy fringe benefits from EPM’s presence; many argue that universal access to water might be more valuable to them than concerts and academic conferences.
While Medellín is remarkable as a city located in the Global South in creating their own multinational, they are not alone in utilizing the corporate model. Today we live in a world where nation-states are increasingly erecting their own multinational corporations through which they travel abroad and exploit the resources of others. The most prominent of these are, of course, energy companies such as Gazprom and Rosneft (Russia), Petronas (Malaysia), Petrobras (Brasil), and PDVSA (Venezuela), but we could also include other examples such as China’s massive overseas mining operations, or the huge holdings of the investment firms of the Gulf States (like Dubai Ports or Iran’s stake in German manufacturing giant Thyssen-Krupp).
While some of these states—in particular Venezuela and China—claim to be operated under socialist or communist ideologies, they function beyond their own borders in a manner identical to privately-owned multinationals. Even here, within Antioquia, outside the city limits, EPM functions as simply another corporation. While it is true that the people of the home states do reap benefits from these corporations, we cannot ignore the fact that their overseas activities operate under a different logic. Moreover, many are deeply intertwined into the fabric of the market, for instance, the China National Offshore Oil Corporation (CNOOC Group) lists several of its subsidiaries on the New York and Hong Kong Stock Exchanges and the PDVSA works closely with Total, Chevron, Statoil and BP.
If we are to understand and adapt to this new world, we must be willing to jettison some of our assumptions about the meaning of private and public enterprise. The old left view, where a public company provided some direct benefit to the citizens of the nation—health care, water, electricity, postal service and rail transport are the classic examples—is largely out of date. While these companies hold on in some places, they have been largely privatized and those that do exist are not the key players in the global sphere. No, the true engines behind places like China, Venezuela, and Russia are corporations that provide indirect benefits—such as the Bolivarian Missions in Venezuela or the Arví Park in Medellín—largely through the extraction of wealth from other places and the funneling it back to the home center. Certainly, the logic of accumulation is different than, say, Chevron or National Grid, but its effects upon the wealth-providing communities is often indistinguishable.
Jesse Harasta is a linguistic and cultural anthropologist who studies contemporary language and nationalism in Cornwall in the southwestern corner of the island of Great Britain. He is a doctoral candidate at Syracuse University and an active participant in Occupy Syracuse and its Graduate Student Committee.