Sunday, September 05, 2004

The War on Business

Dr. Khaled M. Batarfi,

Sometimes it seems as if there is a secret war on business led by officials and bureaucrats who regard businessmen as the enemy. Somehow those people have developed the notion that all capitalists are corrupt, scheming, unpatriotic selfish individuals who should be checked, controlled and restricted. The result is all the maddening rules and regulations, produced by different ministries contradicting one another and competing for the ultimate say. Years may pass and vast sums be paid before a project is approved. And after the project is finished, things may change.
No man-made laws are immutable. At least, however, nobody should amend the rules overnight without consulting with those affected by the change; certainly the rules should not be changed in the middle of the game as they sometimes are here. You issue me a license today to open a shop and after I have spent my life savings doing so, you decide to withdraw my license or introduce new regulations that will completely disrupt all my plans or — and this is a cruel new twist — open a shop in competition with mine.
When public hospitals and colleges were unable to cope with demand, we encouraged private investment. Many people took up the challenge and built good hospitals and schools. With a little help and in spite of the most confusing standards and rules, they still managed to provide services equal to, or better than, public hospitals and universities. The state funded institutions have, just like the private ones, recently begun providing services and instruction for those who are willing to pay. Insured as well as rich patients may choose to get faster and better service in specialized, military and university hospitals. Students who cannot afford private colleges but don’t qualify for free education pay less at government universities.
While this is good news for patients and students, it is unfair competition to investors who don’t get public facilities and funds to subsidize their services. Such tactics, if continued, will force many institutions to cut costs drastically which may affect the quality of their services. Some may leave the business and new investment will be discouraged.
Instead of competition leading to better and more affordable services, the opposite has happened and we are all losers. With competitors defeated, state hospitals and colleges won’t have the incentive to improve services, and then we are back to square one.
I do appreciate the budgetary pressures that have led public institutions to sell part of their services and the desire of many parts of society to have access to more choices and more affordable services. Instead of win-lose situations, however, we could all win if we let the private sector run the private business for public institutions. That way, health and education businesses could offset their losses and coordinate service fees to avoid crippling price wars. And we could stop yet another war on the private sector.

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