By Jeb Sprague and Wadner Pierre - IPS

PORT-AU-PRINCE, Jul 24 (IPS) - Late last month, President René Préval announced that Haiti's public telephone company, Téléco, would be privatised. Meeting recently with the Haitian Chamber of Commerce and Senator Jean Hector Anacacis of Preval's Lespwa political party, the president finalised plans to sell off the aging enterprise.

The move toward privatisation began abruptly, and according to Téléco, 2,800 employees have been terminated thus far. For decades foreign lenders and multinational corporations have pressured the Haitian state toward privatisation; layoffs are seen as the first step.

Cellular phones have spread rapidly across the country and it is common to hear complaints about Téléco's poor landline service.

One cellular company, Digicel, has grown at a fast pace since 2006, allowing many poor Haitians to own a phone for the first time. By offering incoming calls for free and pre-programmed phones for 15 to 25 dollars, Digicel initially outpaced Voilà and Haïtel, which were charging 50 to 150 dollars for basic phones.

Digicel is also widely popular because of its investment in civic institutions such as sporting events and street signs, and its partnerships with foundations such as Fonkoze, a microfinancer for the poor.

The problem is that after getting the cheap phones, many poor subscribers cannot afford the balance on their phones, despite some of the lowest-priced recharge phone cards selling for about 1.5 dollars.

Haiti's government has justified the privatisation of Téléco by comparing its employment levels with those of the private cell phone companies, adamant that the difference in employee figures reveals gross mismanagement of Téléco.

Préval explained that, "Haïtel S.A., has 500 employees for 350,000 subscribers, Comcel, 630 employees for 650,000 subscribers, Digicel 700 employees for 1.4 million subscribers, Téléco has 3,293 employees for only 150,000 subscribers".

In response to the layoffs, Téléco workers launched protests around the company's Port-au-Prince headquarters. Critics point out that cell phone companies don't require wires being strung in the streets or to perform wire maintenance as do companies using land lines.

Cell tower installation is done by a few highly skilled and paid, often foreign technicians, whereas wire line maintenance is done by a larger and often lower paid, lower skilled work force.

While calls made from cells are more expensive than most Téléco calls, it is extremely difficult to procure a Téléco line. Over 90 percent of phone subscribers use private companies, a vast difference from a decade ago.

Téléco profits from a small fee on every communications transaction with Haiti, whether it originates inside of Haiti or from outside of the country. This includes regular land-lines and all cell phone and calling card communications. Therefore Téléco does have the potential to be financially healthy but it requires many employees to work its various departments, with offices throughout the country.

Préval has committed to paying a year's salary to Téléco employees who are being laid off, as well as those from across much of the civil sector who were illegally fired by the previous interim government.

But labour organisers at Téléco speak of a long-term, quiet campaign to undermine state enterprises. They say managers appointed by officials backing privatisation purposely mismanaged the company in order to justify its break-up, as well as corruption and the use of its infrastructure by competitors as undermining forces.

During his first term in 1996-2001, Préval sold off the Minoterie flour mill and Haiti's public cement company. Supporters of privatisation note that the cement company now provides large tax revenues for the state.

But many small contractors and their clients face cement costs out of reach for those aspiring to live in one-room homes. Cement donations from Venezuela have provided some respite for Haiti's public works.

Brian Concannon, of the Institute for Justice and Democracy in Haiti, recalls that in order to stave off pressure from international financial institutions, Préval, during his first term, dragged his feet and only "let go two of the smallest and least strategic state enterprises." But by the end of his term donors had begun to disengage from providing aid to the state.

With the inauguration in early 2001 of President Jean-Bertrand Aristide, who refused untrammeled privatisation, donors reacted further by cutting off nearly all support to the aid-dependent but privatisation-weary state, placing a further pinch on the civil enterprises.

One recently laid off Téléco worker, while waiting in line to receive his severance pay, challenged Préval's policy of privatisation. He recalled to journalists that prior to Préval's selling off the cement company during his first administration, a bag of cement was 30 to 50 gourdes but now exceeds 200 gourdes -- about 5 dollars. However, part of this is due to the devaluation of the gourde.

Since the ouster of Aristide in a U.S.-backed 2004 coup d'état, the advocates of privatisation have become emboldened.

A donor-sponsored interim government helped formulate a privatisation strategy and fired at least 2,000 workers from Téléco and thousands more from other state jobs, most from poor backgrounds who sympathised with the overthrown constitutional government.

In 2006, Préval was popularly elected to office and the widely disliked interim government stepped down.

Labour organisers explain that conditions have improved under Préval and they take part in talks with the government, but in recent weeks tension has grown with the government's move toward privatisation.

One of Haiti's largest labour confederations, the Confédération des Travailleurs Haitiens (CTH), has protested the government's privatisation plan and the layoffs at Téléco.

In a joint statement CTH Secretary-General Paul Loulou Chéry and his deputy, Hubert Jean, pointed out that Haiti's Commission for the Modernisation of Public Enterprises (CMEP) is "very specific on the way the state should proceed, regarding their modernisation; that is, by management contract, concession or capitalisation."

The labour organisers told IPS that while they support talks with the government, they oppose privatisation that costs jobs and believe the government should instead focus on alternatives to fix the aging state telephone enterprise, as there remains an unmet need for landline services. They point out that neoliberal privatisation policies have led to disaster across Latin America.

In recent days, hundreds of dismissed workers have stood in line at the Téléco headquarters in Port-au-Prince, ironically providing work for U.N. troops stationed in Haiti and the Haitian National Police, who were posted nearby in case protests erupted. Several workers said they felt humiliated -- "as if we were not worthy to be inside," one former employee told journalists.

The director general of Téléco, Michel Présumé, who recently appeared in a debate on Haiti's National Television, argued that privatisation is urgently needed and stressed it could be done in an intelligent manner. "The dividends of the [privatised] flour mill are about 500 million gourdes [13 million dollars]," he observed.

But negligible dialogue is said to have taken place between the employees of Téléco and the director general. The president of the Télécommunications trade union -- who has been fired -- Jean Mabou, has accused the director general of illegally and arbitrarily dismissing people. According to many employees there were numerous instances of employees being fired in order to settle political scores.

Présumé says the number of workers at Téléco will be reduced to 1,200 for the whole of the country, but local press reports put the number at 800.

Préval has appointed a commission to study the privatisation of more state enterprises. The National Port Authority and the Office of Insurance Work and Disease are both likely targets.