OPPOSITION | PRO PRIVATE SECTOR

Motion: THB that developing countries should prioritize the development

of state-owned enterprises over private industry. (Such as airlines, utility
companies like electricity, gas companies, etc.)

1ST SPEAKER | RJAY

I would be starting in 3…2…1...

State-owned enterprises (SOEs) are often claimed to be less profitable and less efficient
compared to private corporations. According to Grout and Stevens (2003), So why prioritize
on something inefficient for the country?

Honorable judges, fellow debaters, and observers, ladies, and gentlemen, a good day to all. I come
forward with our house’s arguments in opposing the motion which is: THB that developing
countries should prioritize the development of state-owned enterprises over private
industry. (Such as airlines, utility companies like electricity, gas companies, etc.)

I would like to start off by refuting and pointing out the lacking and faulty arguments mentioned by
the proposition team.

REFUTE REFUTE REFUTE

Moving forward. Let us define the terms in the motion. Developing countries are nations that
have low gross domestic product and have less mature and less sophisticated economies.

And as for State owned enterprises, OR SOE’s they are commercial enterprises where the
government has significant control through full, majority, or significant or minority ownership. These
ran by the government to generate funds and money.

Going forward,
As the opposition team, we would like to answer and discuss our points using these questions
which would hopefully make you esteemed adjudicators to side by our house::
1. Will the governments of developing countries be able to efficiently handle the state
enterprises during national crises as smoothly as the way that private companies
operate, just like in today’s situation, the Covid - 19 Pandemic?
2. Can a corporation bring better stability than State Owned Enterprises can?
3. Where does the government’s ability to provide end?

As First Speaker, Rjay Neil D. Bañas, I would answer the first question. The second speaker,
Michael Joshua, will address and go through the second question. And last off, the third speaker,
Mark Erwin, would talk about our house's main points and arguments, the opposition against the
weak faulty points of the proposition.
Now onto my task: Will the government of developing countries be able to handle the burden
of operating these commercial enterprises amidst crises, just like in today’s situation, the
Covid - 19 Pandemic?

After and during major crises, developing economies tend to resort to state intervention policies
to achieve desired outcomes of public interest. Historically, SOEs have been called upon as
producers and suppliers of emergency supplies. During the current crisis of COVID-19,
governments are under pressure to maintain public services and need to guarantee the availability
of vital goods and services at a time when supply chains may be severely disrupted.

In Ethiopia, 67 textile SOEs (together with private textile firms) have partly switched their
production processes to manufacture protective face masks

Nevertheless, governments with weak public finances in developing countries will struggle to
provide adequate financial support to their SOEs. The support will also need to be well designed
and targeted to the crisis to prevent the provision of bailouts to cover SOEs’ inefficiencies and
mismanagement, like in the Covid - 19. In addition, poorly designed emergency support to SOEs
can often undermine corporate governance and transparency of SOEs and generate market
distortions, i.e. also adversely affecting the private sector.

At the same time, many governments struggle to manage SOEs effectively. Pervasive concerns
exist that many SOEs are inefficient, entail considerable risks to government budgets, and are a
conduit for corruption. Getting the most out of SOEs is crucial since several governments depend
on them to cater to their citizens and to promote economic and social development.

In times of major economic crisis, the contribution of SOEs to the national budget becomes
negative. This signifies the realization of fiscal risks. The government’s fiscal balance may
deteriorate as the government continues to offer considerable support to loss-making SOEs, e.g.
through subsidies to help cover their recurrent expenses and large capital transfers to major SOEs.

In Brazil, for instance, almost a third of SOEs were making losses and in 2018, state governments
transferred about US$2.9 billion in capital transfers and an extra US$1.2 billion in subsidies to their
SOEs. The financial shock from COVID-19 has just made things worse and, hence, the fiscal
burden linked to SOEs is expected to grow.

Another possible source of macroeconomic instability and fiscal risk from SOEs is the complex
network of links between non-financial SOEs, public banks, and subnational governments. Some
of the biggest SOEs in developing countries have amassed significant debt in the years leading up
to COVID-19’s outbreak in 2020, partly by borrowing from public banks. Any financial distress in
these SOEs (e.g. national airlines and public utility companies) could put stress on the public
banks, which in turn might affect their ability to provide credit to the rest of the economy (e.g. the
private sector) and necessitate financial support from the government.

But then again, how will the government be able to readily and effectively finance these SOEs if
the country itself is not abundant in wealth, or again, not well developed? What’s worse is that
because of the need for funds to sustain and take care of these SOEs, the government might be
and will be pushed to raise taxes or borrow money from banks just to get the funds needed.

Let us not undermine the fact that TAXES are the main source of revenue in developing countries.
So, instead of the SOEs being the one to help alleviate the economic burdens of the country and
the people, the SOEs themselves are now the main focus and priority of the government and is
now the one that causes more problems to the country. Shifting the priority on SOEs, will not
benefit the public of Developing Countries.

I would also like to pre-empt an argument that the proposition might bring out about how private
companies only care for profit and the SOEs focus on the public and the consumers. This is just a
generalization made by the other side, because are we forgetting the fact that whether we were a
private or state-owned economy, our main audience, is the citizens and the people who buy our
products. How can we say that one side is prioritizing more of the welfare of the people if privates
rely on the feedback of the customers in order to generate profit or provide the products and
services demanded? It is not sensible to say that this side focuses more on the people more than
the other side when both of them truly do.

So, Will the governments of developing countries be able to efficiently handle the state
enterprises during crises? No, they can’t.

Therefore, Honorable Judges, I highly encourage you to side with our side of the house because
we, the opposition team strongly believe and support our stand of opposing the MOTION THB
that developing countries should prioritize the development of state-owned enterprises
over private industry. (Such as airlines, utility companies like electricity, gas companies,
etc.)

With that, I rest my case and let us now move on to the next speaker. Thank you.

2ND SPEAKER | MJ

3RD SPEAKER | KUYA MARK

REPLY SPEECH | RJAY

Good day once again to the honorable judges, my opponents, and everyone else present in this
premise.

OUR HOUSE IS AGAINST THE MOTION: THB that developing countries should
prioritize the development of state-owned enterprises over private industry. (Such as
airlines, utility companies like electricity, gas companies, etc.)

Firstly, there was a clash between the points about

1. The opposition had said that

2. But our house has opposed this argument by saying
3. This clash point weakens the stand of the opposition team, therefore it is evident that we the
proposition has gotten the upper hand

Secondly,

1. The opposition argued that

2. But our side countered this argument of theirs by pointing out
3. It is evident in this clash that we the proposition has gotten the advantage, while also
weakening the stand of our opponents

Thirdly or lastly,
 1. They argued that
2. But our house opposed this argument by pointing out that
3. And again, in this clash we the opposition has gotten the upper hand

Our team has been assertive in answering the points raised by the other team. Although our
rebuttals and arguments were made and based on the Parameters and terms of the other house,
our house’s arguments and points successfully rebutted and turned down their points which
weakens their stand and makes it clear that we have one this debate. Our arguments are backed
up by empirical facts, and have engaged truly within the debate and provided points that made
more sense, and take note, not ambiguous, hypocritical, and fallacious.

All throughout the debate, the arguments, rebuttals, and statements made by our opponents were
unclear, unfocused, and are not backed up by empirical fact nor logical data, thus, this leads to a
non-substantial debate.

Therefore honorable judges, I highly encourage you to side with our house, the opposition,
because we strongly support our stand of opposing the MOTION:THB that developing countries
should prioritize the development of state owned enterprises over private industry. (Such as
airlines, utility companies like electricity, gas companies, etc.
Thank you

PREEMPTIONS | POSSIBLE POIS

1. Welfare of the Public and Consumers. the proposition might bring out about how private
companies only care for profit and the SOEs focus on the public and the consumers. This is
just a generalization made by the other side, because are we forgetting the fact that
whether we were a private or state-owned economy, our main audience, is the citizens and
the people who buy our products. How can we say that one side is prioritizing more of the
welfare of the people if privates rely on the feedback of the customers in order to
generate profit or provide the products and services demanded? It is not sensible to
say that this side focuses more on the people more than the other side when both of them
truly do.

Another point is that although companies are all profit-oriented, the big people in the
private sector’s goals and objectives are aligned with the production of the needs and
demanded products and services of and for the people. They generate money by producing
quality products and services for the public. The people benefit, the company benefits, and
the economy benefits, it's a win-win. Unlike the state-owned enterprises, when the money
reaches the government, where it is supposed to go to, there are high risks of that fund
disappearing as developing countries are highly susceptible to corrupt officials or the big
people of the government. Therefore, the money is just straight from the poor people and
into the pockets of the greedy-high authorities. This creates an economic depression and
burden to the people.
 2. Burden of Managing and Running the Enterprise. The proposition might bring out the
argument about how is the government going to be capable of handling these enterprises
or COMPANIES if the government are full of officials which only know and focus on running
or leading the country. Well, this is illogical. Let’s say there was a canteen in a school that
sells food to the students for school funds. Do you think the teachers will handle the
cooking and serving? Exactly, no! The school hires cooks! Specialized in handling the
kitchen which is the same as to the SOEs! The lawmakers won't go to these enterprises to
handle them, they will hire skilled managers to handle these enterprises. Their point of how
they think that the officials will handle the enterprises is straight-up illogical!

3. SOEs are likely to have the most distortive effects in developing country markets because
they generally are smaller and private sector activity is already constrained by other factors,
such as a poor business environment and limited human capital. Weak regulation,
monitoring, and oversight—together with the absence of a well-developed competition
framework—reinforce distorted markets and fail to deter anticompetitive behavior. Further,
when government-backed SOEs in receipt of extensive support is active in foreign markets
they face a higher risk of international disputes and higher tariffs.

DUMP SECTION