NATIONALISATION is the wrong policy prescription for South Africa’s
socio-economic ills of poverty and unemployment. The reason poverty and
unemployment remain as high as they do is not because the country’s mines, for
example, are run by private-sector companies and not state-owned
enterprises.
So shoving a bigger chunk of the country’s economic resources into
the hands of the state won’t create jobs and reduce poverty.
Yet the proponents
of nationalisation continue to trumpet it as the panacea to this country’s
socio-economic ills.
The proponents of the nationalisation of mines and, most recently,
the South African Reserve Bank, have yet to outline a cogent case of how state
capitalism on its own will create jobs and reduce poverty. It’s not clear, for
example, how the ownership of the Reserve Bank by private shareholders is a
hindrance to the agenda of a developmental state.
The inflation target that directs the work of the bank’s monetary
policy committee is set by cabinet through the finance minister. It has nothing
to do with the bank’s shareholders.
The calls for nationalisation appear to be based on the assumption
that the state has the capability to run mines profitably and do so for the
benefit of the poor. However, the history of existing state-owned enterprises
calls for caution. With a few exceptions during the past 15 years these
enterprises have lurched from one crisis to another, some becoming regular
recipients of bailouts.
They have been a drain on limited state finances rather
than being net contributors to economic prosperity.
Most state-owned companies have yet to run with any stability for
longer than five years. SAA, Transnet, the Land Bank, the SABC and Denel have
all had financial and governance problems. Even Eskom, which has long been one
of the best managed parastatals, veered off the good governance track last
year.
Of course, there are exceptions such as the Development Bank of
Southern Africa and the Airports Company of South Africa.
The problems of state-owned enterprises can broadly be split into
two: financial and governance. The latter refers to the regular interference by
political office bearers in the day-to-day running of these enterprises. Boards
of directors of state-owned enterprises have for all practical purposes been
turned into lame ducks as politicians meddle in the running of the firms.
So it makes very little sense for a country that has yet to find a
successful formula for running its existing state enterprises effectively to
create more.
Also, a country with developmental needs as huge as ours can ill
afford to borrow billions of rands from financial markets to buy private
shareholders out of existing mines and the SA Reserve Bank. A cheaper and more
sensible option is for the state to cajole the private sector to buy into its
developmental agenda. In the Reserve Bank’s case the solution, if indeed there
is a problem with how the bank is carrying out its inflation mandate, is much
easier: government must change the bank’s mandate to make it much more
accommodating of its development agenda.
South Korea, Japan and Taiwan rose from the bottom to the top of
the economic ladder propelled by a developmental state model in which their
governments were effective. They proved that nationalisation is not a necessary
condition for the success of a developmental state.
- Mathebula is the non-executive director of Vuma Reputation
Management. He writes in his personal capacity.
ARGUMENT FOR - By Floyd Shivambu
THE ANC National Executive Committee lekgotla finalised and adopted
a detailed perspective on the nationalisation of mines in South Africa. The
lekgotla agreed that the ANC Youth League’s perspective on the matter is a
coherent, concrete and decisive perspective on how mines will be
nationalised.
Guided by the aims and objectives of the Freedom Charter, the ANCYL
conceptualisation of the nationalisation of mines is that it should result in
the democratic government’s ownership and control of mining activities,
including exploration, extraction, production, processing, trading and
beneficiation of mineral resources in South Africa.
Nationalisation includes the following:
- It should be accompanied by a thorough transformation of
state-owned enterprises.
- It can assume various forms: it can be 100% public ownership, or
51% or more owned by the state, or established through partnership arrangements
with the private sector.
- It will involve expropriation with or without compensation.
- It is not meant to bail out indebted mining corporations.
The Freedom Charter guides the programme of nationalisation of
mines, but there are other reasons why nationalisation should take place:
- ?To increase the state’s revenue and improve working conditions.
Mine workers should be adequately paid and their work conditions improved.
- As a basis for industrialisation to create more sustainable jobs
for our people.
- As a means to safeguard sovereignty
- As a basis to transform the accumulation path in the South
African economy, so that the country is not overly dependent on the export of
natural resources and the importing of finished goods and services.
- To transform South Africa’s unequal spatial development patterns
so that all communities with economic potential are given necessary attention in
terms of development.
For nationalisation to happen, the discussion document adopted out
of this lekgotla specifically proposed the following:
- The state should establish a mining company to control the
country’s mineral resources and bring together all the country’s mining
interests. Importantly, that company should attract the best skills, expertise
and knowledge.
- The state should adopt an expropriation model, which will specify
how the state should expropriate economic activities with or without
compensation.
- The state should amend the Minerals and Petroleum Resources
Development Act (MPRDA) to include a clause compelling all mining corporations
to enter into a partnership with the state for a licence.
The ANCYL will in the next few months engage alliance partners,
business organisations and the Chamber of Mines in the programme towards
consolidation. We will also visit countries that have greater control of
strategic sectors of their economies.
We do not expect capitalists such as Nicky Oppenheimer to support
nationalisation because he is protecting his ill-gotten wealth, currently worth
billions of rands. While not openly supporting nationalisation, Patrice Motsepe
has said in a constructive manner that if it happens in the interests of SA, he
would support it.
If greedy and unethical capitalists think that they have a hold on
the ANC through Mines Minister Susan Shabangu, then they are misled. Shabangu is
not the ANC and does not understand the ANC.
- Shivambu is ANCYL spokesperson. The amended Act should apply to new mining licences and all those who seek to renew their licences