There are people who do not like Julius Malema. I am not one of them. He is a newsman’s dream. He has that special quality of being able to make news on an ongoing basis. His like, to my mind, are too far and few between.
Without his utterances, there would be less news and less to talk about. Newspapers and their associated websites are taking financial strain at present, so costs are an important issue. But for this I would say that there is a strong case for every news house to assign a permanent reporter to cover Julius. Ideally, this should be in his home. As he awakes in the morning, the reporter gets his thoughts for the day and publishes them.
In the age of Twitter and blogging, this is all possible. In this way the publisher is ensured a continuous stream of fresh thoughts from Mr Lip.
I can see the idea catching on. News is a very competitive business, and there could easily be a whole press corps living with Malema to catch his latest missive.
Talking of missives, Malema wants to nationalise the mines. I read that ANC boss Gwede Mantashe is less keen, saying that this is not ANC policy, but ANC mouthpiece Jessie Duarte welcomes discussion on the issue. The top boss, Jacob Zuma, is silent so far on this one.
Malema’s statement on nationalisation does not tell us how he would go about this.
Broadly there are two routes. In the first, you pay market value for the assets that you are acquiring. This is not completely unlike Xstrata trying to acquire Anglo American. In the second, you don’t pay, you confiscate.
The timing could be quite good. Commodities have taken a huge smack after the meltdown last year, but it would still cost R1,2-trillion to buy all the mining companies listed on the JSE. A year back the same purchase would have cost R2,2-trillion.
Nationalisation through purchase would still cost a bomb, though. The budget deficit is heading towards 7% of GDP — R140-billion — before we think about financing Malema’s aspirations.
Assume we could borrow enough money at 10% interest to fund Malema’s really big buyout, it would cost R120-billion a year in interest and push the budget deficit to about 13% of GDP, more or less that of the United States’s (13,2%).
I don’t think this would scare Malema. Key to his thinking is that if the US can nationalise as it has been doing with its banks, and to a lesser extent General Motors, then we can do it too.
I like his thinking. Go big, or go bigger.
But we should not forget there are differences between us and the United States. As a developed economy its people are largely housed and educated. We would be wasting money buying banks and car companies when we still have massive investments to make in social and physical infrastructure.
Whichever way you look at it, we would not be able to stump up the funds for Malema’s dream.
So confiscation it would have to be. We would thank investors for the R1,2-trillion that they have currently collectively put at risk in our mining sector. But we’d attach the assets anyway.
It would be an outrageously emboldened move. We could call it the Malema manoeuvre. It would be remembered for generations to come as the day we squandered our present and future forever.