/ 4 August 2011

Nationalisation: It’s how and when — not if, says Cosatu

Nationalisation: It's How And When Not If

The African National Congress is researching how to execute nationalisation — not merely its feasibility, its tripartite alliance partner the Congress of South African Trade Unions said in Johannesburg on Thursday.

“If business needs certainty on this issue, they should be certain that the ANC is not researching the feasibility of nationalisation — it is researching models of implementation,” Cosatu economist Professor Chris Malikane told the South African Chamber of Commerce and Industry’s (Sacci) discussion in Johannesburg.

Malikane said it was expected that the task team formed by the ruling party to study the viability of nationalisation in South Africa would produce a report advocating the formal adoption of nationalisation as an ANC policy.

The model of nationalisation to be implemented would also not be restricted to the mining sector, but also apply to agriculture, general production and banks, according to Malikane.

“We’ll have to compensate in the interests of the public, but not in a way that will cripple the South African state,” he added.

This included land being owned by the state outright, and farmers paying a fee for its use, as arable land was a natural asset.

Malikane maintained that support for nationalisation did not only come from the ANC Youth League, which had been the most vocal proponent of the policy, but also from ordinary members of the South African Communist Party (SACP), uMkhonto weSizwe (MK) Veterans Association and the ANC itself.

“If you were in the ANC national general council last year you would have realised that everyone was supporting nationalisation from the floor,” he said.

Policy confusion
The labour federation’s comments also fly in the face of recent comments from government ministers drawn into the issue.

Public Enterprises Minister Malusi Gigaba on Monday told a meeting of the American Chamber of Commerce in Johannesburg that the debate around nationalisation is hurting the economy.

While conceding that the debate was legitimate, Gigaba said talking about nationalisation “harms the good image and investments of the country”.

Hot on the heels of Gigaba’s comments, Mining Minister Susan Shabangu on Tuesday reiterated this stance, saying reckless debate on the issue harmed job creation and deterred foreign investment.

Both, however, stopped short of dismissing the idea entirely.

However, the ANC’s other alliance partner, the SACP has been vocally opposed to the idea, with its general secretary Blade Nzimande arguing that nationalisation would be used to bail out failed BEE mining enterprises.

With the ANC’s next elective conference approaching in December 2012, the issue of nationalisation is seen as a major issue, and will likely form the basis of the platform upon which the next generation of ANC leadership will be elected.

President Jacob Zuma has always maintained that nationalisation is not government policy, but concedes the ruling party is currently debating the issue.

This has also been the stance of ANC secretary general Gwede Mantashe, who had previously rebuked Shabangu and other ANC members who had appeared to pronounce on the issue while it was still being deliberated.

Killing the patient
All other commentators at Sacci’s debate, however, argued against nationalisation, advocating instead sustained economic growth as the solution to South Africa’s economic problems.

“Prescribing nationalisation as the medicine to cure South Africa’s economic problems is not going to work — it will kill the patient,” said Roger Baxter, a senior executive at the South African Chamber of Mines.

Baxter further argued that if nationalisation were to go ahead, foreign investment would be “off limits” and the country’s credit rating would collapse.

Growth and development
Frans Cronje, head of risk analysis at the South African Institute for Race Relations, told the audience two vacuums had been allowed to develop in the country.

“You have an economic vacuum, whereby people are shut out of the economy due to poor education and lack of access to the labour market; and a political vacuum where there is no party to represent the voice of the black youth,” he said.

Cronje argued that this would only be rectified once South Africa could maintain a sustained growth rate of over 5% for at least five to seven years.

This was echoed in part by Krister Janse van Rensburg of the Federation of Unions of South Africa, who contended that there was “no easy way out”.

“We must avoid shortcuts and expensive experiments and be careful of race-based and ideologically inspired arguments,” he said.