/ 5 August 2011

A foregone conclusion, says Cosatu

A Foregone Conclusion

A senior Cosatu economist has warned business that nationalisation will take place in South Africa and the only outstanding issue is how the policy will be implemented.

“If business needs certainty on this issue, it should be certain that the ANC is not researching the feasibility of nationalisation, it is researching models of implementation,” Chris Malikane told a debate on nationalisation hosted by the South African Chamber of Commerce and Industry in Johannesburg on Thursday this week.

Malikane said that the task team set up by the ANC after last year’s national general council in Durban to study the viability of nationalisation would produce a report advocating the policy and that if it did not, it would be roundly rejected.

The model to be implemented would also not be restricted to the mining sector, but would also apply to agriculture, the banks and “general production”.

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

Nationalisation would entail all land being owned by the state and farmers would lease it for a fee, because land was a “natural asset”.

Malikane maintained that support for nationalisation came not just from the ANC Youth League, which has been the main proponent of the policy, but also from ordinary members of the South African Communist Party, the Umkhonto weSizwe Veterans’ Association and the ANC itself.

“If you were in the ANC NGC last year you would have realised that everyone supported nationalisation from the floor,” he said.

Malikane’s comments fly in the face of recent assurances from government ministers drawn on the issue.

‘The good image’
On Monday, Public Enterprises Minister Malusi Gigaba told a meeting of the American Chamber of Commerce in Johannesburg that the debate on nationalisation “harms the good image and investments of the country”.

Hot on the heels of Gigaba’s comments, Mineral Resources Minister Susan Shabangu on Tuesday reiterated this stance, saying talk of nationalisation damaged attempts to create jobs and attract foreign investment.

Both ministers, however, stopped short of dismissing the concept entirely.

Paradoxically, the ANC-allied SACP has been vocally opposed to nationalisation of the mines, with its general secretary, Blade Nzimande, arguing that it will be used to bail out failed black economic empowerment mining enterprises.

President Jacob Zuma has consistently maintained that nationalisation is not government policy, even though the ANC is investigating the issue.

This is also the stance of ANC secretary general Gwede Mantashe, who has previously rebuked Shabangu and other ANC members who have pronounced on the issue while it is still under party consideration.

All other commentators at Thursday’s debate argued against nationalisation, advocating 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, senior executive at the South African Chamber of Mines.

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

Frans Cronje, the head of risk analysis at the South African Institute of Race Relations, said that 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,” Cronje said.

These shortcomings could be rectified only if South Africa maintained a sustained growth rate of more than 5% for at least five to seven years, he said.

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.