Definition of Nationalisation Nationalisation basically means the taking of control by the government over assets and over a corporation, usually by acquiring the majority or the entire stake in the corporation. There are two basic means by which the government may take assets or corporations into public ownership. The first is via appropriation or confiscation of the assets. The second is by purchasing the assets from their current legal owners. These processes have taken place for decades – from October 1917 in the USSR to latter day nationalisation by populists such as Hugo Chavez in Venezuela and with experiments in diversified countries such as Egypt, Ghana, Cuba, Norway and South Africa under apartheid as explained above. It was fine back then when it benefited the white Afrikaner minority in the country. But when it has to benefit the black majority there is a huge outcry. Why is that? Whenever the topic of economic redistribution and nationalisation gets raised, people point at Zimbabwe and claim that we’ll end up like that if we even contemplate the idea of sharing the economy more equally with everyone. That is absolutely not true. I can’t state that more vehemently. For many years in South Africa during the apartheid days, strategic sectors of the economy were owned and controlled by the Apartheid government and investors never flew or left South Africa. Why do we expect it to be different when the same principles are applied by a black-led EFF government? EFF Launch in Marikana How does the EFF plan to implement nationalisation? The state ownership of minerals beneath the soil will in effect entail the discontinuation of total private ownership of production means in the production of mineral wealth in South Africa. The route towards total transfer of mineral wealth to the ownership of the people as a whole will include the creation of an efficient and impactful state-owned mining company. It will be efficient and impactful because a state-owned mining company should contribute to job creation, while being efficiently managed and administered in a manner that will raise the levels of public confidence in the capacity of the state to do business and contribute to economic development. Nationalised mineral wealth will in effect constitute a very firm basis for the beneficiation of these products in both heavy and light industrial processes in South Africa, which could be left to industrial and manufacturing entrepreneurs, co-operatives and small and medium enterprises, so as to develop the productive forces of the South African economy, which is still reliant on the production of primary commodities. This process will conspicuously be coupled with an effective skills-development, training and education strategy, which will directly feed into a growing industrial and manufacturing process. As part of this programme, the transfer of wealth to the ownership of the people as a whole is not limited to mines only, but should necessarily extend to monopoly industries. The creation of a State Bank and the nationalisation of the Reserve Bank constitute an immediate task and essential to the development of the South African economy, as it can be progressively positioned to improve the existence of state-owned development finance institutions, in order to finance new industries. The State Bank will also provide enterprise finance, housing finance and vehicle finance for all South Africans in a manner that promotes development, not the narrow pursuit of profits. Failure of South Africa’s Big 4 Banks South Africa’s banks have failed to assist in the reduction of poverty, unemployment and inequality. Given the scale and depth of South Africa’s problems, the banks should have more to contribute to transformation, growth and development but they have failed. They have failed in these areas in particular: investment in job- intensive sectors, SMME financing, co- operative financing, infrastructure financing and agriculture financing. Since they are prudent commercial enterprises, our banks are set up to lend to long-established businesses and have mostly ignored the new emerging businesses and they have failed to accelerate growth and effectively put red tape. Since they have failed nationalisation of banks needs to happen here and now. Once the EFF has established a state bank, interest rates will be set to respond to the government’s developmental imperative which is to eradicate poverty for the black majority. Furthermore, nationalisation can yield more state revenue and a more equitable distribution of wealth. State Ownerships VS PrivateOwnership There is this notion that private ownership is good and state ownership is bad. That is a whole load of hogwash that is perpetuated by capitalist ideologies which have proved to be a failure in South Africa. If state ownership of assets were to occur in South Africa it would be held accountable by regulation enforced by a regulatory body. When it comes to nationalising a country’s resources, no one system is better than the other. What we need to be sure of is that at the end of day the state is held accountable. A country’s ability to turn its natural wealth into human wealth expenditures, not on ownership. So this argument that private ownership is good and state ownership is bad needs to be quashed. Immediate benefits of nationalising mines by EFF-led government A sector that is nationalised, will allow the EFF-led government to have direct control over that sector. If the mining sector is nationalised, this would entice the government to sell more minerals within the South African borders rather than export these minerals to foreign countries. If mines were to be nationalised, then the revenue generated would be part of national revenue, and thus would benefit the entire country as there would be more service delivery. Economic development and the total well being of the individual will be improved. South Africa has an unequal distribution of income, this extra revenue will allow government to redistribute income more equally, thus reducing poverty as well as lowering the unemployment rate. All the employees will have compulsory benefits, like the pension funds, health insurance. Nationalised mines will also open a space for the development of new economic centres and the establishment of multiple concurrent industrial development zones, which will reinforce the existing economic centres while developing local economies and absorbing many of our unemployed. Nationalisation has many other economic benefits, including the safeguarding of South Africa’s economic sovereignty and shedding the colonial legacy of being an exporter of natural resources and an importer of finished goods and services. Nationalisation of our mines will increase mineworkers` safety and protection of mineworkers` rights as the state will set this as a top priority whereas privately owned companies are profit-driven and pay less attention to these matters. Furthermore, the environmental costs of mining should be greatly reduced if the state were to take control which will prevent the economy from suffering due to expensive environmental clean-ups. Communities will be one of the primary stakeholders in the mines and they will help decide on the development of the town and cities to avoid the issue of ghost towns like currently have. Conclusion
Posted on: Fri, 01 Nov 2013 09:21:36 +0000
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