Wednesday, August 05, 2009

Call to nationalise mines nothing more than a red herring

Sentletse Diakanyo went off the boil there for a while but he's back with a good piece.


A nonsensical debate ensued a few weeks ago regarding the nationalisation of mines. The ANC Youth League called for the full implementation of the clauses of the Freedom Charter, which in fact remains vaguely silent on the question of “nationalisation”. At the centre of this call by the ANCYL appeared to be a concern that the majority of people continue to exist on the periphery of economic prosperity when are our mineral resources are being “pillaged” by privately owned mines. But one cannot help notice that this is an age-old tactic used by governments around the world when seeking to divert public attention from real issues that may cause embarrassment to the ruling clique. A peripheral agenda is pursued in full knowledge that it will whip up emotions.

The ANC in the Western Cape and North West is dysfunctional; municipalities are in shambles; parastatals are a national embarrassment; a bloated government (read “expanded patronage network”) is lacking adequate financial resources to fulfil a long shopping list of empty promises made during elections and there is a ceremonial president who appears increasingly incapable of providing leadership. It is therefore convenient that the ANCYL would initiate a nonsensical debate on nationalising the mines.

The ANCYL proposed this aggressive state interventionism in the mining industry at the back of other governments having intervened in the financial industry to prevent total collapse. Many observers and market participants would not necessarily dismiss the fact that the state has a role to play in the market economy as long as its intervention does not interfere with effective functioning of the economy and ensures that measures intended to prevent the total collapse of the system are in place. I suppose the establishment of the National Planning Commission may have created some confusion in the already confused ANCYL on the nature of our economic system. Perhaps they understood this to suggest the country was moving towards a “planned economy” under which their absurd proposal would have been fully embraced.

Some proponents of nationalisation have premised their misguided arguments on the notion that with the global financial crisis, nations have already begun to nationalise losses yet kept profits in private hands while the people that matter remain in the dungeons of poverty. The ANCYL in its position paper on the subject stated that “nationalisation should help build strategic capacity of the state to unlock resources for development and a growth path that is more inclusive and equitable. The strategic capacity of the state through public ownership enables the state to lead other sectors to achieve these broader societal goals”.

This suggests misguided youthful exuberance. Firstly, the issue of nationalisation is peripheral to the challenges facing the youth of today! The ANCYL should concern itself with issues that directly relate to the improvement of the conditions of the youth who are unemployed and have HIV/Aids etc. Secondly, if the ANC ran a corrupt-free and efficient government that delivered on its mandate all these problems of unemployment, education, HIV/Aids etc would ordinarily be addressed and there would be no populist need to blame capitalist enterprises for the failures of the government. Raising nonsensical ideological debates is not going to advance the youth agenda.

The ANCYL position paper on the nationalisation of mines further states that: “We proceed from the understanding that nationalisation is not be-all of economic transformation. In other words, having nationalised key parts of the economy does not automatically mean that indeed the wealth is in the hands of the people and that the people will benefit from such wealth. Nationalisation is not a panacea for South Africa’s developmental challenges, but it should in the manner we are proposing it, entail democratising the commanding heights of the economy, to ensure they are not legally owned by the state, but that they are thoroughly democratised and controlled by the people — their workplaces, their management, and decision-making process.”

It is interesting that the ANCYL admits that its proposal will not transfer wealth into the hands of the people. It speaks instead of democratising these mines. It wants to ensure mines are not “legally owned by the state”, yet elsewhere in the “position paper” it states that “nationalisation, like its opposite, privatisation, can assume various forms: it can be 100% public ownership or 51% or more owned by the state”. It is clear that the ANCYL is confused about this whole issue. It wants to nationalise mines but does not want legal ownership, they also state they want to own either 100% or 51%. It appears the more the ANCYL delves into this debate the more it gets confused.

The ANCYL further insists that the Freedom Charter proposed “nationalisation” even when ANC MP Ben Turok attempted to enlighten them on what the clause in the charter meant. As things stand the government remains the custodian of minerals for the people. Perhaps Julius Malema and his spokesperson, Floyd Shivambu, need political education.

The idea that with nationalisation comes increased number of jobs is preposterous. It should never be a function of the government to absorb the unemployed but rather to create the necessary conditions for employment to take place. A bloated government translates into an inefficient government and that means lack of and poor service delivery. Already the people are revolting against the ANC government that has been good at making empty promises but has failed to make good on them mainly because of corruption and bureaucratic inefficiency! If the call for nationalisation is intended to artificially address the problem of unemployment, then in the long-run we may have a problem. What we need is an economy that is growing on a sustainable level and establishing new industries that advance BEE, create employment and intensify the fight against poverty.

The ANCYL fails to tell us how the government would efficiently run these mines for the benefit of the people when it cannot run a “local municipality” and deliver basic services to the very same people. Instead of getting lost in ideological ramblings, the ANCYL should come up with effective ways for the government to deliver services to the people. Until such time that the government has demonstrated its ability to run the SABC, Denel, Land Bank, SAA, Eskom etc we cannot enter into preposterous and futile debates about nationalisation. What the people want is delivery of basic services and not the cheap publicity stunts that Human Settlements Minister Tokyo Sexwale has resorted to. Does he want to tell us that he has no clue what the living conditions of those living in shacks are? Will the minister be spending the night at other informal settlements as well? Zuma’s government should be condemned for electioneering at a time when people are waiting for the promises made to them to be fulfilled.

Hat tip: Black Coffee

3 Opinion(s):

Anonymous said...

Where does the 'bums' article come from?

Doberman said...

It was from one of the ANCYL conferences held last year. They do it regularly. They like to "moon" the establishment, think it's clever. I think it tells you everything about their mentality.

Anonymous said...

Dobes - Please man, no more pics like that - you put me off my supper!