Friday, December 11, 2009

ANC Needs to Kill the Nationalisation Talk Now

Dear Jacob: When you're in a hole stop digging

by George Palmer

OK Jacob, your Alliance partners have been bitching and baiting and switching for almost a year now; meanwhile the outlook for new job creation has worsened. Thus far you've been confusing everybody, shifting this way and that to keep people guessing and buy time. You're not an ideological leftist but now you've arrived at a fork in the road. One signpost points to two universally discredited solutions: African nationalism or Communism. These are both Gods That Failed. The other points to a liberated people, a rainbow nation, a free society in which individual choice and initiative is the rock to build on.

[Read Stanley Uys' on the state of the alliance here - Editor]

If you wait around much longer you'll risk being run down. Or run out. So you've got to make a tough decision. That's what leaders - real leaders - do. You've got to decide in which direction to lead South Africa, then focus on priorities, and implement them.

Job One is how to get the economy back on a sustainable growth track because that's the only way South Africa's festering unemployment and poverty problem will stop worsening. Without the right approach the suffering poor - of all races - will begin to lose hope. And when they do, look out, because that could trigger a level of violence that could escalate out of control. And there are plenty of mischief-makers in your so-called alliance - and some in your cabinet - ready to exploit popular unrest and seize the initiative if you don't.

Jacob, it's time for action. If you don't believe that ask Trevor to get you a copy of Shakespeare's Hamlet for bedtime reading. ("To be? Or not to be? That is the question! Whether 'tis better.... " ). But before you delve into Hamlet's fatal indecision scan through Comrade Julius Malema's latest thoughts on nationalising the mines and banks. It's the most unrealistic rubbish you'll ever read. And dangerous too. Talk about fiddling while Rome burns...

Here's what you need to do. First get the SACP to pack away its "hegemony of the working class" or get it out of the Alliance and off your back. Then get the ANCYL to stop speaking nonsense about nationalization of the economy. Communism has proved to be, time and again, an economically ruinous system that robs individuals of their liberty. Not only would nationalisation create no new jobs, it would have a profoundly negative impact on the jobs already there, and on investment, creativity, innovation, productivity, economic growth and the potential for a better life for all. Why?

First because the mere possibility of South Africa adopting a policy of nationalisation is a red flag to investors. Nationalisation amounts to forcibly robbing them of assets they own: it's statutory theft. And once bitten twice shy.

Second, whatever recompense current owners would be forced to accept would have to come from the Treasury and right now the Treasury is facing a double whammy. It's running a big deficit because the recession is decimating tax revenues, forcing the government to borrow more, thereby adding to the burden of future interest payments on already stressed taxpayers. Check with Gordhan.

Third, the economic outlook facing many of South Africa's major trading partners - the US, the EU, and Africa - remains uncertain; slow recovery from the recession carries the risk for all that GDP growth may slip back into minus territory. Not only that. To forestall new asset bubbles, governments and central banks have yet to start the tricky task of drawing down the excess liquidity and the mountain of public sector credit they have pumped into the global financial system to ward off collapse. A single misstep could trigger panic in global financial markets and precipitate a wealth-destroying inflation. Or deflation.

Finally, enforced state ownership of private property in South Africa would do absolutely nothing to lower costs, raise efficiency, create wealth, or generate more jobs. Nor would it enable a meaningful redistribution of the nation's real income. There would be progressively less to redistribute.

Bottom line Jacob, do everyone a favour. Reassure trade partners and investors that nationalisation is permanently off the table. Then tell the ANCYL - and the SACP if necessary - that if they don't accept that to go jump in the lake. You'll go down in South Africa's history books as a wise leader who, at the last moment, saw the light and took his country down the right path.


1 Opinion(s):

Exzanian said...

I reckon Zoema would ditch nationalisation in an eye blink if he could. But he can't, it's the centre plank upon the quicksand on which he (and all the other cadres) rose to power. They need to keep feeding this line to the masses, who will continue to vote them into power. Keep the debate, and the hope for freebies, alive and all will be well. The ANC will rule till jesus comes.