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Cam Modisane
 
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Why SA needs nationalisation

24 June 2012, 12:32

The debate around nationalisation has been occupying the national imagination and conversation for a while now. There have been proponents and we have all seen in the media how many opponents there are to the issue of nationalization.

I personally feel that the debate in the media to a large extent has been one sided and most economics, academics and other interested parties being opposed to the idea of nationalisation the South Africa’s assets. Some people are opposed to the idea of nationalization simply because it is instigated by an “uneducated, racist buffoon” called Julius Malema and Ronald Lamola (ANCYL Deputy President) therefore it cannot be right.

Sipho and John from the streets have also joined this song and dance of being against nationalization yet they don’t even know what the meaning of “nationalization.” 

In this article I will attempt challenge your preconceived especially those who have been opposed to the idea of nationalization and give you a different perspective that you might have not heard or thought about.

History and Background Around Land in SA

The extent of land dispossession of the indigenous population in South Africa, by Dutch and British settlers, was greater than any other country in Africa, and persisted for an exceptionally long time. European settlement began around the Cape of Good Hope in the 1650s and progressed northwards and eastwards over a period of three hundred years. By the twentieth century, most of the county, including most of the best agricultural land, was reserved for the minority white settler population, with the African majority confined to just 13% of the territory, the ‘native reserves’, later known as African Homelands or Bantustans. Demands for racial equality were violently resisted by the white-minority government up to 1990, with the result that South Africa made the transition to democratic, non-racial government only in 1994.

At the end of Apartheid, approximately 82 million hectares of commercial farmland (86% of total agricultural land, or 68% of the total surface area) was in the hands of the white minority (10.9% of the population), and concentrated in the hands of approximately 60,000 owners. Over thirteen million black people, the majority of them poverty-stricken, remained crowded into the former homelands, where rights to land were generally unclear or contested and the system of land administration was in disarray.

These areas were characterised by extremely low per capita incomes and high rates of infant mortality, malnutrition and illiteracy relative to the rest of the country. On privately-owned (white) farms, millions of workers and their families faced tenure insecurity and lack of basic facilities. Today, South Africa has one of the most unequal distributions of income in the world, and income and quality of life are strongly correlated with race, location and gender.

Definition of Nationalization

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. (Yes, nationalisation is not a new phenomenon in SA it has been done before.) It was fine back then when it benefited the white minority in country. But when it has to benefit the black majority there is a huge outcry. Why is that?

                                                                                                           

The Freedom Charter unambiguously states that “the mineral wealth beneath the soil, the Banks and the monopoly industry shall be transferred to the ownership of the people (socialist-speak for “the State”) as a whole.” Former ANCYL President Julius Malema likes to remind everyone that when Mandela left prison, nationalisation was almost a given for him. But by the time he ascended to power, he was strangely mute on the subject. (TRAITOR)

Whenever the topic of economic redistribution 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. The reason why we seem to think Zim is the only end point of economical parity is because we’ve never had the debate. We’ve never discussed, as a nation, what the options are.

South Africa’s Current Economic State

South Africa is the most unequal society in the world. SA's 20 wealthiest people, who are collectively worth R112.2billion proves that SA is a rich country. 48% of South Africans, 24million people are living below the poverty level of R322 a month!

Our unemployment of 25% - 60%, depending, whom you believe, means we have been in permanent, structural recession since 1910 and beyond. All that changed in 1994 was that the unemployable got the vote.

State Ownerships VS Private Ownership

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 depended on the quality of public expenditures, not on ownership. So this argument that private ownership is good and state ownership is bad needs to be quashed.

 South Africa’s Economy Run By Cartels

The issue of nationalisation cannot be excluded when you have an economy run by cartels. We need to make it easier for small businesses to enter without being squashed by big corporate.  The terms “national reconciliation”, “free market economy”, “equality before the law”, “equal participation” and even “democracy” including the hailed “freedoms” remain an absolute cynical farce for as long as the imperial-colonial apartheid beneficiaries, their economy, the banking cartel and organised crime structures dictate the terms and conditions for the aforementioned without any compromise, without any access to land and the economy.

We constantly hear of big corporations being fined for uncompetitive behaviour. These corporates are not even bothered; they even go to the extent of budgeting for these fines. This shows that they will not stop in their criminal behaviour.

To quote Mayer Amschel Rothschild, founder of the Rothschild global banking dynasty: “Give me control of a nation’s money supply, and I care not who makes its laws.”

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 nationalization of banks needs to happen here and now. Once the banks are safely in state hands, interest rates will be set to respond to the government’s developmental imperative which is to eradicate poverty for the black majority. Furthermore, nationalisation, if managed properly, can yield more state revenue and a more equitable distribution of wealth.

Nationalization of Mines

All we ever hear in the media are worse case scenarios of nationalization. There have been successes and failures in all cases, but it is interesting that some people never site Norway as a good example. Off course the media in SA is pushing an agenda hence success stories are never told. Norway is an example of nationalisation success. Here, a nationalised mine under scientific and professional control could pump profits into infrastructure and development.  If a brave entrepreneur has the guts and the knowledge to challenge and partially defeat the “Big Four” banks at their own game, why can’t a nationalised mine under scientific and professional control pump its future profits into infrastructure and development of the poorest of the poor? Nationalization of the mines is on the cards and we do have educated and talented blacks to see us through it.

Nationalization of the Land Without Compensation

The willing buyer, willing seller has failed us a nation. When we attained democracy and freedom in 1994, black people owned only 13% of the land and white people owned 87% of the land, mainly because of the 1913 land Act and the Bantustan Act of the apartheid government. The democratic government planned to redistribute only 30% of the land within the first 20 years of democracy, so that after 20 years of political freedom, black people would own 43% of the land.

In 2011, less than 5% of South Africa's land has been redistributed. The indications are that, by 2014, we will still not have exceeded 5% land redistribution, which will be 20 years since the democratic dispensation. If we continue with this trend and pace of 5% transfer every 20 years, it means we would have redistributed only 25% of land in 100 years. In other words, in 100 years time, the inequalities between black people and white people will still remain, and this will automatically lead to continued racism and economic subjugation of blacks by white people, like it happened under apartheid. Land  needs to return back to its rightful owners. The colonial invaders were in Africa for plunder and domination that historical fact and history less should be clear by now. Africans long live in squalor in THEIR OWN indigenous space, while the racist and criminal invaders live in the splendour of their African loot. Something has got to give; and we know who MUST give!

Conclusion

In his first public address, former President Nelson Mandela said, "nationalization of the mines, banks and monopoly industry is the policy of the ANC and a change or modification of our view in this regard is inconceivable." What happened? Why did Mandela change from this stance?

We need a radical solution to the problems of marginalization and poverty, which still occur disproportionately among South Africa's black population.

The liberal media (with an agenda) by and large have a one-track ideological opposition to nationalisation, based on their own biases and the monstrous bureaucracy Stalinism, not nationalisation per se, and spawned in the former Eastern Europe. They need to open their minds to the possible benefits nationalisation could bring to workers and the broader public. Perhaps reading Keith Coleman’s 1991 book, “Nationalisation, Beyond the Slogans”, might help and stop this rhetoric against Julius Malema that we see on a daily basis. The hysterical opposition to nationalisation in the liberal media must stop.

This so called intelligent talk needs to stop and we need to emancipate our people economically. Until there is an alternative to nationalisation, the plans to nationalise banks, mines and land should continue without any disruptions.

@Cam_Modisane on Twitter

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