Economic liberation is a powerful message

2011-06-25 11:03

Mining remains at the heart of the South African imagination, says author and wise man Moeletsi Mbeki.

“The sector is still the heart of the South African economy – it drives GDP. And the symbolism of mining among the rural poor is still vivid,” he says.

Southern Africa’s rural areas are filled with the detritus of the mining sector: workers who arrive home in body bags; others who spend their last years wracked by silicosis.

“Julius Malema knows that in the eyes of poor Africans, mining is a disaster.” And so Malema has picked mining as his symbol and sword of a final economic liberation. It’s an easy target and a typical demagogue’s solution, says Malema, to poverty so mind-numbing that South Africans often turn their back on it.

Mbeki’s latest book, Advocates for Change, is his antidote to his first bestseller, called Architects of Poverty, which sought to paint an anatomy of African poverty.

This book is meant to offer the solution. The majority of the black African population is officially poverty stricken, the book reminds us.

Mbeki has picked 11 African authors to write a salient chapter each on topics ranging from education to mining and regional integration.

Each author is a specialist and I found the book an easy read filled with useful information presented either as narrative text or in graphs and text boxes.

Mbeki is touting his book as an African solution. The continent’s growth story and its renaissance is being chronicled by the multinationals and he says the book is an attempt to show that the regional brains trust can do its own thinking. Thank you very much.

The most interesting chapter is by Paul Jourdan, who writes about the future of the African minerals complex.

He, together with economist Pandy Pillay, lead the ANC commission of inquiry into whether nationalisation is a policy option for the South African mining industry.

The answer in the book puts us on track to understand where ANC thinking on this topic may venture shortly.

Jourdan’s thesis is that the free mining model that has characterised the exploitation of the continent’s abundant resources has never worked for its people.

But he doesn’t think that state ownership is the panacea to that problem.

Neither does Mbeki.

“Nationalisation’s not a sensible idea. The mining industry is anchored in the import of capital and technology.

“You will load the economy with a massive burden.”

Jourdan’s diagnosis and solution is argued at some length and with dexterity. His core argument is that the mining industry and the proceeds from it must be used to reindustrialise southern Africa, which is home to the richest deposits of minerals in the world.

Here’s the core paragraph from the book which I believe will set the discourse when the ANC report is finally released for public comment.

“A resource rent tax of 30%-50% on all excess profits above a reasonable (expected) return should be imposed on all resource exploitation concessions or licences and should form the basis of offshore regional development funds to finance long-term regional physical and human infrastructure.”

It’s not nationalisation, but neither is it likely that the local mining industry will enjoy the status quo.

How has ANC Youth League president Julius Malema come to own this place in economic history? It was, after all, because of his pushing that the Jourdan group was instituted.

“Malema is emerging as the real leader of the ANC. He is the only one with a vision and a message.

The rest of the national executive committee does not have one; neither does Jacob Zuma or his top six (officials who run the ANC).
“And economic liberation is a powerful message.”

Expropriation of land without compensation is also a powerful message, but an equally wrong-headed one, says Mbeki.

The chapter by Mandivamba Rukuni is apposite as it seeks answers to how the continent can ramp up agricultural production for food security and as a growth industry.

Expropriation is a simplistic answer to a complex problem.

“The challenge for agriculture is how to makes systems more productive. In Zimbabwe, there was insufficient capital for either peasant or commercial farming,” says Mbeki.

“Politicians think that land expropriation falls on fertile ears, but it often doesn’t,” he believes.

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