Nationalization - I beg to differ
by Wihlem Dempers Meyer
on Jul 12
in Experience
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The past three years have been a very interesting time for South Africa. We live in a country with so much potential, the cream of the crop on the African continent and a world class financial system. If you know me you'll know that I am very optimistic about South Africa, but it's undeniable that we have a few very pressing and challenging issues. One of the few but most debatable and publicized is nationalization of mines.
A statistic out of an article which I recently read indicates that 65% of South Africa's people live on a maximum of R550 a month. My heart breaks when I think of the reality that this probably is an accurate statistic, it literally shook me when I read it. If it doesn't shake you, there is something wrong. By looking at statistics such as these it is a reality that the majority of our country's people live in very impoverished conditions and that intervention is very much needed. The big question is how do we uplift these people from the unbearable conditions they live in? How do we go about distributing income evenly and equally? The answer is definitely not easy, but at the moment I don't believe it's nationalization of mines. My mind might change, I always say why do you have a mind if you can't change it, but this is my position at the moment. I can't see how this can be viable, the risks are just too great. The main pillar on which a healthy and world class economy rests is having a free market economy where competition and free trade is encouraged, not an economy where the state intervenes. Since I've been in the States I have spent some time with people working in various investment departments. When I mention the possibility of this to them, they can't believe their ears. The point is that it's all about what the rest of world thinks of our situation. It's none of their business, but they actually have some big things at stake if something like this happens. The mining industry is huge and attracts billions of rands of investments in stock markets and trade on an annual basis. The South African mining industry contributes directly and indirectly to 18.8% of annual GDP, which means that this is a very volatile market where investors are very actively investing in on a day to day basis. Our problem with being a developing country is that a lot of our capital and investment comes from abroad, therefore they do play a big role.
History has shown that the state does not have the ability to manage or govern their companies in a successful manner. South African Airways, Alexkor and Eskom jumps to mind. Expertise is something that the private sector understands very well and healthy corporate governance is something which it is very successful at implementing effectively. This would be a big challenge for government to overcome. Some other things are that government cannot be assured of generating the same amounts of revenues as when a mine was privately owned. Government enterprises will typically have a lot of other things on its agenda when companies would like to do business with them, which discourages trade and takes time in making decisions etc. There are a lot of other reasons why this does not seem attractive to me.
The dilemma which remains is that the majority of our country's people are very poor and unfortunately this is also something which the developed world will not fully understand. I recognize this as one of the biggest if not the biggest problem our country faces, but I still can't see us taking an immense risk such as nationalization of mines when we are not sure of the outcome. Is the risk of losing our economy worth risking nationalization? I feel alternatives should be examined to distribute income to the poor, this I will always acknowledge. What these solutions are I'm not entirely so sure of. An idea which I strongly would advocate, and which I am not sure of whether it is effectively taking place, is that active engagement should take place on all these issues. There should be active engagement on all levels of society on such issues. Private sector, the government and the people should engage and have in-depth discussions on finding common ground on these issues. It's not only a few stakeholders that should be involved, but the whole spectrum. We are not doing this effectively and the effect of this is that we make assumptions about various things regarding the above mentioned, as media can also sometimes persuade us. South Africa's future is very much depending on the next few years and I am nervously awaiting a consensus on what the future holds for us.
Week 4 has been a big highlight for me. The theme for the week was about the African American Civil rights movement and how it compares with South Africa. We met legends such as Congressman John Lewis and Senator Julian Bond. These amazing men fought alongside Martin Luther King and their stories were really interesting. Passion is what I see in them, a passion to fight for their people. We visited Anacostia and had a discussion on Apartheid and the Civil Rights movement with some American students. On Friday we went to see the Holocaust museum. If I said that this was great I'd lie, as it was a very explicit and real experience. All and all I think it was important to see it and how the human race through the ages have failed to see all human beings as equal.
One of my highlights of the trip so far was the visit to Mount Lebanon Baptist Church, a traditional African American church. The passion and seriousness of how they go about having a relationship with God was great to see. The singing was just on another level. After church we went bowling with the youth from church and we had a great time.
I can't believe the end is approaching, I thoroughly enjoyed it, but I'm also missing my fellow South Africans.
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