‘As articulated in its macroeconomic strategy, Government has committed itself to a continuing process of economic liberalisation, thus strengthening the competitive capacity of the economy, fiscal and tariff reform and bureaucratic deregulation. These are essential steps towards enhancing the country’s competitiveness, attracting foreign direct and portfolio investment and creating a climate conducive to business expansion.’
What could be clearer, or wiser? But this reference to GEAR in the October 1998 White Paper on A Minerals and Mining Policy for South Africa was followed a few lines later by a policy statement that ‘Government’s long-term objective is for all mineral rights to be vested in the State for the benefit of and on behalf of all the people of South Africa.’ And, restating this policy as ‘agreement in principle that the mineral rights will vest with the state’, Phumzile Mlambo-Ngcuka, the minister of minerals and energy, has just announced that the Minerals Bill will be tabled at the first sitting of Parliament in the New Year.
Will the minister come up with ‘just and equitable compensation’ or face a constitutional clause 25 challenge? Perhaps not. Kader Asmal, the (then) minister of water affairs and forestry, steered through the National Water Act of July 1998 which established the National Government as the public trustee of the nation’s water resources. There was no compensation for lost private and riparian water rights, and no constitutional challenge either. And Dullah Omar, the minister of transport, hopes next year to implement the National Taxi Task Team recommendations to formalise and regulate the taxi industry as an integral part of the formal public transport sector combining rail, buses and taxis. Presumably Omar won’t be paying just and equitable compensation either.
What these three measures – water, minerals, and taxis – have in common is that they nationalise private property. Or, if you prefer, they move from partially private property somewhat in the direction of greater state ownership and control. It would be interesting to hear about this from former president Mandela and other officials who have periodically assured us all that nationalisation is no longer on government’s agenda.
Some might argue that such moves are necessary and desirable, enabling government to ‘level the playing fields’ before ‘privatising’ everything again ‘properly’. Never mind who ‘nominally’ lost water rights and who ‘technically’ owns all the water – Johannesburg Metro has just awarded the private Northumbrian Water Group the management contract for water and sanitation. Never mind which ‘hoarded’ mineral rights of which individuals and public (that is, private) companies are to be ‘written off the books’ and who ‘nominally’ owns them thereafter – government plans to lease them out for exploitation by other private individuals and companies. Never mind about Toyota customers’ 16-seater mini-bus taxis being ‘phased out’ – government will ‘phase in’ other (fewer and bigger) private ‘purpose-built and safer’ taxis.
Is government at all committed to ‘economic liberalisation’? Many would not cry ‘nationalisation’ about water, minerals and taxis. Sceptics and foreign investors, however, understand the difference between real privatisation and deregulation and South Africa’s notion of Public-Private-Partnerships under government control.
Recently President Thabo Mbeki launched the ANC local government election manifesto restating a 1998 promise that ‘the public sector is the preferred option to provide services’. The manifesto concedes that ‘strictly regulated’ partnerships with other government institutions, community organisations and the private sector are still feasible. But as the Mail & Guardian’s Patrick Bond asks (October 13), are they desirable? Who would want to invest in a city water or electricity supply with a large proportion of customers who cannot afford to pay, yet are now promised by the Grootboom ruling and Ministers their legitimate constitutional right to consume?
Northumbrian Water Group, apparently – and let us wish them good fortune in meeting Johannesburg Metro city manager Khetso Gordhan’s aim next year to dramatically improve revenue collection and operations, give 6kl free water, fix the infrastructure and pay dividends to the council. Can ‘the invisible hand of profit-maximising competition’ work its magic for Johannesburg, and show the way for other metros and municipalities, while Mbeki himself is publicly dissenting about the ‘destructive and demoralising social effects of the market mechanism and the profit motive’.
Is it any wonder that municipal unions Samwu and Imatu are about to strike demanding a moratorium on all restructuring and a reversal of previous privatisation and outsourcing? Should we be surprised at how Telkom, Eskom and Transnet duck and dive as they desperately try to mollify threatened workforces, disgruntled customers and confused politicians? Can we blame local and foreign investors for holding back? Are the Heritage Foundation and the Wall Street journal wrong in reporting ‘resistance to privatisation from the powerful unions’ and ‘restrictive labour regulations’, and rating South Africa as ‘mostly unfree’?
Mbeki says ‘market fundamentalism has become so powerful that any political forces that dare to resist it are branded as sentimental, illogical and naive.’ Yet he dares to resist. He has clearly joined George Soros and Tony O’Reilly as a capitalism-dissenter. His government remains paralysed, unable to forge ahead onto the ‘high road’ of whole-hearted privatisation, deregulation, economic freedom and rapid growth. We can only wait for the powerful economic forces to change his mind.
(This article may be reprinted without prior consent but with acknowledgement.)
