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Quarterly
review
July – September 2009
Extract from Brian
Benfield’s Chairman’s Address to the Annual General Meeting, 27 August 2009
The Free Market Foundation
was founded to promote the principles of liberty and to disseminate as widely
as possible information on its nature and advantages. Its aim is to promote and
foster an open society, the rule of law, personal liberty, and economic and
press freedom. In short, the Foundation promotes the personal liberty and freedoms
of all South Africans.
These objectives are not dissimilar to those contained in
the South African Constitution, namely, to lay the foundations for a democratic
and open society in which government is based on the will of the people, and
every citizen is equally protected by law. Government is to advance human
rights and freedoms, and to ensure the supremacy of the Constitution and the
rule of law. In short, the government’s primary duty is to advance the personal
liberty and freedoms of all South Africans.
Liberty and freedom are synonymous in the sense in which I
use them; here they mean personal liberty – the liberty of each person to live
according to their own choices, provided they do not attempt to coerce others
and thus prevent them in turn from living according to their own choices. South
Africa’s Constitution generally supports freedom in the sense of individual and
personal liberty. Nonetheless, it also contains some “rights” that, if granted
to some citizens, impose obligations on others and which therefore are
inconsistent with the notion of individual rights and liberty.
Our Constitution is designed to limit government, not to
facilitate it. The “supremacy of the Constitution and the rule of law” are
therefore among the Founding Provisions of the Constitution. President Nelson
Mandela said: “The rule of law, as I (admittedly a long retired old lawyer)
understand it, refers to a structural exercise of rule as opposed to the
idiosyncratic will of kings and princes. Even where the latter may express
itself benevolently, the former is morally and politically superior. Where the
rule of law does not apply, rulers assume entitlement to rule; the rule of law,
on the other hand, places the emphasis upon structured responsibility and
obligation.”
Liberty encompasses both economic freedom and civil
liberties. The one cannot endure without the other. In promoting these
principles of liberty, I believe that the Foundation’s extensive endeavours
over the past year, as with the past three decades, have served the citizens of
South Africa well.
Beware
the NHI
This year has seen a propaganda blitz promoting a National
Health Insurance (NHI) scheme for South Africa. It would be better by far if
the state separated the funding and provision of health care so that all care
is eventually privately provided and care for the needy is publicly funded.
This would ensure competition, lower prices and quality health care for all.
Many countries around the world, particularly in Western
Europe, have increased government control over the health sector in the hope of
promoting equity and efficiency. However, the experience of many of these
countries is that greater government intervention entrenches the rationing of
medical technologies, and extends waiting lists and inequity. Many of these
government-dominated systems also have serious problems with cost inflation.
In order to inform South African policymakers and opinion
formers of the danger of undermining patient choice, the Health Policy Unit (a
division of the Free Market Foundation) and International Policy Network
(London) propose a media campaign beginning, as soon as the requisite funds can
be raised, with the visit of three policy experts. The aim of the campaign will
be to illustrate overseas examples of how good intentions by governments to
improve health care have often backfired and entrenched very serious structural
problems in healthcare systems. The campaign will also include an element of
positive advocacy of the merits of free market healthcare reforms, such as
blending health insurance with medical savings accounts. The initial visit will
be followed by a half-day conference in Johannesburg and will be followed up
with bi-monthly ‘fly-ins’ of relevant foreign policy experts, who will engage
in press liaison, meetings with officials and speaking events. Events will be
organised in Johannesburg, Pretoria and at Parliament in Cape Town.
In the interim we continue to influence public opinion and
policy via our dedicated website: www.healthpolicyunit.org.
Economic Freedom of the
World: 2009 Report
The annual Economic Freedom of the World report is
produced by the Fraser Institute, Canada’s leading economic think tank, in
co-operation with independent institutes in 75 nations and territories –
including the FMF. The Report was launched worldwide on September 15. It
measures the degree to which the policies and institutions of countries are
supportive of economic freedom. This year’s publication ranks 141 nations
representing 95% of the world’s population for 2007, the most recent year for
which data are available. South Africa ranked 57th for economic freedom.
Land
reform
The Land Reform Project, led by Leon Louw and Gail Daus, has
made great strides with new work on urban land tenure issues (Alexandra and “Perryville”),
the economic implications of the Communal Land Rights Act (CLaRA) (Eastern
Cape), and the Makuleke land restitution and natural resource management in the
northern part of the Kruger National Park. This work contributes to the
project’s focus on tenure upgrade, emphasising how tradable title can enhance
economic development in urban and rural areas.
The Law Review Project and Free Market Foundation have a
long-standing relationship with Alexandra and have used their unique
understanding to launch several case studies on land tenure in urban
communities there.
In light of the apartheid legacy of inferior land ownership
by between 50 to 80 percent of South Africans, we have undertaken to pioneer
the first ever large-scale upgrade of deeds in partnership with the
“Perryville” Municipality. This project will see close to 20,000 homeowners,
who lack freehold title (unambiguous legal ownership), receiving full freehold
title.
Temba Nolutshungu and Laura Grube interviewed traditional
leaders and government officials in the Eastern Cape to see how CLaRA, if
implemented, would affect rural communities. The legislation provides for the
transfer of title in communal land to the communities and for land rights to be
documented and registered in the deeds registry.
As part of Enterprise Africa!, a joint project between the
FMF and the Mercatus Center (USA), a study of the Makuleke land restitution
story will be published shortly. The Makuleke are an example of how private
property rights can create an incentive for communities to care for the natural
environment. The Makuleke community was awarded property rights within the
Kruger National Park and have used the land to develop ecotourism.
3rd annual
intellectual property rights indaba
IPR 2009 is to be held at the Indaba Hotel on Thursday and
Friday, 19 and 20 November 2009. This year we are anticipating attendance by at
least 150 delegates and more media coverage than we achieved last year. The
overall theme will be Innovation, Economic Growth and Job Creation – the
Role of Intellectual Property Rights.
The Annual IPR Indaba is intended to increase the awareness
of all South Africans of the importance of intellectual property rights in the
economy and their everyday lives. Topics to be covered will include the role of
IPR in economic growth, innovation, software (including the complementary role
of proprietary and open source software in a modern economy), IPR from publicly
funded research, pharmaceuticals, agriculture, the entertainment industry and
the importance of combating piracy in order to encourage innovation and the
development of new products in every field of endeavour.
Confirmed speakers include: Zivanai Chapanduka,
Medical, Regulatory & Corporate Affairs Director for Eli Lilly; Barry
Dwolatzky, Professor of Software Engineering at Wits University and
Director of the Joburg Centre for Software Engineering; Ali Faramawy,
Area Vice President, Microsoft Middle East & Africa and Vice President,
Microsoft International; Douglas Lippoldt, Acting Head of the
Development Division of the Trade and Agriculture Directorate at the OECD in
Paris; Leon Louw, Executive Director of the Free Market Foundation and
of the Law Review Project; Daniel Mashao, Chief Technology Officer of
the State Information Technology Agency; Minister Naledi Pandor,
Minister of Science and Technology; Mamphela Ramphele, Chairperson of
the Technology Innovation Agency; McLean Sibanda, Head of the
Intellectual Property Management Office at the Innovation Fund; Kitisri
Sukhapinda, an Attorney Advisor in the Office of Intellectual Property
Policy & Enforcement, United States Patent & Trademark Office; Jasson
Urbach, economist for Africa Fighting Malaria and the Free Market
Foundation and Director of the Foundation’s Health Policy Unit; Jocelyn
Webster, Executive Director of AfricaBio.
To register (there are no fees) and for more information:
www.iprconference.co.za.
In-house
events this quarter
July 22 – Are we heading for a water crisis? with
Anthony Still, ex-CEO of Johannesburg Water.
August 19 & September 16 – Cape Town / Joburg launches
of Fixing famine: How technology and incentives can help feed Africa
with Jasson Urbach, FMF economist and Director of the Health Policy Unit.
August 27 – launch of Paying
for Intervention! How Statutory Intervention Harms South African Health Care
with Jasson Urbach, FMF economist and Director of the Health Policy Unit.
Please diarise October 21 for Vivian Atud’s launch of ‘BAM’
our Black Advancement Monitor.
Please diarise November 11 for Dawie Roodt’s presentation on
taxation.
Invitations to follow in due course.
Variation on a theme…
In 2003 the FMF initiated fundraising/network luncheons to
which members and potential members are invited and at which Leon Louw gives a
presentation and answers questions. In his presentation, Leon explores
strategies of how South Africa could achieve sustained economic growth,
describes the Foundation’s priorities and role in influencing national policy,
and explains why governments, not free markets, are the cause of the current
global crisis. The luncheons are held either at the Foundation’s offices in
Sandton, or are hosted by our members (such as Wyeth, Merrill Lynch, Citi, JSE
Limited, FirstRand and Boehringer Ingelheim) – for which we thank them. To date
39 luncheons have been held.
In September we hosted a finger luncheon for 30 or so young
executives at which we introduced tomorrow’s leaders to the Foundation’s
economic philosophy. We plan to host these important functions bi-annually from
2010.
Speeches
this quarter
Leon Louw
IBM (two occasions) on Global outlooks and the challenge
of change.
The Generic Medicines Congress (two papers) on Free
market principles: Applicability to the healthcare sector & The
impact of the regulatory and legislative environment on access to healthcare.
Investec on Land reform and low-income housing.
Alexander Forbes on The global crisis explained.
(Feedback: “Truly brilliant, and highly knowledgeable in his subject! By far,
one of the best speakers we have invited to speak at our forum.”)
Gordon Institute of Business Science (GIBS) on Entrepreneurship
in low-income markets – job creation opportunities.
Boehringer Ingelheim on The global financial crisis: The
outlook for South Africa.
Terry Markman
Mail & Guardian Critical Thinking Forum on Market
forces or government policy – who is driving SA’s energy efficiency agenda?
Temba Nolutshungu
Union of Jewish Women on Black Economic Empowerment.
The Foundation’s message to
government
–
Maintain the rule of law
and uphold the letter and spirit of the Constitution.
–
Provide truly independent,
efficient and just law courts with adequate infrastructure.
–
Combat crime and ensure
sufficient and effective policing.
–
Adopt proven free market
economic policies to ensure high economic growth.
–
Withdraw from the business
of business and leave the production of goods and services to private
enterprise.
–
Reduce regulations and
taxes on business and consumers.
–
Reduce anti-employment
rigidities and compliance costs in the labour market.
–
Abolish counter-productive
exchange controls.
–
Discontinue existing price
controls and do not introduce new ones (because they distort markets by causing
needless shortages and surpluses).
–
Adopt personal and economic
freedom as the fundamental basis for living and doing business in South Africa.
