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Cosatu has released its long awaited document in which it provides the facts (as it sees them) and theoretical underpinnings for “A Growth Path Towards Full Employment” – and in doing so attempts to align its views with those emanating from Minister Ebrahim Patel’s Department of Economic Planning (the Two Year Strategic Plan) as well as Minister Rob Davies of DTI’s (IPAP2).
Stephen Grootes at the Daily Maverick has done an exemplary quick analysis (catch that here). I am not quite certain I am as gung-ho capitalist as the guys down at the the DM are … although I am as clear as Grootes is that Cosatu’s main planks of policy would turn us into a wasteland in two flicks of a lamb’s tail – as not even my old Granny was prissy enough to say.
I saved a copy of Cosatu’s full document here and hope to give it a more thorough treatment than the cursory skim I gave it in the middle of last night. Whatever I conclude will be faithfully reported on these pages.
Chasing my tail trying to get the bills paid.
But two important things not to lose sight of:
Firstly, Julius is back.
The weekend National General Council of the ANC Youth League was a personal triumph for him and he emerges from Gallagher Estate with his star, once again, steadily on the rise.
In the bitterly divided Ruling Alliance Julius Malema can come clean and stand tall – as a Breitling wearing anti-communists, anti-Cosatuite, who is unashamed of using his political connections to make as much money as possible.
He has invested his transformation credentials with the Youth League’s call for the nationalisation of mines (to which has been added the removal of the willing-seller/willing-buying principle with regards to land distribution) as well as with his overtly populist appeals to a form of ethnic solidarity to “African children” and “those who look like us”.
It my opinion he is now this puts him in the leading cadre of the “nationalist” faction of the ANC that is in the process of confirming itself as the dominant faction – a process that will be reflected in the tone and tenor of the ANC’s NGC later this month.
More than ever I am of the view that Julius is the coming man (as I argue in the piece that continues to get the biggest traffic on my website here) and he has now overcome the setback associated with the dramatic revealing of his business interests as well as the disciplinary action taken against him by the ANC – both earlier this year. He’s got 30 years to emerge as a central ANC leadership person – I can’t think of anyone better placed.
SACP wants to spend your money
Secondly, for those interested in underlying political risk for financial markets, you have got to read the SACP’s latest Umsebenzi Online (Volume 9, number 17) – The long and the short of it is they hope to continue “directing both our public and private financial sector resources towards investing their funds towards this new growth path.”
It is important to understand what the SACP thinks it is doing. The organisation wants to get the “banks, insurance companies, investment and asset managers” to use the money they are tasked with investing to finance a number of goals that government (and presumably therefore, the Ruling Alliance) specify.
Where does the money they are talking about come from? It is the savings and nest-eggs of every South African that the SACP is proposing be put at its and the ANC’s disposal. I am all for encouraging socially conscious investment, but this idea is classically Stalinist as well as being stupid – the money would find a safe place to hide if the ANC and the SACP tried to get their hands on it; except for the money belonging to the weak and vulnerable, who are always the true victims of policies like these.
The article is called “Funding the National Democratic Revolution” so they make no bones about what they want to do with the savings of teachers, workers and old people and … well everybody who has saved and invested money in South Africa.
The Umsebenzi is more specific about forcing a change in the investment criteria of the Public Investment Commission so that it “promote(s) the five priority areas of government’s development programme.” Again, be clear what is being proposed here. The PIC essentially invests the R740 billion worth of pensions of public sector employees. This is whose money the SACP wants to spend – after the probity of government and public sector spending we have seen over the last few years, who would countenance this?
Whoever wrote this document clearly believes this money belongs to government – when, in fact, it represents most of the life savings of government employees. The interests of the owners of that money is that they get the maximum return, while the supremely grandiose SACP decides that the “real” interests of those people is that their money gets deployed in “government programmes”.
The suggestion is so puerile and undemocratic that I am tempted into hyperbole – and all the more dispiriting because the SACP is all that is standing against the rise of the Zuma/Gupta/Malema imperative. You can catch the full article here.
Much is happening on the political front that I would love to be discussing here, but paid work is, thankfully, taking up my time this week. Thus the following is broad brush and a little rushed – the point I wanted to make is that the issues are all connected – in dark and unsettling ways.
Julius on Nationalisation
Parliament started public hearings on the establishment of a state-owned mining company. Malema gave the ANCYL’s views and he repeated the call for the immediate suspension of mining licences to prevent the current holders “looting” the mines. Jacob Zuma later in the General Assembly said: “If this issue causes such excitement, then debate it with Mr Malema. He is there.” See Business Report’s take here.
The Democratic Alliance made serious gains in by-elections earlier in the week – this from The Cape Times (IOL) this morning:
IN a watershed night in South African politics, the DA trounced the ANC in two of its strongholds – Gugulethu and Caledon – gaining two wards where there was not a single white voter and the majority were blacks, not coloureds.
In Ward 44 in parts of Gugulethu and Heideveld, where the DA received 21.6 percent of the vote in the last election in 2006, the party received 60.5 last night.
And in Ward 12 in Caledon’s Theewaterskloof municipality, where the DA received only 6.6 percent in 2006, the party garnered more than 60 percent.
We are obliged to do some work on these numbers (how many people voted, demographic and other changes since 2006) but it implies a surprising level of disaffection with the ANC in areas that can only be described as ‘previously safe’ ANC wards.
I have been picking up from African foreigners living in townships around Cape Town for at least the last 6 months that they were being threatened that post the Fifa World Cup and post the obsessive media focus on South Africa associated with the soccer they can expect to be driven from their homes – I discuss it here and this is the key paragraph from this March 24th 2010 post:
It has become something of a legend and commonly accepted “fact” by foreigners living in South African townships that post the World Cup and in the lead-up to the local government elections in 2011 the xenophobic violence will erupt on a scale beyond anything that has happened in the past.
The issue is breaking across the spectrum of the South African news media as I write.
The Hidden Connections
The ANC government is failing in service delivery and the evidence is everywhere that there is a degree of panic in the party’s ranks about the 2011 local government election. The ANC is under various kinds of threat, but the threat that concerns its leadership most is the possibility that they lose the support of the poor. This environment gives voice to the worst of those who have found a home in the ANC; those who understand the power of the call to take back what is “rightfully ours” – the land and the mines; and those who covertly would harness the rage and fear rife in the townships – a strategy indistinguishable from the early activity of the National Socialist German Workers’ Party. The older ANC members would be genuinely outraged at any suggestion that they would countenance these strategies but it is difficult not to conclude that these forces are unleashed in our society as a direct result of the failure of ANC leadership.
Aside from the most satisfying stitching up of the ANC Youth League president there were two other excellent bits floating up through the dross of the weekend news; both from the excellent www.timeslive.co.za.
Firstly, Ray Hartley (editor of The Times and the Times Live website and author of the exceptional blog The Wild Frontier) interviewed Jeremy Cronin about, amongst other things, the dangers of populism. Cronin talks with clarity of the clear and present danger of a form of fascism that is taking root – and being encouraged to take root – in the mass of 18 – 25 year olds who are unemployed and not in any form of tertiary education in South African. Listen to him speak of “big man” authoritarian politicians dealing in patronage and claiming a shared victim-hood with under-serviced poor; and listen to him warn of the similarities of our present to both 1930’s Germany and present-day Zimbabwe. There is no question in my mind that the red finger of his accusation is pointing at the likes of Julius Malema and his crew. I highly recommend the interview; catch it here.
The second piece is from Ray’s colleague Mondli Makhanya, editor of the Sunday Times. He warns that the current ANC leadership is airbrushing both Thabo Mbeki and FW de Klerk out of history in much the same way as Stalin erased the image of Trotsky. It is an interesting point and, now that he mentions it, clearly true. Catch it here.
This is not a budget review. There are just too many of them out there and I am in the middle of a roadshow to the South African fund management industry where the budget is being VERY well received.
This is more a comment on the whole budget season that yesterday’s excellent National Budget began.
The good thing about Zuma’s presidency has always been the fact that he has let every contending faction into the ruling tent.
But, I hear you cry, they are milling about in there in confusion, stepping on each other’s toes and bellowing and mooing in a kind of bovine riot as they fight to get as close as possible to the trough.
Well yes, but aside from that. You see, the Alliance of the disaffected (thank you Stephen Friedman) always consisted of an unhealthy number of BEE wannabes who wanted their turn to tear at the dwindling cherry. But they were never alone. The communists, the trade unionists, the ANC democrats who thought Mbeki had sold the revolution down the river and then a whole host of people whose contribution had been thwarted by the logic of the Mbeki imperial presidency (avoid real participation by the structures of the party, the alliance or even parliament in decisions, because they will go against you) they were all in there together. The fight between the “communists” and “nationalists” is very much a fight within the Zuma camp.
Thus, we come to the first season of the Zuma presidency in which their plans and budgets are revealed. It is important to remember that this is the first real political season of the Pirates of Polokwane (thanks Zapiro).
Well, so far we are seeing the first rays of light we have encountered in many dark months. The thugs and gangsters and vampiric crony capitalists and the racially chauvinist cabal at the centre of the security establishment (all of whom make up an important element of Zuma’s support base) have had all the running and all the press and have done all the bellowing, mooing and grunting at the trough.
Now it is the turn of the technocrats. This is the crew of lefties and trade unionists and dour financiers and tax collectors who were included in the Zuma cabinet, and gave many of us some hope to cling to in the darkening months of the whole second half of last year.
Yesterday Pravin Gordhan revealed a thoughtful budget that took all of the continuity that Manuel always showed, but added a real democratic inclusiveness that the previous minister was never able to demonstrate – given his crucial position in Mbeki’s non-inclusive regime.
Today we will hear Rob Davies and the DTI talking “industrial policy”. This is policy that sets up a combination of incentives and disincentives to shape the kind of growth we will achieve: how inclusive or job rich it will be.
During the next two weeks we will hear parliament debating the budgets of each and every department of government and finally all will be revealed.
I think it is worth treating this process with an open mind.
I will, as far as possible, provide some insight into the process as we go along.
Here is a radio interview that was not conducted with me this morning:
Why would the ANCYL want the state to grab 60 percent of an ailing mining industry?
Because Julius wants everyone to be able to afford a R250 000.00 Breitling like the one on his wrist …
oops sorry, wrong piece of paper … here’s the right one:
Because some corporate finance wide boy has worked out a way to salvage a slew of BEE deals that are under water; deals that were premised on the continuation of the commodities super-cycle into the far and distant future.
How will nationalisation help?
The ANCYL are proposing suspending the issuing of licences; they want the state to set up a mining company and they want the state to nationalise 60% of each existing and all new mining operations …
Yes, but how would that help BEE mining deals?
You think this government would not pay compensation, proper market related compensation, if it came to take 60 percent of mines belonging to Tokyo, Patrice, Cyril, and Mzi … and Saki and a few others? They will pay, trust me on this.
So you think it is just a scam?
… no, not only a scam. Nationalisation is a traditional badge of radicalism. In an environment where the majority of South Africans have not benefited much from liberation it is politic for an organisation like the Youth League to assume the posture of heroically trying to take the wealth back from the greedy mine owners and give it to the people.
But isn’t it a fact that the mining houses make huge amounts of money and pay workers poorly and feed nothing back into the communities they work in?
Hmm, yes that is mostly true, but the big multinationals have learned to be on their best behaviour: environmentally friendly, money to local communities, good safety records …. the way to get the most out of being endowed with minerals is make those requirements as stringent as the productivity margins on any one operation allow. So charge royalties and tax them and require a whole range of social goals be fulfilled ….
But isn’t that what the 2002 Mineral and Petroleum Resources Development Act does?
Exactly. That act set up the Mining Charter and was based on a brutal and honest exchange between government and all the big investors in our mining sector … remember the leaked draft of the Mining Charter, the huge sell-off, the (then) Minister of the (then) Department of Minerals and Energy rushing around the world’s financial centres explaining government’s intentions with regard to the proposed Act and the BEE process … then the long struggle to set the level of royalties …. this is a process that we have been through …
But surely government can change its mind, and say: no we want more from the sector?
Of course it can – and investors have always treated that as a risk; they would have preferred a clause somewhere promising set levels of BEE ownership and unchangeable targets for the various aspects of the codes. Investors hate governments shifting the goal-posts. But this proposal is a lot more than shifting the goalposts. Nationalisation along the lines the Youth League is proposing is …. ‘a whole new ball game’, so to speak.
But surely we need to get the most out of our mineral resources – for the benefit of the poorest South Africans?
Why do you think state ownership of mines is likely to make them more productive … better generators of state funds, fairer to the workers … better for the environment …. more likely to feed back resources into local communities? All governments’ records as owner/managers of companies is appalling. And let me say that THIS government’s record as a manager of the assets and resources it inherited stands out for reasons that probably no-one wants to brag about. The way to get the most out of the mines is to leave them to the professionals and tax them and oblige them to deliver certain social goods to just this side of the profitability margin.
Well, we have to leave it there … thanks Nic, and thank you all for listening …
Tomorrow morning at the crack of dawn I will begin travelling with my children for a respite after two years of my (it seems somehow personal) Great Recession.
We will be moving through some places that are less connected than others, so I will be posting irregularly for some time.
For this reason I wanted to say something about the South African Communist Party’s special conference in Polokwane before I go and before it finishes on Sunday.
Our red brethren have been meeting since Thursday and it seems they have been having an interesting and boisterous time.
Much of the media coverage has centred around a visit by Julius Malema, Billy Masetlha and Tony Yengeni during which the ANC Youth League president was booed and reportedly walked out in a huff, threatening to ‘tell on’ to the president.
But the underlying conflict that is playing itself out between the SACP and a powerful faction of the ANC is the main show in town.
And the SACP leadership is ‘on message’, constantly attacking what it sees as emerging black capitalists whose primary method of accumulation is tender abuse and looting of the state. It appears that the communists believe this “project” is THE real and immediate danger.
The coordinated attack emerges from even a cursory reading of (most importantly) the political report to the conference, but also from the opening address (some of these links are a little dicky – it seems to be a problem with the SACP’s site) by SACP chairman, Gwede Mantashe, a speech by Cosatu’s Zwelenzima Vavi and an address by the Young Communist’s Buti Manamela.
The political report says it most clearly (it’s a longish quote, but it gives one an excellent idea of the main issues in our politics):
This new tendency has its roots in what we might call “Kebble-ism” – in which some of the more roguish elements of capital, lumpen-white capitalists, handed out largesse and favours and generally sought to corrupt elements within our movement in order to secure their own personal accumulation agendas. Some of this largesse helped elements within our movement to emerge as capitalists in their own right.
In particular, these elements of BEE capital have been exploring a class axis between themselves and the great mass of marginalized, alienated, often unemployed black youth. The material glue of this axis is the politics of patronage, of messiahs, and its tentative ideological form is a demagogic African chauvinism. Because of its rhetorical militancy the media often portrays it as “radical” and “left-wing” – but it is fundamentally right-wing, even proto-fascist. While it is easy to dismiss the buffoonery of some of the leading lieutenants, we should not underestimate the resources made available to them, and the huge challenge we all have when it comes to millions of increasingly alienated, often unemployed youth who are potentially available for all kinds of demagogic mobilization.
We do not use the term proto-fascist lightly, nor for the moment should we exaggerate it. However, there are worrying tell-tale characteristics that need to be nipped in the bud. They include the demagogic appeal to ordinary people’s baser instincts (male chauvinism, paramilitary solutions to social problems, and racialised identity politics).
Now I disagree with a host of the economic solutions that the communists seem to take as gospel and I am convinced that left to their own devices they would kill creativity and diminish personal liberty without commensurate social gains. However, it is the communists who appear to be most clearly identifying where we are going and what the dangers that confront us are.
They might be full of economic nonsense (i.e. stuff with which one disagrees) but you can always trust the reds to spot the fascists before even the fascists themselves know what they have become!
It’s getting a little like a tennis match. Eventually you can do well to watch the audience, heads swinging from-side-to-side to the sharp “pok” of the shots, to get a sense of how things are going.
As I was reading the article by Cronin, again from Umsebenzi Online, that came out today I groaned. It seemed the deputy secretary general of the SACP who also wears the hat of the deputy minister of Transport was going to kowtow to Malema’s racial bullying and appeals to authority, which in turn was a response to Cronin’s take on the ANC Youth League’s call for the nationalisation of mines that I cover here.
It was difficult to hold out through the comrade’s niceties, etiquette and jargon – it’s exhausting at the best of times.
But lo! Just in time. If you can plough through the forelock tugging and coded jousting* to the end of paragraph seventeen:
If you disconnect a class analysis from a race analysis you run the danger of wittingly or unwittingly serving the interests of monopoly capital in SA and its comprador and parasitic allies – many of whom have been close to, or actually within our movement.
Well, no guessing which interests Cronin is suggesting Malema is serving – wittingly or unwittingly.
The long and the short of Cronin’s newest contribution is he still thinks that nationalisation of the mines (as he argued in his original critique) is a bad idea; but that more onerous and creative “beneficiation” obligations should be linked to the licences.
His argument is – as always – useful and rational.
My problem remains that the poles of the debate are being defined by the ANC Youth League president and the deputy secretary general of the South African Communist Party.
Hello? – as a 13 year old girl I know might say. Our mining sector has been shrinking for ten years while the equivalent sector internationally has been growing about 5% a year (in response to the so called Commodity Super-Cycle).
The communists and the crony-capitalist aspirants can only extract so much value (for their different, perhaps opposite, purposes) from the sector before investment flows to where the return is better.
Didn’t anyone ever tell them the parable of the goose and the golden egg?
There was this couple. They had a goose. It laid a single golden egg every day. After some years they became disatisfied and wanted more gold. So they cut the goose open to get at the motherload. But it was just a goose on the inside. So they starved to death … and then burned in purgatory forever. (Actually I added that last bit – it was more a hope on my part.)
* I don’t know what I am doing sneering at Cronin’s writing style! Just read a collection of his poetry (like: Inside) and you will realise that Cronin is unique amongst the comrades in that he has a laconic and comely turn of phrase. My irritation was actually about the fact that I thought – incorrectly – that he had bowed to Malema’s populist and racist assault.