Nationalisation: it's in the bag For proponents, it's the only way out after 16 years of failure Sep 14, 2010 11:53 PM | By S'Thembiso Msomi ------------------------------ *S'Thembiso Msomi: *The nationalisation of the mines - and probably of other strategic sectors of the economy - is going to happen. It is only a matter of time. Nationalisation might not be adopted as ANC policy at the party's national general council meeting in Durban next week, but a process will surely be put in motion towards achieving this end by December 2012. And, once the ANC 2012 national conference ratifies it, expect state ownership of the mines to be government policy within two years. Calls for public control over the lucrative mining sector date back to 1955, when the ANC and its allies formulated their basic policy document, the Freedom Charter. Even as the party prepared itself for government in the early 1990s, the dominant view within its structures was that the "mineral wealth beneath our soil" would have to be owned by the democratic state. But a combination of factors - including the policy constraints imposed on the new government by the negotiated settlement, and a post-cold war economic climate that discouraged state intervention - led to the ruling party abandoning the policy. So what has changed? Plenty. It would be foolhardy for anyone to dismiss the current calls for nationalisation as the ill-informed rantings of an economically illiterate ANC Youth League president, Julius Malema, or of dyed-in-the wool Cosatu socialists. This is bigger than Malema. It has to do with the deepening sense of disappointment, resentment and even anger at the incredibly slow pace of economic transformation over the past 16 years. Whereas in the 1990s Cosatu and the SA Communist Party would have been lone voices singing the state ownership chorus, today their choir includes sections of our society that came to be known as the traditional allies of big capital - the so-called "BEE class": black professionals and other key constituencies of the ruling party. Aspirant black capitalists who in the past defended the status quo in the belief that reformist measures, such as the introduction of the Mining Charter, in 2002, would lead to some of the lucrative assets being transferred to their hands are bitterly disappointed. As Mineral Resources Minister Susan Shabangu pointed out on Monday, mining companies had failed to reach the 15% BEE ownership target by last year and, if the current trend continues, will miss the 2014 target of 26%. Moreover, many of those BEE companies who did acquire mining assets are in serious debt. Having for the most part bought marginal mines, such as Aurora's Grootvlei, empowerment groups were the most affected by the global economic crisis and the subsequent collapse of commodity prices. It might well be that some of the BEE supporters of nationalisation do so in the hope that such a measure, which in terms of the Constitution would have to be done through the state buying the assets, would rescue them from the possibility of financial ruin. The communists, for instance - whose leaders hold top positions in the government - allege in a discussion document that some BEE mining groups began to "lobby for the government to nationalise the platinum sector" long before Malema went on his crusade. With the sector valued at about $250-billion, the government would clearly have to be selective about which mining companies to nationalise - troubled empowerment groups would be praying that they were on the list. Whatever motive Malema might have had in mind when he put the nationalisation debate on the country's agenda, the fact is that nationalisation has found resonance with ANC structures in desperate search of radical new measures that would set South Africa on a different economic growth path. According to yesterday's Business Day, at least three ANC-ruled provinces - Eastern Cape, KwaZulu-Natal and Gauteng - are enthusiastic about the nationalisation proposal. For them, state ownership of a sector that boasts 90% of the world's platinum-group metals, and that has mineral reserves that can last for another 165 years, would radically boost the government's coffers and help fund service delivery. The ANC Youth League, for instance, has suggested that some of the profits from mining would fund their demand for free education to university level for all South African students. In the labour movement, there is a belief that state ownership would lead to increased beneficiation and, therefore, the creation of more jobs. And so, while all the major groupings that make up the ANC are likely to disagree on just about everything next week - expect them to agree in principle about the need for nationalisation. They will disagree only on the modalities to be followed. http://www.timeslive.co.za/opinion/columnists/article659406.ece/Nationalisation--its-in-the-bag
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