The amendments of the Labour Relations Framework have been regarded as the greatest threat to business in the past years (2011/2012); considering that they would substantially alter every aspect of the employment relationship.
Business now faces an even greater threat that could materially impact its very existence within South African borders.
The nationalisation debate has reached a level at which it can no longer be ignored.
Following the 24th National Congress of the ANC Youth League (ANCYL), the SA Chamber of Commerce and Industry (SACCI) can no longer continue to be cautious about fuelling the debate through its public involvement.
The furthering of the nationalisation debate is also a leadership test for the leading political party in South Africa.
Business has to date accepted President Jacob Zuma’s assurance that nationalisation is not on the national agenda.
The open challenge to the view of Zuma from within his own party adds to the conflicting messages that both domestic as well as international investors are experiencing.
In SACCI’s engagements with the diplomatic corps as well as with foreign investors, policy uncertainty broadly and the issue of nationalisation specifically has proved to be the leading deterrent to greater investment in South Africa in recent years.
The extension of the debate, by the Youth League, to include expropriation without compensation now stands in stark contrast to the spirit and letter of the South African Constitution.
Indeed, nationalisation as a solution to the country’s societal inequalities and the challenges of poverty and unemployment is flawed on a number of political and economic fronts and attacks the fundamentals of a free society including property rights, an independent central bank and a market economy.
Even if government were to pay compensation for the expropriation of mines, it has been estimated that such cost would be in the region of R2 trillion.
How such funding is to be raised is a dilemma that has not concerned Malema.
A further challenge which has been given scant attention is how a change in ownership of the mines will create a virtuous cycle of greater employment as well as greater revenue generation simultaneously if the country is to contribute to the desired social upliftment
This, given that governments, domestically and abroad, have a poor track record in running enterprises successfully. It is unequivocal that the private sector is the only true generator of wealth. In recent times, this country has experienced a number of events that have triggered an exodus of South Africans to foreign shores.
The 1994 elections and the power crisis of 2008 are two cases in point. While the patriotism and possibly irrational fears of these emigrants can be debated, the impact of such exodus on the available skills in South Africa is undeniable.
A move towards any form of programme of nationalisation will not only trigger a mass exodus of investment and an immediate deflection of any contemplated funds movement in South Africa’s favour but would also trigger a third exodus of skills.
Indeed, from an economic perspective, a policy of nationalisation would be akin to an extinction event.
Written by: Neren Rau – CEO of SACCI (South African Chamber of Commerce & Industry)