Business, Politics

What exactly is in the ANC Youth League’s nationalisation plan?

By Branko Brkic 8 February 2010

Last week brought us the ANC Youth League's plan for nationalising the mines, nicely timed to distress delegates at the Cape Town Mining Indaba. Surprise, surprise, the League wants wholesale change. But arguing for that, they look back much more than they look forward.

At 26-pages long, it’s obvious some thought went into it. Usually, when confronted with an ANCYL document, the first order of business for any experienced political journalist is to put it into MS Word, and count the number of words underlined in red. Then you count the parts that are underlined in green. And that gives you the top line in any decent Hogarth Column, and a chance to have a dig at their characteristically bad spelling and language skills. This one is different. We need to take the league, and its document, a little more seriously this time.

You have to go through most of the document before you get to what the League actually wants the state to do. In this case, it wants government to: “(a) establish a State Mining Company; (b) put in place a democratic, open and clearly defined expropriation (with and without compensation) model, and (c) amend the Minerals and Petroleum Resources Development Act to allow greater State participation in the exploration, extraction, production, processing, trading and beneficiation”. A bit further on it explains that this means, “depending on the balance of probabilities, the State can expropriate not less than 50% of the existing Mines”.

There we have it. The League wants the state to have a controlling interest in mines that work. It’s actually pretty clear that it wants nothing to do with “barren” mines, and mines shouldn’t just be nationalised “because they are mines”.

That’s the definition of nationalisation, what about the why? There’s a three-page potted history of the Freedom Charter at one point, then another two or so pages on people who have written well about it. Those quoted include Madiba (of course), Tambo and just about anyone else who’s led the ANC and thought highly of the charter. So pretty much everyone. It’s interesting that it’s the youth who are so stuck in the past on this one. You would have thought that there would be a lot more time and energy spent on working out why nationalisation would be a good thing now, as opposed to quoting a document stemming from the 1950s.

It is at the halfway mark that you get to why this argument is still relevant. Here, finally crisply put, are the league’s main motivations: “(a) Nationalisation to increase the State’s fiscal capacity and better the working conditions, (b) Nationalisation as a basis for industrialisation, (c) Nationalisation as a means to safeguard sovereignty, (d) Nationalisation as a basis to transform accumulation path in the South African economy, and (e) Nationalisation to transform South Africa’s unequal spatial development patterns.”

It’s obvious that bettering the state’s fiscal capacity is basically saying that what comes out of the ground should go to SARS. That’s all well and good, but a fairly large proportion of what comes out of the ground goes to government already anyway. So that’s really an argument about quantum, about how much of what comes out of the ground should go to government. Intelligent people can disagree on this, but we think a badly run mine, without any profit motive to drive its development, will end up with nothing going to government.

Bettering work conditions is going to play well with the League’s core constituency. Cosatu will love it. So, you’d think, would the National Union of Mineworkers. But their support for this has been lukewarm at best. In fact, it sounds distinctly chilly. (Bear in mind, Gwede Mantashe, the League’s sworn enemy is a former head of the NUM). And we know that some of the worst and most bitter strikes in recent years have come from within the government sector. Working conditions could be better regulated without using the mallet of nationalisation anyway.

The league has a nice argument about how those who worship filthy mammon every night dig out our resources, particularly coal, and send them overseas. They quote data showing how so many diamonds come from here, where there is virtually no diamond-polishing industry. Then they show how there are a million people employed cutting diamonds in India. This is probably the strongest part of their argument. It deserves serious consideration. But again, this could be solved through means other than nationalisation. And even if the mines were owned by government, the temptation to sell resources to the highest bidder would still be huge. Changing the ownership of a mine doesn’t necessarily mean kick-starting another massive industry.

There’s also a lot of dross about how nationalisation would stop the creation of a small BEE elite, and how it could be used to decentralise the economy. Quite frankly, while they’re probably right that it’s unhealthy to have five provinces all relying on Gauteng, changing that is a pipe-dream. And having massive economic centres usually works. Think of the US without New York, the UK without London, or even China without the Guangdong province. And then think of how the Eastern Cape could have been different with one large city, instead of two smallish ones.

The league is politically aware enough to know there will be plenty of opponents to this document. It says that people will bring up “the lame example of Zambia”. And it bandies the word “imperialist” around a lot at this point. But that’s to be expected.

What is clear is that, while some work has gone into this document, quite frankly it was produced in too short a time to really be evidence of a long, hard think, followed by a period of good, hard discussion. More and more there is a feeling that the league has other reasons for pushing this policy so hard. Some are already saying in public that perhaps this is really about the fight to control resources. Sadly, this document does little to dispel that suspicion. We’d love it if the league were to prove us wrong.

By Stephen Grootes

(Grootes is an Eyewitness News reporter)

Photo: Reuters