South Africa

ANALYSIS

The double-edged sword of privatisation is poised to cut deep into the heart of a failing SA state

The double-edged sword of privatisation is poised to cut deep into the heart of a failing SA state
Former president Thabo Mbeki. (Photo: Gallo Images / Luba Lesolle)

A comment by former president Thabo Mbeki has underscored how the private sector can be a salve for many problems South Africa faces while, at the same time, leading to many people simply not receiving services at all. However, the move towards privatisation seems unstoppable.

It can be forgotten how much economic activity was controlled by the apartheid state. Whether it was the manufacture of iron through Iscor, the complete control of telecommunications through Telkom, or the fact that almost all television and radio stations were under the thumb of the SABC (with M-Net and 702 being important exceptions), much more was run by the government than is the case now.

As apartheid was coming to an end, it appeared the ANC would only increase the government’s role in the economy. In January 1990, the month before he was released, Nelson Mandela issued a statement in which he said, “The nationalisation of the mines, banks and monopoly industries is the policy of the ANC, and a change or modification of our views in this regard is inconceivable.”

Except, the opposite happened. Over the next few years, the role of the state weakened as the relative power of the private sector grew.

Some of this was because of technological changes. The introduction of cellphones made a state monopoly over landlines meaningless. Satellite television services made an almost complete monopoly by the SABC impossible.

In 2000, the then President, Thabo Mbeki, confirmed in Parliament that the programme of privatisation would continue.

This was despite intense opposition from unions.

But the situation has changed dramatically in the past four years, as the fragility of the state has become apparent. One of the revelations of last year’s ANC conference was how the weakness of the state had been revealed for all to see.

Now, Mbeki, speaking as an elder statesman, has made an important comment on the matter.

Speaking at a public administration event, and as reported by the SABC,  Mbeki first quoted, with apparent approval, the CEO of the Institute for Race Relations, Dr John Endres saying “Here we have this receding power of the state, its loss of authority and credibility, its inability to translate plans into action, and the growing disconnect between the ruling elite and those they govern, and this is where South Africa’s greatest opportunity for the future is to be found, in its innovative and resilient private sector and civil society, which are solving problems in the growing absence of the state and doing so successfully. In years to come, South Africa will become a case study of how private initiative succeeds where states fail.”

It’s a comment that many in the middle classes may agree with as they find that the private sector can provide them with electricity (through solar installations), healthcare, education and security.

This is one of the reasons the rates boycott by the Westville Ratepayers’ Association is so important: it shows how citizens can use technology and money to leave the state’s systems.

Even in what could be called the “commanding heights of the economy”, the trend of the past four years has been towards privatisation.

Just consider Transnet. 

The state-owned company has issued a tender for a private company to run the railway line from Johannesburg to Durban. It has already signed an agreement for an international company to run Pier 2 at Durban Harbour, the busiest section of the busiest port in the country.

But, as Mbeki also points out, there are major problems with this trend.

‘A direct threat’

“In political science, this is characterised as a counter-revolution, and a counter-revolution is not innocent, but in our case, a direct threat to our democratic state and the welfare and wellbeing of millions of our people,” he said in his statement on Monday.

What Mbeki is pointing to is how, when services are privatised, those who cannot pay for them are left with nothing.

This has been the lesson of the past few years: When the state gets weaker, the majority become hungrier, less educated and more desperate.

As former SA Post Office CEO Mark Barnes has said: “If the [SA] Post Office closes, that very small percentage of our population that can afford to, will still use PostNet. But most people will no longer have a [local] post office.” 

The key sector where privatisation is happening is electricity. 

The decision by President Cyril Ramaphosa (and agreed to by Energy Minister Gwede Mantashe) to allow uncapped embedded generation (allowing private companies to generate as much power as they want and then to sell their excess to other entities) was a de facto privatisation.

As Professor Mark Swilling has explained, South Africans have spent R85-billion on solar installations since April last year, meaning that many in the middle class left a major network that bound together South Africans. The result of this could be golf islands of light in a sea of poverty.

Despite Mbeki’s warning, it appears that the process of privatisation has too much momentum to stop now.  

In the past, unions opposed privatisation.

This was for ideological reasons (unions generally lean to the left) and for practical reasons, in that workers in government are usually better paid than in the private sector.

But now, so fragile is the state, and so desperate the situation, this is changing.

The Highveld region of the National Union of Mineworkers (NUM), which represents workers in coal mines, has said that it supports privatisation at Transnet, as the union has 35,000 members who could lose their jobs because the ailing state-owned enterprise is unable to move coal to the coast.

Considering the importance of the NUM to Cosatu, this has the potential to lead to a debate within the trade union federation. Cosatu could be divided on the issue (Satawu represents workers at Transnet, and some of them may prefer to stay in the government sector), or it could just remain silent.

This means that the process of privatisation may have very few who oppose it, and will continue.

And it means that both parts of Mbeki’s prediction are likely to come true: that the private sector will solve many of our problems — at a very high human cost. DM

Gallery

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  • Andre Swart says:

    Excellent article!

    In case somebody still doubts whether privatisation is the right way to go for SA let me remind you.

    Where the FREE MARKET dictates, everybody is better off because wealth is created and it ‘trickles down’ to the poor.

    That’s why the wealthiest peoples on the planet are those who value entrepreneurs and who enable ‘gifted’ individuals to innovate and help them to turn new ideas into profitable businesses.

    Elon Musk is one such individual who was compelled to leave communist oriented SA for capitalist America to start massive industries.

    The free market alleviates poverty as in the USA whereas poverty increases under the centralist rule of power obsessed communists such as in Cuba.

    What SA now realises is that BIG MONEY can fix many more problems than big ideologues can.

    How much better off would SA have been if the ANC took the FREE MARKET path in 1994?

    As we experienced in SA …. 30 years of revolutionary talks don’t fill empty stomachs … or in Margaret Thatcher’s famous words ” … the problem with communists is … they always run out of (other people’s) money … ”

    What must be added is that too much welfare and government help (AA and BEE) weakens the nation.

    After all ‘neccesity is the mother of invention’!

    • Sydney Kaye says:

      I agree that the private business will always run enterprises better than the state and that ideology is anathema to it, but I wouldn’t get carried away with FREE MARKET, which implies an unregulated free for all. Wealth most definately does not trickle down and the US is a perfect example of that, which is why regulated private partnerships are the way to go (especially in a country with embedded poverty) which was the way the Asian economies kicked off. Unfortunately any system requires competent governance, which is problematic with the ANC in charge.

      • Alan Salmon says:

        You are absolutely right Sydney – wealth does not trickle down, as seen in both the UK and US. The rich just get richer and everyone at the bottom stays the same. No easy answer but sensible government regulation and fair taxation is essential.

        • Dee Bee says:

          You both beat me to it! Reaganomics, or trickle down theory has largely been discredited for the reasons you both mention.

        • Ben Harper says:

          Really, you absolutely sure about that? What is the unemployment figures there?

          • Lisbeth Scalabrini says:

            USA 4,3% – Switzerland 2% – UK 4,3% – Euro Area 6,4% – South Africa 32,6%

          • Dee Bee says:

            Employment and Poverty are different measures. Many ’employed’ people in the USA still live below their poverty line. Estimates are that 11% of the population lives in poverty. Possibly more.

          • Gerrie Pretorius says:

            I’d much rather have a job and be poor than not have a job and be totally poor.

        • Glyn Morgan says:

          Are you saying that the rich (Musk,Openheimer ++) do not employ thousands of workers? If they did not, those rocket scientists would definitely be a bit poorer. Musk’s cash does “trickle down”.

      • Nick Miller says:

        Should read competent and honest.

      • Glyn Morgan says:

        How many thousands of South American poor swarm to the USA? They know that that is where the opportunities are. Poverty is not a fixed measure, in the USA there is LESS poverty that Cuba. Much less!

      • Glyn Morgan says:

        Where do you get this “FREE MARKET, which implies an unregulated free for all” from? I have not seen that anywhere. FREE MARKET is LESS regulation, LESS ideological management of the markets by self-centered unions.

    • Ritchie Morris says:

      If wealth trickled down we would not have a world with such marked inequalities.

      • Ben Harper says:

        That’s the socialist perspective. Without free market and private business everyone gets poorer. Where else is economic growth going to come from? How’s Cuba and Venezuela doing with that approach?

        • Dee Bee says:

          Straw man: Ritchie is not saying that socialism is the answer, just that an unfettered free market isn’t the answer either – conservative estimates put the US poverty rate at 11.6% (that’s 38 million people), but many believe that it’s underestimated, as it looks at pre-tax income, not take home pay. The UK, in thrall to Reaganomics since Thatcher’s days and now rampant, has somewhere between 8 million and 11 million people living in poverty, and increasing each year. And no, those aren’t all illegal migrants!

          • Middle aged Mike says:

            US ‘poverty’ is not like socialist country poverty. People flee socialist paradises like Venezuela to enjoy the benefits of being poverty stricken in the US.

          • Dee Bee says:

            In response to Mike’s response to me: I’m not in any way suggesting that ‘socialist’ countries are better – it was in response to the thread that trickle down economics is a great system, when demonstrably its not. The free market works far better than socialism at creating wealth at just about every level, but unfettered free market economics concentrates wealth in fewer and fewer hands at the top and actually increases inequality and poverty. As with everything in life, there has to be balance and determining where that balance is, is what is important. Right now, the USA is getting it wrong, albeit from a higher standard than most. As is the UK, where I spend a lot of time and have witnessed first hand the growing desperation of those living in low-wage jobs. Just read my comment again (or don’t) – I did say an ‘unfettered free market is not the answer’.

          • Middle aged Mike says:

            Fair enough DeeBee, I can agree with you on that. My natural instinct though is to mistrust the inevitable creep of government and it’s unerring ability to cause unintended and undesirable consequences.

    • Andrew Horsfall says:

      I am all for free markets and letting private sector take over the role of running companies. I would note that I don’t think trickle down assumptions fix things quickly enough and that some level of government directed spending should play a role. But instead of government trying to run the post office in economically unviable areas or build trains to under served towns they should instead allocate spend through subsidies that the private sector can use to build business against those subsidies. Ie don’t do nhi – rather pay a fee to medical aids connected to the care / support you wish to provide and let them provide the services. By allocating spending you can create social outcomes using the free market.

    • C Morrison says:

      The chief problem of “trickle down” economics, is the “trickle” part.

    • Dragon Slayer says:

      The case can be made that South Africa is already privatised. Anything other than the most menial activities are all outsourced to consultants or private sector service providers. Ultimately we are paying municipal salaries for no discernible outcome and massively inflated cost (i.e. operational cost + profit + corruption margin) – it all comes back to cadre deployment and the utter failure of education.

  • Chris Taylor says:

    The problem for the workers is that the SEO’s they work for are heavily overstaffed and overpaid. No private investor can carry passengers in the workforce, so many will be laid off and will not find fresh work. Just imagine what Transnet’s numbers look like: productivity at 50% or less of what it should be, yet no retrenchments. How many thousands sit around and play cards all day? “That’s not our fault”, they will say, “we shouldn’t have to pay.” But they will, for all the Communist Party and the unions try to stop it.

    • Ben Harper says:

      A little known fact – the highest productivity rate ever experienced in Cape Town Container Terminal was achieved when contract labour was brought in to do the work when the unions went on strike

    • Johan Buys says:

      Chris, a case in point is Eskom with R800k average salary.

      I would pay good money for a per person salary dump so that one can publish a stratified table of how many are paid over 2 million per month

  • Robert Pegg says:

    A good article that gives hope where no hope exists. Free market will solve a lot of problems and doing away with BEE is a step in the right direction. The poor will still have to be supported from tax revenues, as is done is most democratic countries. The Department of Trade and Industry is a problem that prevents free trade instead of encouraging it. My experience with the DTI is one of complete frustration.

    • Alley Cat says:

      My experience was the same. Local manufacture of products that need casting mandated. Problem was, all but a few of the foundries had closed down. And where did they expect foundries to get electricity? IDIOTS!!

  • Sydney Kaye says:

    It is true that free for all privitisation would mean that unprofitable services would be discontinued,which is where regulation comes in. But that can only be achieved when the state welcomes private business and cooperates with it instead of fighting it as an enemy.

  • Miles Japhet says:

    Mbeki misses the point – state subsidies for the poor, to access services delivered by privately run entities, is the solution to ensuring access.
    The assumption is that competition will ensure good value for money for citizens in general.

  • Natale Labia says:

    You’re conflating privatization with state exit. They are totally different things. What mbeki in 2000 was advocating was the systematic, organised sales of key SOEs to the private sectors, in which case provision of public goods to even the poorest would have continued as before (possibly even cheaper given higher competition). What is happening now with Eskom and transnet is state failure – they simply can’t provide to anyone, therefore the piece meal solutions are necessitated by the private sector. The two things are completely different – one optimal, the other suboptimally disastrous.

  • Wilhelm van Rooyen says:

    The poor already have nothing under the existing system – no electricity, no water, no functioning sewage system, as their government is useless. So how will they be worse off under privatisation? In my view they will have more opportunities should the economy be run on a free market basis. There will then also be more tax revenue to support the poor. And, SG, you and others miss a point – the R85b that was spent on solar installations actually resulted in reduced levels of load shedding for the remainder of the population and business. So don’t be so quick to critisize the “golf islands of light”. We have spent hard earned cash to provide our own electricity, after already having paid for Eskom through taxes in the past. None of us actually like the panels on our roofs, and we would much rather have used the capital elsewhere. But, we have created jobs, provided electricity to our homes and businesses, whilst benefitted the rest of the country. Show me where the government has managed to do this…

    • Glyn Morgan says:

      Spot on. I recently changed my 80% flat batteries and an inverter suitable only for lead-acid batteries for a Li battery and new matching inverter, at great cost. The workers doing the job got their share of the four batteries and one got the perfectly good inverter. There are now four small golf islands in Langa. That is free enterprise in action.

  • Fanie Rajesh Ngabiso says:

    Eww, look at all that ANC
    Ugh, so useless
    We can’t go over it
    We can’t go over it
    We can’t go under it
    We can’t go under it
    We’re just gonna have to go through it
    Ugh, if I have to
    Squirsh, squirsh, squirsh, squirsh

  • One only has to fly into OR Tambo and count the many FlySafair planes on the tarmac vs the one or two SAA planes to realise that the privatisation of air traffic is now irreversible. There is no comeback route for the dinosaur SAA while FlySafair provides an ever-creasing multitude of cost-effective flights which are efficient and leave on time.

    • Yes, the incompetence of SAA lead to their downfall. The unions say that privitisation will increase costs to the consumer but I can remember that FlySafair tickets were always cheaper (in most cases) compared to SAA. Just more competence without the bloated employee numbers. FlySafair also cut all the extras out of the domestic flights like booze and food that most passengers did not really want or need but were paying for.

  • Andre Louw says:

    The ANC has been spectacularly successful at privatising state owned enterprises through its policy of race based cadre deployment.
    From courier services taking over the work of the Post Office, private security firms taking over the function of a useless SAPS, Road transport and taxis that of PRASA, SAA, TV and radio, ISCOR and ESKOM slowly but surely.
    For Thabo Mbeki to finally recognise this gives a glimmer of hope to an economy ravaged by the ANC and its tripartite alliance’s Marxist ideology, corruption and stupidity.
    One can only expect the situation to get worse before we hopefully might rise phoenix-like from the ashes. Post colonial sub-Saharan Africa’s record of success leaves one a dearth of the commodity, hope.

    • Gerrie Pretorius says:

      Unfortunately The Post Office, SAPS, PRASA, SAA, SABC, TRANSNET, ESKOM and all other SOEs costs the taxpayers billions that gets channelled to anc cronies. Disgusting!

  • Denise Smit says:

    I disagree, about the great human cost. It will grow the economy and make the poor less poor. I also disagree on the golgislands of light. I am a pensioner and has had to spend my savings to have light – you are woke. I also have to spend a lot of money for private health services which is getting less and less. Those who want to have there children grow up able to read with meaning , write and to sums, have to spend their money for quality education. Safety is a big concern and the police state police service do not provide this, that is why people are forced to spend on private security. The ANC/EFF have proven that they can not govern but their ideology is based on the facts that during a revolution everything of the previous regime must be destroyed. That is why nursing schools was closed, agricultural schools was closed, the educational system was changed, Eskom was destroyed, the railways were destroyed, the harbours were destroyed, the old Post Office was destroyed, the Parlament was burnt, safe water and sewerage systems were destroyed, roads were destroyed, etc, etc , etc. All competent employees with experience and institutional knowledge was removed. Get an objective grip on yourself. Denise Smit

  • John Storey says:

    It’s like half the story. This isn’t analysis or if it is it lacks understanding. The state spending hasn’t changed much as a percentage of GDP. It can pay for services that are properly provided at the lowest cost (or by the most connected flunky) as it chooses. Nobody needs to be left out. However most states and SA in particular at this juncture of its history are useless at making same. Our problems are greater still. We are unable to project manage what should he made. That is a job that shouldn’t be left to private enterprise (see water utilities privatised in UK).

    However individual power companies wheeling into a grid with the state buying and subsidising power for the poor would have seen our power crisis end 20 years ago. Still now, transparent bidding for the rights to run individual power stations on a least cost per megawatt basis with penalties for lost production would change our power paradigm in months.

    The ANC’a obsession as a party of needing to make everything or buy from a party funding tenderpreneur has got us here and will only stop when the money ends or the service collapses.

    Water is next

  • Denise Smit says:

    Most of the population watch the free television channels which is the word piece of the ruling party. Very few can afford payed television channels. Denise Smit

  • Heinrich Holt says:

    My heart goes out to the poor. However, it cannot be denied that the their vote has been bought for many years, and this will continue. So they are partially part of the problem. So if privatisation can save a failured state (if it is not too late), lets hope that the spin-offs will also be a more market orientated gonverment (not ANC) and the private sector doing what is right in terms of CSI.

  • Middle aged Mike says:

    You earn what you vote for so much suvking up will need to be done. Socialism barely works when its run by smart, capable and honest people. The plonkers in charge here are none of those things.

  • Andrew Cowen says:

    An issue with state companies is that the state oversees and regulates them ie overseas and regulates itself in effect. A recipe for underperformance and corruption.

  • Dee Bee says:

    Mbeki’s views are stuck in the mid-20th century, when he studied in the UK. The world has moved on and the debate is far more nuanced that the zero-sum game of privatise or not privatise. To concession or outright privatise our rail infrastructure will be a tremendous boost to the economy and job creation, given that we’re losing an estimated R1bn a DAY because of Transnet’s botching of the system: poor people will be completely unaffected by this, other than potentially actually getting jobs in mines, on farms, in manufacturing and industrial enterprises that supply the rail and port system, and the services companies that support them. What is the cost to impoverished South Africans of a lack of access to reliable water and power? Spending hours every day collecting firewood (or buying charcoal) and buying or collecting water from whatever source is available, contributes directly to poverty because it removes that person from productive activity. The same for decent roads – the cost of collapsed roads is, at best, an increase in the cost of vehicle maintenance and loss of jobs as companies move elsewhere, and at worst, people dying on our roads because of their collapsed condition. As for the unions, they’re part of the tripartite alliance and have done the square root of FA to hold the ruling elite accountable and to provide good state services – largely because their members refuse to provide decent services.

  • Henry Henry says:

    What Grootes underplays is that Mbeki deeply laments this trend towards privatisation, as counterrevolutionary. His hands and notes even shake (with rage?)
    The subtext is that ANC/Black rule (and the much vaunted revulution) get escaped/undermined by citizens through privatisation/self-help.

  • Iam Fedup says:

    Mbeki’s comments are rather ironic given that he presided over the mess that led directly to the catastrophe we are currently experiencing. Why doesn’t he go hire a stadium or two and tell the masses about his feelings? Because he will no doubt be exposed. Excellent article, by the way,and some really insightful comments.

  • Anthony Kearley says:

    While it is wonderful to help your fellow man, we do plenty already through our tax and social grant system. There are just so many poor in SA and presumably more sliding across our borders as we speak, that our small minority of upper middle class cannot possibly help every last one before being morally allowed to do for ourselves.
    There is a difference, which leftists ignore, between helping someone else and helping everyone else. The former is noble, the latter is impossible.
    That being the case, then shaming comments like “what about the poor” while we try to do something constructive about the issues we face, seems like nothing more than social posturing for unearned kudos…. and ought to be ignored with the disdain it deserves. Privatise with a clear conscience my fellow South Africans, for it is better to have an unequal blessing than an equal curse.

  • Middle aged Mike says:

    “The Highveld region of the National Union of Mineworkers (NUM), which represents workers in coal mines, has said that it supports privatisation at Transnet, as the union has 35,000 members who could lose their jobs because the ailing state-owned enterprise is unable to move coal to the coast.”

    Oh the delicious irony. Even committed commies have to face up to hard realities eventually. Pity they couldn’t have done so before bringing the country quite so low.

  • Jonathan Taylor says:

    Far too many unnuanced comments on old ideological views on privatization vs state owned dichotomy – its a continuum and they are not necessarily mutually exclusive. Even USA has a Competitions Commission of sorts. So to say that all socialism has failed is a blinkered view of the world. The Scandinavian countries have the world’s best quality of life by all objective medical, health and social indicators. So the idea of concessioning out key pieces of SA infrastructure to the private sector is sensible, rather than holding a fire sale of state assets that will be bought out to maximize profits for the investors and in all likelihood will make services unaffordable except to the elite. So some forms of cross-subsidization will be necessary to improve the standard of living of the poor majority. Interesting article Stephen, and by the way when I worked for a parastatal in the 70’s and 80’s the private sector was definitely better paid than the public sector, but as the ANC has deployed its cadres and their friends and families into the state sector this situation has changed over the last 25 years and gobbles our taxes whilst simultaneously dropping productivity levels in the public sector.

    • Middle aged Mike says:

      Have you got any examples of places more relevant to us where socialism has worked? Something in Africa perhaps? The fact that socialism lite has worked in scandanavian countries has much to do with scandinavians and little with any particular merits of socialism as a system.

    • Henry Coppens says:

      There is a big difference between what some refer to as the ‘socialism’ of Scandinavian and other countries and the socialism in communist states.. The Scandinavians et al are not ‘socialist’ in the communist sense, they are WELFARE states – many free services albeit with high taxes – but highly efficient -good bang for thier tax bucks . What these countries show is that you can have a welfare state that is highly anti ‘ communism socialist’ and provide the best for their people. Take these countries out of the ‘ socialist’ list and you are left with the true socialist (i.e communist, or neo…) states, and to a man they are all failures. SA is a good example where trying to follow the communist type of socialism, in their communist (or true socialist) inspired NDR plan is an abject failure.

      • Middle aged Mike says:

        Indeed. Hence my use of socialism lite. If you listen to the NHI and basic income grant enthusiasts you’d think we were much the same. We however bugger up just about everything that they don’t and the only thing that we do better is provide lives of incredible luxury for the ineptocrats who our equally inept electorate put in charge of us every 5 years.

  • Bruce Danckwerts says:

    We make a mistake in assuming that the choice facing South Africa (and indeed all nations in the world) is between state-run and private-enterprise utilities. Neither has really delivered, to the extent that the Labour Party (in the U.K.) is discussing re-nationalizing the Railways, should they come to power. At the same time many water and energy utility companies in the U.K. are bankrupt. An alternative choice is to accept that any utility is a Common Pool Resource, in that we all want that service, when we want it, at a rock-bottom price. Most people assume that such a CPR would suffer from “the Tragedy of the Commons” but the late Elinor Ostrom showed that this was not necessarily the case. Provided a CPR was managed under the 8 principles (that her research had identified) they could, in fact, operate better than either a state-owned or a private-enterprise utility. Her 8 principles required that (1) the Stake-holders set the rules (i.e. ELECT the board) and (2) that there is MAXIMUM transparency. A Utility is a public good and therefore ALL board decisions and ALL finances should be revealed to the Public. In the S.A. situation, I suggest starting with ESKOM or the Guateng Municipality (possibly the two most failed service providers – out of a wide choice) and apply all 8 of Ms. Ostrom’s eight principles – see her book Governing the Commons. Update these principles by using the Internet. You have nothing to lose, and everything to gain. Bruce Danckwerts, CHOMA, Zambia

  • Spencer Eckstein says:

    We should be much further down the development road, than having sterile debates about state led vs private market initiatives. While its clear Pretoria will not provide, what’s needed is a deep ideological shift not from left to right but away from an obsession with state ownership to pragmatism.

  • Dr Kerryn Krige says:

    The debate of public-private action happens along a spectrum, but which always seems to minimise the important role for social organisations. They are key, as for me they bring a diversity of action that responds to the diversity of needs that we have in our unequal country context. Here the benefits of social enterprises and other social and solidarity economy organisations stand out: as they bring services into communities that fall well outside of the reach of public and private initiatives. At the same time, these organsiations should not be positioned as a solution: questions are rightly raised on commoditisation and exclusion. Rather they bring an alternative to existing mechanisms which allows us to more meaningfully re-calibrate how services are delivered, to who and by whom, and to whose benefit.

  • Glyn Morgan says:

    Some things to consider….
    1/. The more privatisation, the more workers in private companies. Duh!
    2/. The fewer workers in government the more efficient government will become.
    3/. The more workers in private companies the more upward mobilisation there will be.
    4/. The better the economic situation is the more thought families will give to the size of those families. Fewer unwanted children.

  • craig06 says:

    If govt provided these services to their constituents then privatization would not be a solution.

    • Henry Coppens says:

      But government can only provide these services if there is privatisation to produce the funds, from taxed profits . Morever, privatisation provides jobs and these employees pay taxes. Although it has its weaknesses, this is why capitalist free enterprise enriches all – all boats are raised and float in a rising tide. Classic example: property ownership, a product of this, enriches, whereas state ownership of property empoverishes. How? quite simple. if you own property you can get a lone to buy, say, a car

  • Peter Oosthuizen says:

    We should ask why countries such as Zambia that nationalised evrything had to crawl back to companies with the knowledge , capability, capital and importantly, willingness to accept risk to get their mining industry working again

  • Alastair Campbell says:

    There is a not so subtle difference between Privatisation and Grid Defection.
    Consumers who elect to install their own Rooftop PV systems are defecting and generally dont return to Eskom, once done.

    Privatisation is the sale or concessioning of a formerly state owned function/utility to the private sector. The purchaser/concessionaire is then tasked with running what had until then been a state run enterprise. This is either a permanent arrangement, or a temporary (concession) basis. At the end of the concession term, the concessionaire either negotiates an extension to the concession from the conceding authority, or it hands the asset back to the conceding authority.

    They are two quite different things and shouldnt be used in the same context

  • Johan Buys says:

    Mbeki said “ In political science, this is characterised as a counter-revolution, and a counter-revolution is not innocent, but in our case, a direct threat to our democratic state and the welfare and wellbeing of millions of our people,”

    Sir, the real threat to the wellbeing of millions of our people is the continued application of cadre-based and race-based and policies and appointments that inevitably leads to a collapse of basic service delivery.

    Take this debate out of middle and upper class and focus on the 45 million poor that have no hope of a job, no water and electricity, crumbling roads and waste water systems.

    You cannot pay people a big enough social grant (that you anyway cannot afford) to overcome the problems described, unless you find $10 oil and $20 gold. And even then, your cadre comrades will steal $80 per barrel of oil and $1900 per ounce of gold long before those profits trickle down

    • Middle aged Mike says:

      Hear bloody hear. I’m not sure if Mbeki sickens me more as a recently minted ‘elder statesman’ deploying wisdom floaters or as the AIDS denialist lunatic who some credit with the avoidable deaths of 400k people.

  • Gerrie Pretorius says:

    “… the private sector will solve many of our problems — at a very high human cost.“ At least the problems will be solved. The anc doesn’t solve any problems (sorry – challenges) and the human cost is currently at it’s highest ever. Education is a mess; Electricity is missing most of the time; The rail and road infrastructure is a mess; The SABC is bankrupt; SAA slurps taxpayers’ earnings; Denel is useless; The water supply is full of crap; and there are many more examples of ‘human cost’. It will be much better when the private sector takes over.

  • eelco.dykstra says:

    There are many people all over the world who tend to approach this the wrong way around. First, define what the essential services and products are that are needed somewhere. Then answer this question: “How good is ‘good enough’?” This gives you the minimum acceptable baseline. Then set out to see which public or private entity is most likely to provide the highest quality at the lowest cost – and award a time-limited contract to provide for these services or products.

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