04 Nov.
Nationalisation won’t solve problems.
Nationalisation won’t solve SA’s problems of low growth and high unemployment, economist Vivan Atud told the Free Market Foundation on Thursday.
Atud was delivering a paper in which she examined the nationalisation that had taken place in the 12 countries currently being investigated by the ruling ANC’s task team on nationalisation – Chile, Norway, Sweden, Finland, Zambia, Brazil, Venezuela, Namibia, Botswana, Malaysia, China and Australia.
“After looking at all the data available for these countries, I have found that the only success stories are those of public private partnerships such as the one in Botswana in the diamond mining industry and the case of China, which nationalised and then liberalised significant parts of its economy.”
Atud said that in most European countries such as France, Sweden, the UK and Norway, the practice of nationalisation had always been followed by privatisation. This had also been the case in countries in other parts of the world such as Zambia.
Atud added that the 12 countries being investigated by the ANC task team differed significantly from SA with regard to economic variables including the Gini coefficient, GDP growth rates, per capita GDP and unemployment.
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“SA has the highest rates of unemployment in terms of the Gini coefficient and compared to most of these countries has a low per capita GDP as well.”
Atud said her study had indicated that these countries could not provide a convincing record of nationalisation successes and therefore could not provide a sound framework on which to base SA’s economic policy for the future.
“Inevitably, in all of the countries, nationalisation resulted in lower production, lower efficiency and the undercapitalisation of major industries.”
Atud suggested that in order for SA to solve its economic problems, government needed to hand back to its people “the means to produce as much as they can, give them the freedom to work wherever and as hard as they can, and allow them every opportunity to profit from their endeavours.” – I-Net Bridge
Source: Business Report
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