Let’s not forget the other type of state capture
The proposed partial privatisation of South African Airways (SAA) and the lifting of some restrictions on the private generation of electricity have caused a flurry of excitement among some journalists and business representatives. Privatisation is here with a “bang”, while “huge steps in one week get structural reform moving”. Cyril Ramaphosa even says “permit processes” must be cut from six months to three.
The country is desperate for good news, and there is some of it around. Annualised and adjusted growth of 4.6% in the first quarter was better than many expected, while various confidence indicators, including the agribusiness one, are improving.
But the problem with the “huge steps” view, which was expressed by Business Leadership SA a fortnight ago, is that it ignores a great deal else that is going on. Black economic empowerment and employment equity legislation are becoming more onerous. Amendments to equality legislation will lumber business and other entities with a host of new demands. More and more sectors of the economy will become subject to “master plans”. “Green industrialistion” will no doubt entail further restrictions.
As for privatisation, whatever benefits might arise from the sale of part of SAA will be outweighed by plans to nationalise private health care, the implications of which were spelt out in Daily Friend last week by my colleague Anthea Jeffery. The African National Congress (ANC) is also busy planning to empower the state to confiscate – in other words, nationalise – land and other private property.
So if privatisation is here with a “bang”, thanks to the proposals for SAA, nationalisation will soon be here with a much bigger bang unless the ANC and its various allies can be persuaded to abandon their planned assaults on health care and private property. The fiscal gains derived from selling off a chunk of SAA will be trivial when compared with the immense fiscal, economic, and human costs of nationalising health care and expropriating private property.