STATE OWNERSHIP AND THE NATIONAL DEMOCRATIC REVOLUTION:
DEBATING THE ISSUE OF NATIONALISATION

The People Shall Share in the Country's Wealth!
The national wealth of our country, the heritage of South Africans, shall be restored to the people;
The mineral wealth beneath the soil, the Banks and monopoly industry shall be transferred to the ownership of the people as a whole;
All other industry and trade shall be controlled to assist the wellbeing of the people;
All people shall have equal rights to trade where they choose, to manufacture and to enter all trades, crafts and professions.
Freedom Charter, 1955

In Makeni, Lusaka, at the HQ of the ANC's Department of Information and Publicity there was an old man called Mpanza, umgwenya, who was responsible for maintenance of the complex. He had little formal education, and so we rarely involved him in our discussions on scripts for Radio Freedom and Mayibuye, our arrogant assumption being that he had nothing profound to contribute.

Until one day when he found us debating whether the Freedom Charter would lead to socialism or not: his intervention in flowery isiZulu, was profound - tribute to the night schools of the liberation movement before its banning. Especially when we achieve our freedom there will be intense struggle around this issue, he argued, because the Charter can be interpreted in all kinds of ways. Capitalist-oriented freedom fighters will pull it in their direction, while socialist-oriented ones will pull it in a different direction; and this will ultimately be resolved by the balance of forces.

This reminded us of how Jack Simons had explained the issue in his lectures in the camps. Clearly, to us, the injunction in the Freedom Charter that the national wealth and the land should be restored to the people was yet another demonstration of the socialist credentials of the ANC. But, Jack would respond sternly, doesn't the Charter also say that people will be free to trade where they choose? In any case, even if land were subdivided or commonly owned by those who work it, some of them will succeed and others will go under. Those who succeed will progressively take over others' tracts of land, and in time, the system of ownership would revert to the capitalist default, merely with the colour of the owners having changed!

Of course this is an oversimplification. But one could not but be reminded of these episodes in the current raging debate on the nationalisation of the mines.

Are we today witnessing what Baba Mpanza predicted? What about the alignment in the debate, with the South African Communist Party pulling in one direction, and the ANC Youth League - presumably to the Party's right - campaigning for nationalisation? Or are we missing something in the battle of the sound-bite?

A changing paradigm

Unfortunately, a debate at the current level of abstraction cannot answer the fundamental question about the evolution in the formal interpretation of the Freedom Charter during various phases of the struggle. Shifts at a conceptual level, hardly acknowledged, have taken place over time - and it is this failure openly to acknowledge these shifts that in part is responsible for the misunderstandings on this issue.

The ANC Youth League is factually correct in its interpretation of the interpretation of the Freedom Charter in years gone by. In the words of former President Nelson Mandela in the 1950s:

"It is true that in demanding the nationalisation of the banks, the gold mines and the land the Charter strikes a fatal blow at the financial and gold-mining monopolies and farming interests that have for centuries plundered the country and condemned its people to servitude."(1)

This point of view is formally confirmed, among others, in the analysis of the Freedom Charter adopted at the 1969 Morogoro Consultative Conference:

"It is necessary for monopolies which vitally affect the social well-being of our people such as the mines, the sugar and wine industry to be transferred to public ownership so that they can be used to uplift the life of all the people. All other industry and trade which is not monopolistic shall be allowed with controls to assist the well-being of the people" (2).

Until after the 1992 World Economic Forum meeting, Nelson Mandela had steadfastly stuck to this position. He has indicated that his change of mind was in part a result of interactions with the captains of industry and delegates from, among others, Vietnam and the People's Republic of China.

Herein lies the intersection of strategy and tactics: on the one hand, concerns about the response of the investment community and, on the other, conceptual approaches adopted by movements perhaps even more "revolutionary" than the African National Congress. And it was not the first time that the issue had arisen in this way. Similar arguments had been raised by Cuban leader Fidel Castro during his interaction with ANC leaders in the late 1980s. In a sense, on this issue, Mandela was somewhat behind the curve - for the movement had in the 1980s started re-examining its interpretation of the "wealth clause" of the Freedom Charter.

It is in this broader context that the debate on the nationalisation of the mines should be understood. At the one level it is about the profound issue of the approach to property relations in a national democratic society - the relationship between the state, the markets and the citizen. At another level, it is about an understanding of the balance of forces and the difference between what may be desirable and what is actually possible.

The former is the most fundamental, for it relates to the very concept of the ultimate objective of the democratic struggle. Debates about balance of forces are, more often than not, about what is in the eye of the beholder. In any case, what needs to be done under a given balance of forces should derive from the understanding of the ultimate objective - even if there may be tactical detours.

So what has changed over the past 25 years, and why!

Compare Mandela's earlier writings and the Morogoro interpretation of the Freedom Charter (quoted above) on the one hand, and the ANC's 1992 Ready to Govern document and the 2007 Strategy and Tactics, on the other. This is how Ready to Govern treats this issue:

"The democratic state will have ultimate responsibility - in cooperation with the trade union movement, business and other organs of civil society - for coordinating, planning and guiding the development of the economy towards a sustainable economic growth pattern...

"We envisage that such a developmental state will... be responsible for the provision of infrastructure in the form of roads, dams, telecommunication, transport and power stations, as well as for the furnishing of utilities such as water, electricity and waste disposal services, in ways that empower community-based organisations.

"We envisage a dynamic private sector, employing the skills and acumen of all South Africans, making a major contribution to the provision of good quality, attractive and competitively priced goods and services for all South Africans. ...

"In the context of the growth and development strategy, the role of the state should be adjusted to the needs of the national economy in a flexible way. The primary question in this regard is not the legal form that state involvement in economic activity might take at any point, but whether such actions will strengthen the ability of the economy to respond to the massive inequalities in the country, relieve the material hardship of the majority of the people, and stimulate economic growth and competitiveness.

"In this context, the balance of the evidence will guide the decision for or against various economic-policy measures. Such flexibility means assessing the balance of the evidence in restructuring the public sector to carry out national goals. The democratic state will therefore consider:         

• Increasing the public sector in strategic areas through, for example, nationalisation, purchasing a shareholding in companies, establishing new public corporations or joint ventures with the private sector;
• Reducing the public sector in certain areas in ways that will enhance efficiency, advance affirmative action and empower the historically disadvantaged, while ensuring the protection of both consumers and the rights and employment of workers.

"Such a mixed economy will foster a new and constructive relationship between the people, the state, the trade union movement, the private sector and the market."(3)

Contained in this approach are critical changes of nuance - nay more, of policy - on the issue of state ownership in a national democratic revolution. Firstly, unlike in earlier interpretations of the Freedom Charter, state ownership is not posited as the in-principle alternative to all private monopolies: rather, this would be informed by the impact such ownership would have on the ability of the economy to address poverty and inequality and to encourage growth and competitiveness. Secondly, the developmental state should be responsible for enterprises that provide public goods such as infrastructure and basic services. Thirdly, the private sector, including monopoly capital, is treated not as an enemy, but as a potential partner - and yet one that needs to be regulated. Lastly, balance of evidence would inform decisions to either increase or reduce the public sector while protecting consumers and workers.

In similar vein, the 2007 Strategy and Tactics document, argues:

"A thriving economy in a national democratic society requires as efficient a market as possible, shorn of the racial and gender exclusions that characterised apartheid colonialism, and freed from the barriers to entry and competition that the economy endured under colonial capitalism. It will also require a state able to use its capacities to direct national development through fiscal redistribution, utilisation of State-owned Enterprises and effective regulation.

"A national democratic society will have a mixed economy, with state, co-operative and other forms of social ownership, and private capital. The balance between social and private ownership of investment resources will be determined on the balance of evidence in relation to national development needs and the concrete tasks of the NDR [National Democratic Revolution] at any point in time...

 "The relationship between the national democratic state and private capital in general is one of ‘unity and struggle', co-operation and contestation. On the one hand, the democratic state has to create an environment conducive for private investments from which the investors can make reasonable returns, and through which employment and technological progress can be derived. On the other hand, through state-owned enterprises, effective regulation, taxation and other means, the state seeks to ensure redistribution of income, to direct investments into areas which will help national development, to play a central role in providing public goods and broadly to ensure social responsibility. The balance between ‘unity' and ‘struggle' will be dictated to by the strategic imperatives of the NDR." (4)

The resolution of the 2007 Polokwane Conference on the economy confirms this approach and further elaborates immediate tasks in this regard. Amongst others it calls for government-wide economic planning; a strategic role for the state in shaping the key sectors of the economy, including the mineral-energy complex and the national transport and logistics system; and ensuring that our national resource endowments, including land, water, minerals and marine resources are exploited effectively to maximise growth, development and employment potential. Further, it notes that many "monopolies are based on the nation's natural resources and we must find ways and means to intervene, including through state custody of these resources on behalf of the people and regulation to ensure competitive pricing of inputs for our downstream manufacturing sector." (5)

Strategic versus tactical considerations

This then is the shift that has occurred over the years in the ANC's approach to state ownership of the means of production. It may as well be that a reading of the global and domestic balance of forces informed a particular stance in each phase.

Because this shift occurred in a period of the weakening and ultimate collapse of the socialist system in Europe and the rise of neo-liberal fundamentalism across the globe, it can be argued that it represented a tactical response to a changing global environment. But the facts suggest that the correlation and causality were much deeper than this: the change had more to do with profound lessons deriving from this collapse - leading to reflections on the internal logic of a national democratic society and the place and character of state ownership  - rather than a mere change in the strength of progressive forces.

It would therefore be wrong to suggest that the shift is one based merely on tactical considerations: that the ANC is lying in wait until it is strong enough to nationalise all mineral wealth, the banks and monopoly industry!

Rather, contained in this is a conceptualisation of state ownership in a national democratic society that is different from approaches that prevailed before the mid-1980s. This applies to the core function of the state in the economy and how it relates to the market and the private sector, eloquently elaborated in Ready to Govern. Combined with this is the tilt towards characterising the private sector - including monopoly capital - as a potential partner in development, a far cry from a literal interpretation of the "wealth clause".

This change of approach is also discernible in the treatises of the South African Communist Party in relation to the national democratic revolution and even to socialism. 

For instance, in the programme adopted at its 2007 Congress, the SACP argues for rolling back the power of monopolies (an "adversary"). On the NDR, though it reasserts the "wealth clause" of the Freedom Charter it also calls for the mobilisation of private capital, based on "clear objectives and concrete tasks, which should include a priority on job-creating investment, skills training, appropriate and sustainable development of the forces of production, the elimination of compradorist, parasitic and other corrupt tendencies, and an active contribution to a strategic industrial policy that overcomes CST [Colonialism of a Special Type] sectoral and spatial imbalances." (6)

Arguing that "[a] socialism of the 21st century will need to think and act differently" (7), the SACP emphasises "socialisation" of the economy as a critical material foundation of the socialist system which includes a state sector, co-operatives and worker-empowerment on the shop floor. This sector would be dominant and hegemonic, but in a mixed economy.

In brief, there has been a shift in the conceptualisation of the strategic objectives of the liberation movement in relation to the issue of property relations. At the centre of this is the differentiation between goals (poverty eradication, equity, economic growth and development of technology and skills) and mechanisms to achieve this which may or may not include nationalisation.

It is therefore ahistorical to quote texts from some half-a-century ago as evidence of an immutable policy stance, without an appreciation of the obvious changing context.

However, nothing in this changed approach rules out, as a matter of principle, nationalisation of the mines or anything else. Who can dare rule out such a possibility for all time, under all circumstances, let alone in the midst of the current interventions to deal with the global economic crisis even among the most blue-blooded of neo-liberal dominions in Europe and North America?

But this is neither here nor there. The fact is that there has been a shift from an a priori determination to nationalise the mines, the banks and all monopoly industry and to view monopoly capital as an enemy of the NDR.

And so, this brings us to the debate on "balance of evidence": what is it and how is it determined!

Deciphering the notion of "balance of evidence"

An approach based on "balance of evidence" is informed by the understanding that state ownership is not an end in itself. The critical objective is to ensure higher rates of growth in a manner that reduces poverty and inequality. State ownership is therefore a means to an end. 

Whether there should or should not be state ownership in a particular sector should be based on this central consideration. In a flexible way, the role of the state needs to be adjusted in answer to two critical questions: does it strengthen the ability of the nation to deal with poverty and inequality; and does it strengthen growth and competitiveness!

This presumes that the private sector and the market would play an important role in economic growth and development. As such, a constructive relationship should be built with this sector, in addition to civil society generally.

However, to achieve the objective of growth combined with development, the state should have the capacity to direct the country's economic trajectory.

Further, state ownership is critical in sectors that provide public goods and services. In this area - with some few exceptions - the balance of evidence, in the mind of the ANC, points to a definitive course of action.

A number of instances since 1994 illustrate the "balance of evidence" approach.

Quite correctly, the decision was taken for the state to divest from activities that had very little to do with public goods or broader imperatives of growth and development. Urban legend has it that in the 1980s, impressed by the lunch he had at Telkom offices, President PW Botha instructed that they should open and run a similar restaurant at Union Buildings (Meintjieskop). On the balance of evidence, such a non-core assets could not conceivably be kept in the hands of the state. The same applies to Aventura holiday resorts for which a COSATU investment company submitted a bid.

There were also instances where, in order to raise funds for investment purposes, equity in some state-owned enterprises was sold to the private sector. Though the reasons may be quite specific, the experience of the Airports Company with the Aeroporti di Roma equity partnership does show that such undertakings can go wrong; and the state had to buy back the stake.   

On the other hand, having assessed the slow progress in the provision of broadband capacity, in part impacting on the prices of telecommunications, the state decided at the turn of the 2000s to set up Infraco.

These examples - about which there would be little debate - demonstrate considerations pertaining to balance of evidence.

Currently, serious consideration has to be given to bringing on board private players in the generation of electricity, including in the construction of some of the Eskom power stations. What is the alternative, given the debilitating effects that higher electricity tariff increases would have on the economy and society at large, and the limits of Eskom's gearing capacity in the form of the ratio of its debt to its value as a company. Again here, the principle of balance of evidence would have to be applied in the detail.

There are many other experiences in the period since 1994, the implementation of which was governed by the Framework Agreement with stakeholders. Many of these have generated legitimate debate about whether in all instances the balance of evidence approach was applied correctly. The reviews conducted by government have pointed to numerous lessons, including:

• Monopolies, whether state or private, have to be effectively regulated; and the regulators should have the capacity to assert their authority.
• Restructuring processes should be undertaken in a manner that protects workers and the poor; and this is easier said than done.
• While corporatisation may improve the efficiency of State-owned Enterprises (SoE), an approach that leaves them to their own devices without an overarching strategic plan, clear funding and capitalisation models and investment programmes is bound to lead to a shambles.
• Insufficient attention to the role of SoE in providing economy-wide services such as the training of artisans can undermine the economy as a whole.

This brings out in sharp relief the central question of state capacity to lead in directing the country's economic trajectory. Such a trajectory entails changing the structure of the economy, including through diversifying the economic base, expanding productive capacity, ensuring greater labour absorption, expanding and integrating small and micro-enterprises, diversifying exports, integrating with the sub-continent, and so on.

To reiterate: in weighing the evidence for or against state ownership, the starting point should be about the strategic economic and broader societal objectives. The instruments to achieve this, including state ownership, levels of taxation, the rigour of regulation and so on should derive from a clear enunciation of the strategic objective.

This is the current approach of the ANC and its government, as distinct from an in-principle determination of the preferred levels of state ownership that was wont to inform earlier interpretations of the Freedom Charter. What then is the balance of evidence in relation to the mining industry?

Balance of evidence - the mining industry

It is to state the obvious to assert that the mining industry is central to the South African economy: our spatial economic and settlement patterns, the character of our skills base, the structure of our exports, the evolution of our labour relations, the nature of our land distribution and tenure system, the configuration of our transport networks, the evolution of our political systems and so on - all these were shaped to varying degrees and in large measure by the mining industry. It was the driver of South Africa's industrialisation.

While many things have changed, the broad trend continues. Among other indicators, in 2005: mining directly and indirectly accounted for about 16% of GDP and 12% of fixed investments, 50% of primary and beneficiated merchandise exports, 50% of Transnet's rail and ports volume, 16% of electricity demand, 30% of liquid fuels from SASOL's coal-to-liquid process and 93% of electricity generation from coal power (8):

***

While directly it contributes about 450 000 jobs, this almost triples if forward and backward linkages and the "induced effect" are taken into account. South Africa's contribution to global technology applications and skills in the mining sector is legend.

There is no doubt that, historically, the attitude of global powers to South Africa was shaped to a significant extent by its mineral endowments. This will continue into the future, given the character and extent of the country's reserves. For instance, according to the then Department of Minerals and Energy (DME), South Africa accounts for about 72% of the world's resource base of chrome ore, 80% of manganese, 40% of gold, 32% of vanadium and 7% of uranium. The country in 2007 was ranked 8th in the world in exploration spending. (9)

This is made the more important by the fact that South Africa accounts for 88% of the world's known reserves of Platinum Group Metals (PGM), a resource of the future. (10)

Platinum is a key catalytic material for the conversion of hydrogen into energy and for its storage and transportation; it is a key component of catalytic converters and fuel cell processes - all critical for renewable energy and the mitigation of current emissions. South Africa aims to capture a quarter of the world market for fuel-cell technologies by 2025 (11). The significance of this is underlined by the fact that the "global market for fuel cells and hydrogen technologies is forecast to be potentially worth US$46-billion by 2011". (12)

The future uses of platinum and the "common set of skills needed" for the industry, include: fuel cells, auto-catalysts, chemicals, crude refining, jet engine high temperature applications and bio-medicine. (13)

And so, the approach to the mining industry in our country should be informed by the considerations that inspired the Minerals and Petroleum Resources Development Act (MPRDA), among others, that:

• minerals are non-renewable resources and they belong to the nation with the state as the custodian
• there is an obligation to ensure their sustainable development and to protect the environment
• results of past discrimination should be redressed through, among others, equitable access and promotion of local and rural development.

The Youth League is quite correct, in addition to these issues, to pose the question whether the industry can play a larger role in improving the country's fiscal capacity; in creating more jobs and in improving working conditions; in enhancing South Africa's sovereignty; and in transforming the country's accumulation path.

Even more critical are the strategic issues about the role of some of the minerals in the world's scientific and technological development trajectory, with major implications for South Africa's place in global geo-political dynamics.

There is much that can be said about the positive trends in the mining industry in relation to the considerations outlined above, such as the enactment and operationalisation of the MPRD Act, some progress with Black Economic Empowerment including representation at top management levels, expansion of research activities, contribution to the fiscus in the context of the vagaries of the market, comparatively less acrimonious labour relations, joint processes to deal with accidents and so on.

However, a number of challenges do point to the need to attend to macro-issues in the industry. To quote a few instances:

Firstly, the fact that for part of the last decade the industry experienced a counter-intuitive tendency of declining fixed investments and low growth in mining production, in the midst of a commodities boom, is cause for major concern. This comes out even more starkly when compared with Australia (14):

 ***

Secondly, little progress has been made in developing the much-vaunted mining sector strategy as part of the country's industrial policy and action plans.

Thirdly, South Africa can hardly claim to be exploiting the opportunities for mining-related backward and forward linkages optimally. With regard to beneficiation, for instance, the impression among many in government is that there is dogged resistance to a comprehensive approach to this within the private sector. 

Fourthly, besides weaknesses of demographics in management, professional, skilled and semi-skilled categories, the industry is "not producing sufficient skills to replace the ageing engineering and artisan population, let alone gear the industry for growth".

The fifth challenge is about the extent of commitment to cutting edge research especially in the PGM sector. Some progress has been made in this regard; but hardly of the kind that will achieve the target referred to by Minister Pandor (a quarter of the world market for fuel-cell technologies by 2025). Ironically, some of the most advanced research in this regard in the European Union, United States and Japan is being financed by South African companies.

In brief, the scorecard is a mixed one: the industry definitely needs to improve on the positives and correct the weaknesses.

Is nationalisation the solution?

Is nationalisation the best way to deal with these weaknesses and optimise the opportunities?

To recapitulate: the starting point in answering this question should be whether the core strategic objectives of addressing poverty and inequality and encouraging growth and competitiveness would best be served by such policy action! Implied in this is the question whether there are other means - of less risk and cost - to attain the same objective!

In this regard, it is critical to examine the sources of some of the weaknesses outlined above.

The challenge of investment during part of the last decade can be attributed to a number of factors. There is no doubt that some investors were in principle opposed to the transformation envisaged in the MPRD Act, the extreme among whom are the litigants in the case of Foresti and Others who sought to challenge the act with regard to the conversion of old order rights.

But, in the main, mining investments were negatively impacted by factors such as infrastructure bottlenecks, long lead-times in acquiring machinery, the volatility of the exchange rate, insufficient capacity within the then DME in the early days of MPRDA implementation and slow processing of environmental impact assessments. In this regard, the challenge, quite clearly, is not whether the mines are in state hands or not.

Related to this is the issue of the mining sector strategy, which has taken inordinately long to develop. And both government and the private sector are responsible for this. Even if the mines were owned by the state, without a sector plan, there would be no strategic logic to activities in the sector. This applies to such issues as optimal exploitation of backward and forward linkages, including beneficiation, as well as the current unseemly spat between Kumba Iron Ore and ArcelorMittal - which has little to do with the country's strategic interests - and the unresolved issue of iron-ore developmental pricing.

Similarly, matters of research and skills development need to be attended to jointly by the sector and the government; and some may require tighter regulation and effective monitoring and evaluation.

How about the objectives identified by the Youth League? (15)

Increase the state's fiscal capacity: There is indeed a case to be made about the revenues from the mining sector and whether the state as owner could use these for purposes of meeting social and other needs. In a comprehensive paper on State-owned enterprise reform, Ha-Joon Chang shows how some developed, developmental and developing states have successfully used ownership of mineral and other natural resources to acquire funds for developmental purposes. (16)

Norway and Venezuela are cases in point in respect of oil revenue. How to appropriate the extra revenue (rent), how it is used and the need for a carefully managed special fund, mainly for investment rather than consumption - all these are critical matters that cannot be treated glibly. Besides, the availability of such resources for the fiscus during years of plenty should also be balanced against shortfalls during lean years. The fiscal difficulties that Venezuela experienced in 2008/09 with sharply falling oil prices illustrate this. In any case, instead of nationalisation, such fiscal resources can be acquired through royalties and/or windfall taxes pegged at whatever level is desirable, practicable and sustainable.

A basis to transform the accumulation path: Ha-Joon Chang demonstrates how countries such as France, Brazil, South Korea, Singapore and Malaysia have used state ownership of a variety of enterprises to drive industrial policy (17). Instructively, he argues that state-owned enterprises are not inherently good or inherently bad. For them to be successful there should be an economic bureaucracy of high quality, monitoring and evaluation systems with quality information, and an overall strategic plan that such enterprises should drive. Again, it can be argued that the starting point in this regard should be strategic objectives and plans, and then whether these would be promoted necessarily through nationalisation.

More jobs and better working conditions: It is quite true that a state-owned mining sector could enhance job-creation and improve working conditions in the sector. But this is not a one way street. As Chang observes:

"... SOEs may be instructed to retain unnecessary workers despite making losses, because the government does not have an unemployment insurance program nor can it create more "productive" jobs through public works programs. In this case, a better solution would be to create a political environment where the government does not have to worry about generating "fictitious" employment because it has good unemployment insurance and public works programs. Setting up these programs, however, may need political reforms, because they require a political consensus for higher taxes and government deficit spending (when necessary)" (18).

Safeguard sovereignty: Ownership of mineral resources should definitely enhance a country's sovereignty. Inversely, foreign investors can do the opposite. But how can this be addressed? Is it necessarily through ownership of mining operations or through vesting custodianship over these resources in the state - as the MPRD Act does - and effecting appropriate regulations and controls?

Besides these challenges, state ownership of a resources sector would also have to contend with a critical subjective factor: the capacity and integrity of the cadres "deployed" to manage the enterprises. If the systems of such enterprises are weak and are not insulated from opportunistic political interventions, they would suffer the kind of paralysis the Chinese refer to as the "'three looks and three don't speaks': look for the direction of the wind..., when it is not clear where the wind is blowing from, don't speak; look at the color of the eyes of the supervisors..., when the colour is not right (that is, not in the right mood), don't speak; look into the intentions..., when the intentions of the supervisors are not clear, don't speak" (19).

This challenge, author Xiaobo Lu argues, arises in part because deployed cadres can become "status-conscious, and undisciplined... [cadres] who, in the manner of pre-revolutionary... local officials, put the interests of more intimate secondary and primary groups above those of the regime" (ibid:23).

This some may dismiss as a minor challenge that can be dealt with through political education and so on. But where internal party and governmental control systems are weak, it can make or break the state sector and even the whole project of social transformation. This is because state-owned natural resource companies lend themselves to corruption -they "have high ‘lootability'" (21).

In a nutshell, the call for holus bolus ‘nationalisation of the mines' is not supported by strong enough evidence.

However, government can consolidate its assets in the African Exploration Mining and Finance Corporation, Alexkor, the erstwhile Lebowa Mineral Trust (in Limdev) and relevant shares in other entities. This would need to be accompanied by a cogent strategy on the impact such a company needs to make in the industry and the rest of the economy. Its asset base can be expanded or reduced through normal processes of acquisition and disposal provided for in the country's statutes and without imposing an unnecessary burden on the fiscus. In doing so, the opportunities and dangers that attach to operating a productive enterprise should be kept in mind.

Conclusion

There is nothing inherently bad or inherently good in state ownership of productive capacity in the economy, including especially strategic non-renewable resources.

The ANC has adopted an approach to state ownership of the means of production based on weighing the balance of evidence in each particular case. This is different from an earlier interpretation of the Freedom Charter which a priori posited nationalisation of mines, banks and monopoly industry as a given for a national democratic society.

South Africa has a system in which mineral resources belong to the nation, with the state as the custodian. Attached to this is the right to levy royalties as well as a variety of regulatory instruments. At the same time, the state is building its capacity to lead economic development, among others, through the development - in partnership with all stakeholders - of a national vision and strategic plan and an industrial policy.

In these processes, the leadership of all the social partners, including the private sector and mining companies in particular, will need to adopt an approach that identifies the broader and sectoral long-term objectives. They will need to determine the role of each partner, the weaknesses that need to be addressed as well as the benefits and sacrifices that attach to each choice made - the better jointly and severally to move South Africa onto a higher growth trajectory. 

This approach does not preclude the consolidation of the state's mining assets in a company that plays an important role in the sector and the economy as a whole. This may not address all the issues raised by Baba Mpanza and Jack Simons. But it does follow a logic that is internally consistent. Critically, it does not create uncertainty, especially in a period when the economy is fragile and struggling to emerge from a recession.

Thus, the policies of the movement and the intentions of the Constitution's founders will be respected.

REFERENCES AND END NOTES

• Nelson Mandela. (1956). "In our Lifetime."  Liberation, June 1956.
• ANC (1969) Revolutionary programme of the African National Congress: An analysis of the Freedom Charter as adopted at the National Consultative Conference, Morogoro, 1969

• ANC (1992). Ready to govern, ANC policy guidelines for a democratic South Africa adopted at the National (Policy) Conference, 28-31 May 1992 as mandated by the 48th National Conference in 1991.
• ANC (2007). Building a National Democratic Society, Strategy and Tactics of the ANC as adopted at the 52nd National Conference, Polokwane, 2007
• ANC (2007). Resolution on Economic Transformation, ANC 52nd National Conference
• The South African Road to Socialism, Programme of the SACP, 2007
• Ibid
• Bernard Swanepoel, Vice-President of Chamber of SA Mines: Presentation to Mining Summit, September 2006. Landelahni Business Leaders in its 2008 Mining Research Report puts some of these figures some percentage points higher for 2007: e.g. mining generates 7% of total GDP and an estimated further 18.4% indirectly.
• Department of Minerals and Energy, SA's Minerals Industry, 2007/2008
• Ibid
• Minister Naledi Pandor (Science and Technology): Address at launch of Anglo Platinum's market development and beneficiation strategy
• southafrica.info, Article, Fuel cell future for platinum?
• Dr Boni Mehlomakulu, DDG (DST): The hydrogen and fuel cell technologies strategy (2007)
• Bernard Swanepoel, Vice-President of Chamber of SA Mines: Presentation to Mining Summit, September 2006

• Landelahni, Mining Research Report, 2008 and CEO Sandra Burmeister quoted in Business Day, 03 March 2010
• ANC Youth League, Towards the transfer of mineral wealth to the ownership of the people as a whole: a perspective on nationalisation of mines, February 2010
• Ha-Joon Chang, United Nations Department for Economic and Social Affairs (UNDESA), State-owned enterprise reform
• Ibid
• Ibid
• Xiaobo Lu, Cadres and Corruption: The organisational Involution of the Chinese Communist Party,  p100
• Ha-Joon Chang, United Nations Department for Economic and Social Affairs (UNDESA), State-owned enterprise reform

Joel Netshitenzhe is a member of the ANC National Executive Committee. This article first appeared in Umrabulo Number 33, 2nd Quarter 2010

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