"Those who the gods wish to destroy they first make mad".

It would indeed be madness for the ANC to even contemplate nationalising South Africa's mining industry (not to mention the banks as well) for all the reasons so cogently outlined by Paul Trewhela (see article).

In addition to the compelling arguments he marshalled there is also the powerful downward pressure such a move would directly and indirectly put on the rand exchange rate (R12-plus to the dollar?) and the resulting sharp uptick in the landed cost of imports of both capital and consumer goods. Indeed rand depreciation would begin the moment it seemed a possibility the ANC might decide to seriously consider such a course, with the poorest taking the biggest hit, followed by an accelerated brain drain that South Africa can ill afford.

It will be interesting to see how the proponents of nationalisation respond to Trewhela's piece. It seems to me that Zuma's economic/finance team needs to reject unequivocally and publicly any possibility of nationalisation being considered not least because of the political consequences for the cohesion of the Alliance in a direct confrontation with nationalisation's advocates.

Otherwise merely a lingering possibility of nationalisation will hang over SA's economic future like a dark cloud and pretty well eliminate any possibility of SA achieving the levels of new capital investment, productivity and GDP growth needed for the ANC to deliver on its ambitious promises of job creation and a better life for the majority of South Africa's population.

So let's hear a response from the SACP, Cosatu and the ANCYL to Paul Trewhela's critique. And hopefully too his warning based on the real life experience of dissenters despatched to the work camps by Joseph Stalin.

George Palmer is a former editor of the Financial Mail

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