News24 reports that President Cyril Ramaphosa says that government will not allow “land grabs and anarchy” to be a part of the process of land redistribution.
Ramaphosa was speaking at a conference of South African Breweries (SAB) and AB InBev Africa investors. These investors had expressed interests in the government’s plan to attract $100m worth of foreign direct investment over the next five years.
Ramaphosa told the investors that inspite of the bloodless revolution of 1994, the economy still remains in the hands of the minority, and the land issue is not resolved.
He expressed confidence that once the land issue was resolved the economy would take off.
There are a few things here that struck me. First off, if you’re not going to allow land grabs and anarchy – why hasn’t there been serious action taken against the EFF when it encouraged land invasions? I mean you can say you’re not going to allow it, but what are you doing about it?
The second issue through is – there is a bit of a contradiction between having a plan to attract foreign investment, and complaining about how the economy remains in the hands of a minority.
Shares are capital, so when foreign companies or individuals buy into our country they are in fact buying up or creating some of the means of production and distribution.
This isn’t necessarily a bad thing per se, this can mean that we get access to skills that we wouldn’t otherwise, but whenever anybody invests in anything it is with the hope that they get more out than they put in.
When we talk about foreign direct investment, there is a natural tension between that and the whole transformation agenda – in that you are saying in one breath that you want a greater share of the economy to be in local black hands, but you’re selling it off to, just for example, Wall Street or the London Stock Exchange.
Research has shown that South Africa’s economy has become less diverse since 1994, in part due to the fact that large multinational concerns have become more dominant over time.
When we talk about the land issue, one of the big problems has been that farming has gone through this same general trend towards consolidation. More land is going into the hands of fewer corporations.
On a global level there is a major issue with how capitalism is slowly degenerating into a sort of oligarchic feudal situation wherein the eight richest people in the world, own about as much as the bottom 50%.
The natural inclination of a capitalist system is that those who have money can spend the money to get more money. We’re not just dealing with local income inequality here – but global financial inequality that has direct implications if we’re encouraging foreign ownership of South African assets – which is what foreign direct investment is.
Again, that is not necessarily a bad thing but there has to be a choice made – is our policy centred around globalisation or addressing local inequalities? To some extent you have to pick one.
- Picture courtesy of GCIS via Flickr.