Following on from Clem Sunter’s article posted at the end of last week about redirecting the passionate rhetoric of Julius Malema I want to publish Sunter’s second article entitled ‘New Deal or No Deal’. The jist of the article is that South Africa needs a new deal to launch itself ‘onto the growth path of becoming a winning nation; or no deal plunging the nation into civil war’. Much like the function of Codesa facilitating a new political democracy for South Africa in the early 1990’s, this new deal needs to do the same for economic democracy in this country.
Sunter proposes seven key areas that he believes need to be on the agenda and which I have quoted directly below:
1. Nationalisation: It is hoped that, by mutual consent, the policy of nationalisation of entire industries is abandoned as a desirable option; but the role of state owned enterprises is clarified. The possibility of employee share ownership schemes is examined to give workers a stake in the mineral wealth and means of production of the country.
2. Land ownership: The issue of vacant farm land is discussed as is the current failure of the willing buyer-willing seller scheme. Alternatives to improve the prospects of emerging black farmers are identified as well as a ladder to climb from small-scale farming to large-scale agri-businesses going downstream in the food chain. Ways that the big food retail chains can encourage farming enterprises to be established and grow their profitability by becoming part of the supply chain are investigated. Realistic targets on transfer of land from white to black farmers are set. Employee share ownership schemes are examined for the same reason as in mining.
3. Beneficiation and general rules of investment: Ways of adding value to both mineral and agricultural products before they are exported are debated as are the rules generally for investing in industry in the country. The objective is to remove policy uncertainty which is having an adverse impact on foreign direct investment and local investment.
4. Capital ownership: The strengths and weaknesses of the current BEE programmes are evaluated in terms of changing the ownership of existing capital. The role of banks, the JSE, the possible local stock exchanges, venture capital companies, stokvels and government guaranteed loan schemes is debated as a means of providing new capital for enterprise development.
5. Public private partnerships: This area has unbelievable potential in improving service delivery in areas like infrastructure including independent power sources, railways and ports. Equally in health, housing and education there have to be many possibilities that can be captured in discussion.
6. Economic Freedom: This is a critical item on the agenda and covers a whole range of issues comprising technical and entrepreneurial training; tax incentives to get companies to hire young people and train them; tax holidays and simplified labour legislation for small business; changes in company scorecards to promote stronger relationships between big and small business; the extension of the cellphone to become an electronic wallet and portable IT system for small business; and the possibility of introducing basic income grants and local energy transfer systems (bartering of services and goods) in rural communities. Worker co-operatives as a way of empowering labour forces should also be covered – John Lewis in the UK being a remarkable example.
7. Environmental sustainability: No agenda is complete without discussing the impact of business on the environment, carbon taxes, green industries, water shortages and desertification: A balance between economic development and environmental sustainability is central to any long-term economic plan.
What do you think of these seven points for economic democracy? Do you feel that he has left any out or would you add further points onto this? If so, what would they be? Leave your thoughts in the comments section below.
