Nkosazana Dlamini-Zuma argues that it is unacceptable that the white minority controls the economy. But what are the facts? The government is part of the economy. Government spending constitutes 30% of GDP. Besides the government itself, hundreds of state-owned enterprises (SOEs) constitute another 20% of the economy.
The private business sector, therefore, comprises only half of our economy. That half is not entirely white-controlled. By dint of the application of black economic empowerment rules, we are well on the way to 25% of each leading private company becoming black-owned and -controlled. It should be clear, therefore, that more than 50% of the economy is already black-controlled. That it may not suit certain politicians to admit this cannot change the facts.
What would happen if there were to be a radical and immediate introduction of state control of the private sector? It is reasonable to assume that any nationalised companies would go the same way as the SOEs.
Many are being carried by the private sector, which is by far the most efficient component of our economy. If this productive sector were to be nationalised, government revenue would start to dry up. Who would pay public servants and social grants?
There is a misconception among populist politicians that the economy is an asset that can readily be transferred from whites to blacks. This is not so. The economy is essentially an activity. It has three components. The first and most visible component comprises buildings, land and equipment.
The second and often most crucial component comprises know-how and entrepreneurial talent. The third comprises access to capital for investment and growth.
Capital is internationally mobile and amounts to trillions of dollars. It is constantly seeking the best return anywhere in the world. It is absurd to ascribe colour to it.
As a developing country, we are dependent on local and foreign capital. If we do commence nationalisation without payment (we cannot afford to pay), capital will dry up and SA will be on the path to collapse.
Willem CronjeVia e-mail