Dear Julius Malema. I could write him a letter on why I think nationalisation is a bad idea, but his views are completely different from mine, so it would be as much use as him writing to me on why he thinks it is a good idea. Although his views could be of noble intentions, modern day Robin Hood like, take from the rich and give to the poor, that does not fly with me.
Personal issues on him aside, if the state was so good there would not be almost every single parastatal looking for funding every year. I once spoke to a pilot who worked for SAA for many decades (nearly 4) and he said that there was not a single year that they were not almost or technically bankrupt. Old days, new days, government in business just does not mix too well. One needs the funding (business), the other needs the lines in which to work profitably to collect more taxes (government), it can't be both. That is the key you see, the more tax payers, the better your social services can be. And who pays the most taxes? Well, business of course.
The Freedom Charter clearly states the following:
"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."
It is a very simple statement, one that is easy to read for all. However, that was 1955. This is 2010. Gay marriage and abortion are topics that we debate openly now, and have freedoms to choose, even if others beliefs are different. Just saying, don't bury me now chaps. If you are looking for a copy, check out page nine of the following document archived in SA History: Freedom Charter.
Don't get me wrong, but unfortunately for idealist types I side with the practicalities of it all. If for one second that the ANC youth league or the young Communist league believe that the state could do a better job than business, then I fear they are misguided. Completely. Because there are practical examples of state seizures of private assets and how that turned out for the people, and what the consequences are.
We have practical examples around us, Zimbabwe is one. The ultimate demise of the economy and the currency deemed worthless, useless, meant that the honourable Robert Gabriel Mugabe lost economic power. Which is far more important in the long run, in an open society. In the
Kingdom Democratic People's Republic of Korea access to and from North Korea is carefully controlled. It is almost impossible to get in, and to get out as a local, practically impossible.
Venezuela is a much better example. In fact, we have a similar size economy to Hugo Chavez's mini empire. You know, he is so important to the future of the country that he had to have a third term. And that is so sarcastic that you can give me a clip on the ear next time that you see me. I was looking for a timeline on Venezuelan nationalisation, it started not so long ago, 2007. The oil industry, the cement industry, steel mills, various food production facilities and supermarkets because they were seen to be "hoarding and speculating with prices". No Hugo, it is called inflation.
Care what you want about Chavez, here are the facts, this is the Venezuelan inflation rate, something that has been "high" for a long time"
Venezuela is the most likely country to default according to the The CMA Sovereign Risk Monitor.
And tell me, who likes a country as an investment destination if they default? I suspect that in the short to medium term, the Venezuela economy will fall apart. What they do have in their favour is an abundance of oil, which account for around 80 percent of all exports.
And don't take my word, out of 183 countries surveyed, according to Doing Business, Venezuela ranks 177th. It is impossible to get credit. What a surprise. It ranks 177th. Out of protecting investors it ranks 178th. And for paying taxes ranks 182nd, all lower than in previous years. Well done Hugo , you have made it so easy for people to lift their economic levels by providing them with the necessary skills. Moron.
In fact the six countries that are more difficult to do business in, according to the Full economy rankings are set out in the table below, makes for interesting company Hugo, Chad, Congo Brazzaville, the DRC, the Central African Republic, Guinea-Bissau and Soa Tome and Principe. Great company, this was a hack from that table:
Disclosure: Long South African mining stocks.