ANC rethinks nationalization of South African firms Mandela fears harm to investment, jobs

February 22, 1991|By Jerelyn Eddings | Jerelyn Eddings,Johannesburg Bureau of The Sun

JOHANNESBURG, South Africa -- After decades of supporting the concept of nationalizing key industries to redistribute wealth in South Africa, the African National Congress is rethinking its position.

In a document circulating among ANC members, economists for the powerful anti-apartheid organization argue that seizing private companies could pose serious risks for the South African economy at a time when it should be creating jobs and generating wealth.

The document is the first major sign that Nelson Mandela's political organization is reassessing its long-held belief that state ownership of key industries is the solution to inequities between the country's mainly wealthy white minority and its impoverished black majority.

It said seizure of private assets could scare off foreign investors, cause skilled whites to leave the country and put the new South Africa deep in debt.

"We need to look more carefully at the economic reality and begin to find a more overall policy that will begin to solve our problems," said the economic policy paper, excerpts of which are contained in the current issue of the ANC journal Mayibuye.

The document did not reject nationalization altogether. It argued that there were both advantages and disadvantages to the hTC policy, which is vehemently opposed by business people who fear that an ANC-led government could lead South Africa down the road to communism and economic collapse.

Analysts said, however, that the economic policy paper showed a new willingness by the ANC to discuss the serious disadvantages of state seizure of property.

It "displayed a realization by ANC thinkers that there's little point in winning the political kingdom if it doesn't come accompanied by a vibrant economy," Business Day newspaper said in an editorial today.

But the newspaper said those thinkers might have trouble convincing ANC activists that one of their longest-held policies is a "dead-end street."

In recent months, ANC thinkers also sought to argue the disadvantages of a policy supporting the continued imposition of economic sanctions against South Africa. But their arguments were soundly rejected by the rank and file at an ANC conference in December, and the organization maintains its old position.

The ANC embraced nationalization in its 1955 Freedom Charter, which stated the group's goals and policies. Mr. Mandela embraced the idea anew when he was released from prison a year ago, sending tremors through South Africa's business community.

But Mr. Mandela gradually has been toning down his position, saying the ANC was willing to consider other means of closing the economic gap created by decades of government-mandated racial discrimination.

In a speech last week, he spoke of the need for foreign investment to generate growth in the economy. "Both the domestic and foreign investor need to be reassured about the permanence of peace and stability, as well as the prospect of a thriving economy," he said.

The ANC paper said that nationalizing industries could ensure the "democratization of the economy" but would not give the government the means to provide everyone with jobs, houses and education.

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