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South Africa accelerates privatisation moves

Peter Limb comments on a Reuters news item
13 June 1996

CAPE TOWN, June 12 (Reuter) - The South African government has invited labour representatives into a series of cabinet committees mapping privatisation plans for release in August, Minister of Public Enterprises Stella Sigcau said on Wednesday.

Sigcau told reporters in Cape Town that Friday's release of a macro-economic framework for growth and development - the government's first comprehensive economic policy package - would accelerate moves towards privatisation.

Warning that further delays could see opportunities wasted, she said she expected the first major privatisation announcement before the end of the year.

Economists and business leaders believe privatisation is central to restoring investor confidence, which was badly dented by the rand's sharp fall in the last three months.

Sigcau said a six-a-side committee of government and unions met on Sunday to work out how to finalise the restructuring and possible privatisation of state-owned facilities including telecommunications and transport.

"Apart from the general task teams that we have had all along, we decided we would have in each area a sub-committee of ministers and that in order to facilitate the process we could have a third person coming from labour," she told reporters in Cape own.

She said she and the relevant minister would comprise the government element of committees on communications, transport, minerals and energy, trade and industry including defence, water and forestry and some miscellaneous issues.

"We are hoping that between now and August we will have covered a lot of ground to say: 'This is what the Deputy President (Thabo Mbeki) must finally announce," she said.

Mbeki announced far-reaching plans last December to partially or entirely sell off state-owned assets ranging from under-utilised buildings to a stake in the Telkom telecommunications corporation.

The plans were derailed by labour protests which resulted in a National Framework Agreement giving unions a voice in the future of state assets.

President Nelson Mandela ran into flak during a visit last month to Germany over apparently mixed signals on privatisation and delegates to a World Economic Forum meeting in Cape Town complained that the government was indecisive on the issue.

But Mandela unlocked the debate when he said in Germany and on his return: "Privatisation is the fundamental policy of the ANC and it will be implemented."

Sigcau denied that there had been any uncertainty about privatisation, adding:

"The uncertainty was: Can you restructure when there are no formulated policies, when there is no enunciated economic plan for the government?

"The unfolding policies, the statement (on Friday) will really unlock areas of uncertainty," she said.

"We must never ever keep an entity which is moving back. No matter what we say, if Telkom does not move we are going to miss out on a number of opportunities," she said.

Sigcau said the government would have to draft legislation to create regulatory mechanisms for restructured state corporations.

Re: ANC & privatization

By Peter Limb

This all really points to the lack of an effective ALTERNATIVE program being advanced by the left - or rather that such a program has not been adopted by govt. What do others feel?

This is nothing new, of course, as social democratic govts all around the world have been doing the same thing for a number of years. but who benefits from privatisiation? the ability to generate public sector profits year after year is lost.

How many more years must this privatization process continue before the logical question arises: re-nationalization. Is this going to be a circular process, as in Britain, with privatization and re-nationalization of profitable/unprofitable sectors, or is this really the end of history??

Peter Limb
University of Western AustraliaPeter Limb
Nedlands, 6907, W.A. AUSTRALIA

email: plimb@library.uwa.edu.auPeter Limb