Land latest in effort to extend reach of state - Daily Dispatch

17 August 2018 - EWC needs to be understood as something whose impact will go far beyond land and agrarian reform.

Terence Corrigan

The current drive by South Africa’s ruling party and government towards a policy of expropriation without compensation (EWC) has been much discussed, but too often little understood. The implications of what is unfolding are severe and far-reaching. They must be understood for what they are – and for how they have arisen.

Land politics in South Africa exists in the shadow of Zimbabwe’s chaotic and often violent experience, and all the more so at this time, as the latter country has just undergone a tumultuous election. And it is against this background that a number of commentators – such as Adriaan Basson and Mondli Makhanya – have warned that South Africa is making mistakes that push it down the same road as Zimbabwe. A widely cited editorial in the Wall Street Journal made much the same point.

Meanwhile, others – such as Bloomberg columnist Leonid Bershinsky – argue that South Africa is not Zimbabwe, and give at least some credence to government’s promises that there will be no lawless land grabs.

President Ramaphosa’s announcement that his party would drive a constitutional amendment to facilitate EWC certainly raises some very legitimate questions about the direction in which the country is heading. For it is no small matter to commit to amending the constitution in pursuit of a policy goal. It is even larger when the provisions in question are in the Bill of Rights and the failings of the policy are unconnected to it. This is precisely the case here.

President Ramaphosa has repeatedly claimed that South Africa will undertake EWC in an orderly manner, and within the law. There will be no replay of Zimbabwe.

This is a matter of perspective. Central to Zimbabwe’s rapid decline was indeed the breakdown of the rule of law. The willingness to manipulate the constitution might suggest that South Africa’s government intends to undertake EWC within a constitutional and legal framework – although one that it seems intent on tailoring to its needs. (News reports now suggest that the ANC hopes to reopen the process of written submissions to parliament on the issue in order to ensure that the public voice reflects what it wants to hear.)

A sceptical observer might remark that this is a very creative interpretation of the rule of law. Indeed, that same observer might also note that any process undertaken with pre-determined outcomes – and which has been informed by ideological certainties, has appealed to racial solidarity, and has drawn on a long process of stigmatising key stakeholders (in this case, typically white commercial farmers) – might well not be susceptible to control. There is no guarantee that South Africa’s institutions, and the rule of law, will withstand these dynamics. Voices have already been raised linking land invasions to the promises made around EWC.  

And in all this, there are echoes of Zimbabwe.

That being said, the real lesson of Zimbabwe may be a far more obvious one: where policies or actions undermine the environment for economic activity, economic activity suffers.

This is a truism independent of the background and objectives that supposedly animate such politics. World Bank researchers put it some years ago that ‘although redistributive policies have the potential to benefit the poor both directly and indirectly, they will do so only if redistribution does not jeopardise investment – this may be one explanation for the observation that, in the past, redistributive policies such as land reform have often failed to help the poor.’

So, when writers (such as Bershinsky) suggest that the real issue is the scale of poverty and inequality in South Africa, they allude to a truth, but fail to understand its consequences. The disruption that a move on property rights will cause to South Africa will be felt well beyond the country’s farm gates.

EWC needs to be understood as something whose impact will go far beyond land and agrarian reform. This is merely the idiom within which it has been expressed. The constitutional provision that is being targeted – Section 25 – deals with all property. As emotional and resonant with history as land is, it is far from the only resource that might attract the attention of policy makers. It is certainly not the most attractive.

This is already on the cards: over the past decade, there have been literally dozens of pushes in policy, law and regulation which have sought to restrict property rights and expand the reach and discretion of the state. These were by no means limited to land, targeting mining, intellectual property and the security industry among others.

All of this will be a message to skittish investors, local and foreign, that – at best – South Africa should be regarded with a wait-and-see posture. Others have probably already decided that the country is uninvestable.

Expropriating without compensation could thus prove very costly indeed. And no one will pay this price more harshly that South Africa’s poor and unemployed for whom the consequence will be their continued exclusion from the economic mainstream and the shrinking of the already meagre prospects for upliftment. Perhaps not the intended outcome, but a predictable one.

There are multiple paths to penury. South Africa seems distressingly set on one of its own. Whether or not it is Zimbabwe, what its leaders have chosen to set in motion stands to have distinctly Zimbabwean consequences.

Terence Corrigan is a project manager at the Institute of Race Relations (IRR), a think tank that promotes political and economic freedom. If you agree with what you have just read then click here or SMS your name to 32823.