Property rights: What happens next? - Moneyweb

13 May 2019 - While many have pointed to the heightened pressure for results under which the ANC will be embarking on its new term of office, it is committed to a course of action that stands to make it near-impossible to deliver on the economic growth, jobs and rising living standards that would be transformative to the lives of South Africa’s poor.

Terence Corrigan

With the election out of the way, analysts and commentators are now fixing their attention on ‘what happens next’. A recent piece on Moneyweb by Kim Harrisberg of the Thomson Reuters Foundation, does just this, using precisely these words ‘Private property rights: What happens next?’

Her specific concern, appropriately, is the future of private property rights. For the past 18 months, no issue has occupied quite the sustained prominence in the country’s politics as the drive by the ruling African National Congress (ANC), the government it leads, and a number of other political interests – notably the Economic Freedom Fighters (EFF) – to introduce a regime of expropriation without compensation (EWC), ostensibly to rectify the deficiencies in land reform.

The attempt to degrade property protections is without question one of the most important developments since the founding of democracy. It has come to entail a commitment to meddling with the Bill of Rights, the first such proposal since the adoption of the constitution and something which even President Cyril Ramaphosa has conceded is unnecessary for EWC. The precedent this would set – that the constitution is fair game in a political dispute – is a troubling one.

And weakening security of ownership over assets will have material consequences. Little so clearly disincentives investment as the fear of having assets seized. There is certainly evidence to suggest that the discussion of so doing has already cost the country dearly – Azar Jammine remarked that it effectively destroyed the opportunity for a ‘Ramaphoria’ windfall. An assault on private ownership stands to do incalculable damage to the country’s future prospects.

In a country where unemployment – officially and conservatively – hovers around 27%, the implications of undermining further the country’s chances for growth is disturbing indeed.

There is, in other words, an enormous amount at stake for the country in this issue.
So it is noteworthy that despite the role that EWC has played in South Africa’s politics, it was a relatively subdued element in parties’ election campaigns. Even the EFF, whose brand has become intricately linked with the demand for land confiscation resorted to an odd hybrid on its posters: ‘Our land and jobs now.’ The reason for this is actually quite simple: there is little evidence that land reform – at least in the agrarian sense – is a priority for most South Africans.

It shows in polling: surveys conducted by the Institute of Race Relations in the months leading up to the election showed that ‘land reform’ was identified as a priority by no more than 3 to 5% of respondents. It emerged as one of the least required actions in improving people’s lives. Other polling outfits, such as Ipsos and Afrobarometer, have shown similar results over the years.

Former president Thabo Mbeki recently told journalists that the government had not accorded land reform much priority because all available indications were that it was not much a priority to the public.

Over the past 18 months what has happened is less a mounting impatience with the failure to redistribute actual land, than an elevation of its political significance.

If it was of limited practical interest to ordinary people, it was deeply ideologically important to much of the country’s political class. The ‘land question’ – certainly, rooted in great injustices – became a conductor for angry politics. It plays well with a Manichean view of the world, and has frequently been yoked to racial nationalism.

Ironically, this is a politics that has shouldered real solutions to the failings of land reform out of the way. Its goal is to sustain a narrative, not to seek improvements. Harrisberg’s piece (probably unwittingly) plays into one of its central tropes – that land ownership remains unchanged since the end of apartheid, almost entirely in white hands. Hence, she asserts that ‘72% of agricultural land is owned by white South Africans who make up 10% of the population, according to a government land audit’.

Yet the land audit made no such claim. It said that of the country’s land owned by individuals and registered at the deeds office, 72% was owned by white people. But land owned on these terms amounts to less than a third of the country. Most land which black people own or to which they have access is owned by companies or trusts (including most land transferred to new owners under land reform initiatives), or by the state. The latter encompasses the erstwhile homelands, effectively state-owned properties which the state has shown little interest in transferring to those living and working on them.

Inaccurate though it is, it is not surprising that Harrisberg made this claim. It merely restates what numerous senior figures in government have previously said. Yet such distortions – paired sometimes with vicious stigmatisation of farmers and a careful avoidance of the mishandling of land reform – serve to make the rudiments of a case for government intrusion into private property.

The implications of this are both profound and disturbing. There is scant clarity as to what happens next with property rights. There is some indication that the government is contemplating a mass custodial taking of land, along the lines of mineral and water rights. Private ownership in land would thus cease. Alternately, the powers of government to seize land might be extended. And if property rights are to be abridged, it is unlikely that the impact will be limited to land. Indeed, the so-called ‘property clause’ in the Constitution, which is slated for amendment, deals with all forms of property, and not just land.

Given the manifest weakness of, and numerous pathologies within, the state (so much a part of the news over the past decade), none of these options is reassuring.

And therein lies the great irony. For while many have pointed to the heightened pressure for results under which the ANC will be embarking on its new term of office, it is committed to a course of action that stands to make it near-impossible to deliver on the economic growth, jobs and rising living standards that would be transformative to the lives of South Africa’s poor.

What happens next? That will depend on whether policy is motivated by ideology or by pragmatism.

Terence Corrigan is a project manager at the Institute of Race Relations.