Find us on Google+

Thursday, 31 May 2012

Dark side of nationalisation?

Ben Phiri recently wrote a piece on the "dark side of nationalisation" which instead of illuminating only served to darken people's intellect. Consider this opening:
One of the most dominant developments in African governments in the last four decades is the issue of nationalisation which has been driven mainly by politics and ideology. This stems from the need to increase local control over economies which, prior to gaining political freedom, were completely dominated by foreign nationals and corporates. Although this looked workable in its initial stages, it later backfired, affecting almost all sectors of the economy. As feared by several economists and technocrats, nationalisation could easily affect macroeconomic goals of economic growth such as employment creation and inflation rate. The other factor is that, should modern African governments pursue nationalisation, then they are headed for economic disaster.

Countries such as South Africa for example, whose political pronouncements by the African National Congress (ANC) Youth League about nationalisation, have had a devastating effect on foreign and local investors. Perhaps this explains why South Africa's Foreign Direct Investments (FDI), according to the United Nations Conference on Trade and Development (UNCTD)'s 2011 investment survey, plummeted by 70 per cent in 2010, about one-sixth of the peak FDI recorded in 2009. This drop has been attributed to uncertainty surrounding the phenomenon of nationalisation. Apart from the loss of FDI, nationalisation can also trigger off the loss of skilled labour supplied by foreign investors as well as the loss of potential export markets.
The assessment is flawed at many levels such that we can be here all day. It suffices to simply say that when we talk of "nationalisation" it is important to be clear what is meant by "nationalisation". In Europe Banks are nationalised and yet people see the "light side of nationalisation" there that came to rescue the "dark side of capitalism". Globally we have nationalisation in every country. Is there a country without nationalisation? What is interesting is that often national companies have excelled. Eurostar owned by the UK and French Government is a successful "nationalised" company. Singapore and Ethiopian airlines are success nationalised companies. The Angolans run successful national mining and oil companies.

No comments:

Post a Comment

All contributors should follow the basic principles of a productive dialogue: communicate their perspective, ask, comment, respond,and share information and knowledge, but do all this with a positive approach.

This is a friendly website. However, if you feel compelled to comment 'anonymously', you are strongly encouraged to state your location / adopt a unique nick name so that other commentators/readers do not confuse your comments with other individuals also commenting anonymously.