Privatisation is dead--official: after a fierce internal battle within the ANC alliance, the trade unions and the communist party appear to have won the first round and forced the government to abandon, at least for the time, its privatisation plans. Tom Nevin explains.

Author:Nevin, Tom
Position:South Africa

Privatisation in South Africa is officially dead, at least for the rest of this year. Incoming public enterprises minister, Alec Erwin, finally squashed speculation about the fate of the country's much-vaunted sale of state assets by confirming that privatisation has been placed on the back burner.

"Instead," announced Erwin, "we will concentrate on concessions, joint ventures and public-private partnerships."

The purpose of the partnerships is to achieve higher levels of investment, overall system efficiency for the economy, improved technical capacity and management of public assets, enhanced human resource and better customer service.

As a compromise, it's probably the best the government can do to quieten the increasing ruckus coming from the labour movement, and paper over the cracks in the ruling tripartite alliance between then ANC, unions and the communists.

The South African government is in the enviable position, in developing country terms, that it does not have to risk offending first world funder nations if it independently rethinks its economic structuring. Having embarked upon a determined path six years ago to sell off its assets to the private sector, the government has made a U-turn and taken the "for sale" tag off major state enterprises and brought them back under direct government control.

The government insists that the fundamentals remain, but that the emphasis will now swing, in public-private partnerships, to the efficiency of public enterprises, delivering more streamlined service and, in the process, make them more valuable when they eventually come under the hammer, although that is unlikely to happen for another five to six years.


The first serious indications that Pretoria was having second thoughts on its privatisation strategy happened in the run-up to April's general election, and was seen as throwing a bone to its tripartite labour and communist governing partners, both of whom are bitterly and vociferously opposed to those measures, especially privatisation, that they see as job-bleeding capitalist machinations.

The sale of the country's assets to the private sector has been a bitter bone of inter-partner contention, and more than once threatened to split the alliance. The African National Congress (ANC) is the coalition's senior partner and pro-privatisation, while junior members SACP (the South African Communist Party) and Cosatu (the Confederation of South African Trade Unions)...

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