Scrap socialism for growth
There are three separate problems in government, not only corruption – 1 corruption, 2 waste, and 3 socialism.
The western governments who sent President Cyril Ramaphosa an “open letter” were only talking of corruption.
Waste is a separate issue and comes from appointing unqualified people who make the wrong decisions and have poor managerial skills, which costs the taxpayer more billions.
Even more billions are lost through socialism, which comes in many forms.
Very high tax is one of them. Threats of expropriation without compensation is another.
High taxation is a disincentive for people to work, innovate and invest.
This has been the problem in mining where black economic empowerment is an additional tax which goes to a few selected family and cronies of the ANC.
The social grant system is also a form of socialism.
It is a bribe to bribe the poor to give the ANC the vote so they can appoint their family and cronies to get free shares in mining companies.
The poor gain free grants but lose permanent jobs earning a real income which could be four times larger than the social grants, not an equitable bargain.
The loss of 400,000 mining jobs under ANC rule attests to this debilitating form of socialism.
Same thing happened to Venezuela’s oil industry.
The socialists under Hugo Chavez nationalised their oil industry, and now their oil industry is under-performing purely because of lack of capital investment.
If you don’t pay capital a share of the profits, capital will not come. It will go elsewhere.
Both SA’s and Venezuela’s mining industries have been ravaged by the evils of socialism, and the poor suffer.
Ironically, the poor are better off under a regime where capital is paid a share of the profits compared to a system where capital is nationalised.
Very few will invest while we still have 26% B-BBEE in mining – other countries are offering much better tax regimes.
President Ramaphosa should scrap socialism, AA, BBBEE and put South Africa on an 8% growth path.
This is the only way forward. As wealth trickles down, poor blacks will be its biggest beneficiaries.
Naushad Omar, Athlone, Cape Town