Miss
[pic]1) Introduction
The feasibility of a nationalized mining sector is a debated topic in South Africa at the moment. Most studies and the general opinion suggests however that it is not a good idea and not feasible, especially in a country of our economic and social state. It has been argued that revenues from the mining sector will advance several social and economic projects, including resource redistribution, transformation and job creation.
This essay will argue that mine nationalisation is not part of a practical economic policy. Firstly, the concept of nationalisation will be introduced in terms of the difficulties to which it gives rise. Thereafter, local arguments for nationalisation will be evaluated, followed by case studies of both the South African and international experience of nationalised mines. Finally, South Africa’s stated macroeconomic objectives, the current state of the mining sector, and its estimated growth trajectory will be examined vis-à-vis the probable outcomes of mine nationalisation. In conclusion, alternative policy options to further the country’s national economic goals will be explored in terms of the existing mining sector. 2) The case for nationalization
2.1) Nationalization and its implications
Nationalization happens when the state gains control of an industry, a business, or any Privately, owned property and then turns it into a public mass ownership. This however often leads to companies underperforming as their productivity, service quality and profitability drop (Grant, 2011:62). However debatable, this could be contributed to the loss of incentive to succeed in the workplace.
Private companies have a responsibility to their share holders and they are held accountable if issues should arise (Joseph, 2010:146).
This system, even if found within nationalized enterprises, often does not work. The state and thereby the taxpayers, who maintain permanent majority ownership of a company will most likely have the
The feasibility of a nationalized mining sector is a debated topic in South Africa at the moment. Most studies and the general opinion suggests however that it is not a good idea and not feasible, especially in a country of our economic and social state. It has been argued that revenues from the mining sector will advance several social and economic projects, including resource redistribution, transformation and job creation.
This essay will argue that mine nationalisation is not part of a practical economic policy. Firstly, the concept of nationalisation will be introduced in terms of the difficulties to which it gives rise. Thereafter, local arguments for nationalisation will be evaluated, followed by case studies of both the South African and international experience of nationalised mines. Finally, South Africa’s stated macroeconomic objectives, the current state of the mining sector, and its estimated growth trajectory will be examined vis-à-vis the probable outcomes of mine nationalisation. In conclusion, alternative policy options to further the country’s national economic goals will be explored in terms of the existing mining sector. 2) The case for nationalization
2.1) Nationalization and its implications
Nationalization happens when the state gains control of an industry, a business, or any Privately, owned property and then turns it into a public mass ownership. This however often leads to companies underperforming as their productivity, service quality and profitability drop (Grant, 2011:62). However debatable, this could be contributed to the loss of incentive to succeed in the workplace.
Private companies have a responsibility to their share holders and they are held accountable if issues should arise (Joseph, 2010:146).
This system, even if found within nationalized enterprises, often does not work. The state and thereby the taxpayers, who maintain permanent majority ownership of a company will most likely have the