DOWNLOAD Nationalisation case studies: Lessons for South Africa - 699 KB

Many governments throughout the course of history have sought to increase the role of the state by nationalising targeted productive sectors of their economies with a view to addressing certain political objectives. For example, beginning around the mid 18th century, large advanced economies such as the United States, the United Kingdom and Japan engaged in some form of nationalisation. The sector the aforementioned countries targeted initially was the railways but subsequent attempts at nationalisation in these and other countries at various times involved such sectors as mining and banking.

The proposal by the African National Congress Youth League (ANCYL) to nationalise certain key sectors within the South African economy is based on a motivation to address the inequalities created by the previous dispensation. The idea is that, once key strategic areas are in the hands of the state, the government will be in a position to more adequately address such social inequities.

The African National Congress (ANC) took note of this proposal by its youth division and dispatched a team of researchers to investigate a sample of 12 countries where nationalisation has taken place, namely, Chile, Norway, Sweden, Finland, Zambia, Brazil, Venezuela, Namibia, Botswana, Malaysia, China and Australia. One of the ANC government‘s alliance partners, the Congress of South African Trade Unions (COSATU), has also called for the nationalisation of key sectors, and has suggested that, in addition to the 12 aforementioned countries, the ANC should also examine the effects of nationalisation in Korea, Taiwan, Singapore, France and Scandinavia, since these countries ―all rose on the basis of strong state ownership of strategic sectors".
In this paper we analyse the countries selected by the ANC and COSATU to determine whether nationalisation occurred in these countries, and if it did, to what extent. We also examine the sectors that were targeted and what the impact of nationalisation was on these countries‘ economies. Finally, we suggest alternatives to nationalisation.

Report published by the Free Market Foundation