Nationalisation of Mines in South Africa - 3122 Words

30 September 201111 Word Count: 2500 Kopano Seopela 608S2360 08 Fall SA Economy: Nationalising South Africa’s Mining Sector Kopano Seopela 608S2360 Luyanda Period 3 (09.25) SA Economy: Nationalising South Africa’s Mining Sector Economics 314 30 September 2011 Abstract The purpose of the essay sets out to look at the concept of nationalisation, research it and discuss whether it is an applicable strategy to implement into South African policy. The importance of the essay is to highlight the future economic outcomes which could incur in South Africa should it be adopted and also look at possible alternative strategies instead of nationalisation. The issue was addressed by making use of lecture notes, unpublished speech addressed,†¦show more content†¦The ANC believed that nationalisation would be the key factor of its economic policy reform. However after much international research, this idea was abandoned due to the overwhelming failures of nationalisation implementations abroad. The call for nationalisation has brought upon frantic debate since its re-emergence in recent times. Many observers agree that nationalisation appears to have few positives attached to it but many negatives to it rendering it as a potential economic failure. Why Is Nationalisation Needed? South Africa is regarded to have one of the world’s most unequal societies. Looking at Gini-Coefficients, â€Å"The dispersion of income and wealth between the rich and the poor is one of the most uneven in the world (Bisekker, 2010).† This means that South Africa is drifting towards perfect inequality. With job creation on a decline, unemployment steadily rising, and inequality gap worsening, the call for nationalisation by Julius Malema (2009) is sought to allow every South African to benefit from mines, which are owned and run by the State government. In nationalising the mining sector in South Africa, the State government believes it would have the capabilities of attracting labour-intensive mining industrialists who will process mineral resources and diversify the South African economy. Advantages of Nationalisation Currently in the post-Apartheid era, South Africa hasn’t achievedShow MoreRelatedMining Industry2024 Words   |  9 Pagesnatural resources which are restricted because of the natural distribution and strict laws and regulations (Energy Business Daily, 2010). Government intervention in the mining industry includes direct and indirect taxes, royalty arrangements, nationalisation and economic empowerment policies, as well as regulatory compliance with environmental and other government standards and business criteria. 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