Free Market Foundation's proposals for land reform make sense
The acrimonious debate on land reform issues in South Africa and the frequent calls from left wing organisations for immediate handovers with little or no compensation have done a great deal to undermine international investment confidence in South Africa, says Bill Rawson, Chairman of the Rawson Property Group.
Rawson, who has in recent years made several trips overseas, says that among the first questions that he is always asked have been those relating to nationalisation and land reform proposals. These, he says, have very definitely given a negative impression of the direction in which South Africa is now moving. In recent talks, however, says Rawson, he has had the big advantage of being able to refer to a publication by Leon Louw, Executive Director of the Free Market Foundation.
“Mr Louw,” says Rawson, “has pointed out that although currently all the discussion on land reform tends to centre on the handover of agricultural land, the focus could and should at this stage be transferred to other sectors. The Free Market Foundation has suggested that as an initial step the vast number of urban and peri-urban black-occupied council-owned properties should be converted to full ownership, free of charge.”
This radical privatisation step, first taken by the Thatcher government in the UK and later adopted by many countries worldwide, would, says Rawson, in a relatively short space of time add many billions of Rands wealth to the disadvantaged members of our society and would empower them as never before.
“It would,” he says, “as Louw has pointed out, also be seen by those previously disadvantaged as real compensation for the harm done to them under the apartheid era and it would go a long way in redressing economic imbalances in our country.
“In addition, it would ease the financial burden on municipalities presently tasked with maintaining these buildings and enable them to initiate new pay-as-you-go schemes for all services, thereby at last reducing the enormous backlogs which have put the majority of municipalities into serious debt.”
Rawson also points out that the government is ‘sitting on’ vast tracts of little or inefficiently used land in both rural and peri-urban areas. They have proposed, again as a compensatory measure, that this land should be allocated to landless people. Potential rural landowners could receive 5 ha smallholdings per family, while in the urban areas 200 m2 would probably be sufficient to enable a starter home to be erected. In both cases, says Rawson, he agrees with Louw that full legal title should be given immediately and no bars placed on selling the land if the owner so wishes.
Similarly, says Rawson, the Foundation has suggested that the clauses preventing recipients of RDP homes from selling their homes for seven years should now be removed, thereby opening up the market again to black landlords and other buyers who may have cash but who are not otherwise entitled to an RDP home. The Foundation, he says, has shown that the restrictive clauses often prevent owners leaving to look for work in other areas.
Moves such as these, says Rawson, would take a lot of pressure off the government and would encourage international investors who would see us as moving in the right direction.
“Although the redistribution of agricultural land will inevitably remain on the agenda,” says Rawson, “we have to recognize that well-meant state sponsored initiatives in this field have often resulted in the reversion of farmland, previously successfully farmed on a commercial basis, to subsistence farming from which only the owner and in some cases no one in the end benefited. Although subsistence farming is often the backbone of many African countries, the numbers of people it can support are always fairly limited.”
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Article by: www.rawson.co.za