South Africa: Land reforms is bringing instability and fear

João Dias

The government won't allow "land grabs," and land redistribution designed to address racial inequities will be orderly, Cyril Ramaphosa, the South African President said a month ago in remarks to Parliament. He also remarked "the acceleration of land redistribution is necessary not only to redress a grave historical injustice, but also to bring more producers into the agricultural sector and to make more land available for cultivation". He added that a program of land redistribution is required to heal the historical "festering wound" of land dispossession and enable the transformation and development.

Mr Ramaphosa defended his proposal announced in July that the Constitution be amended to provide clarity on the circumstances under which land expropriation without compensation could be effected.

In 1999, the ruling African National Congress (ANC) undertook to buy 30 percent of the country's land to distribute to the black community. However, due to suspicions of corruption and large public debt, land redistribution in South Africa was relegated to the sidelines.

Nowadays, the situation isn't better as Ramaphosa faces a mountain of other problems, ranging from a sagging economy, massive unemployment and a long judicial process to eliminate "state capture," the local term for allegations that the Gupta family, who are friends of Zuma, engaged in illicit business with state companies. At the same time, he must lead the ANC into elections next year in the first vote since the opposition won control of several key municipalities, including Johannesburg and the capital, Pretoria, in 2016.

There are major concerns and signs that this land reform process is lightning the fire as several white farmers are considering leaving the country. According to the proposal, white farmers, descendants of Dutch households (Boers) who have owned land for more than 400 years, will have their properties confiscated without receiving any compensation.

According to descendants of white settlers, the country's agricultural production may also fall, causing people to starve.

White farmers guarantee that black farmers do not have the skills to care for the land.

Due to the tension between government and rural producers, countries like Russia and Australia have already stated that they will grant emergency visas to white farmers who do not wish to stay in South Africa.

Although racial animosity and the desire for reparation for past crimes that "stripped blacks of their lands" seem to be what motivates current regime, the fact is that land confiscations are also, from the government's point of view, a good policy.

In fact, what we observe is that South African land confiscations do not differ fundamentally in anything from all other episodes in which the state has confiscated lands, industries, residences and businesses in any other region of the world.

In the last century, Marxist-inspired regimes confiscated lands and agrarian estates based on the idea that the owners were excessively "bourgeois" or enemies of the "revolution." This is also what has been happening in Venezuela in recent years, where companies, land, businesses and industries are being confiscated from the "class traitors".

More importantly, both the motivation alleged by the government and true motivation do not matter when we analyse the effects of any type of land confiscation and expropriation of private property.

Regardless of motivation, state confiscation of property has negative consequences on the economy, which can be disastrous.

Uncertainties about the legal and political status of property can lead to major declines in investment and production. In other words, if property owners do not feel safe and do not know if their property will be respected or confiscated, they will not invest in the property and will not even do routine maintenance. Why invest in something that can be confiscated tomorrow?

Consequently, this scenario leads to the suspension of investments and the destruction of fixed assets due to a lack of investments and maintenance costs.

A broader effect in this case may also be that many of the more experienced, skilled and wealthy residents will leave South Africa, taking all their know-how with them. Therefore, while confiscations may bring some political gains to the party in power - and therefore are positive on the political side - the indelible fact is that such a measure is economically foolish and consequently negative on the economic side.

And last but not least, one should not belittle to the several demonstrations that are occurring in some communities and in political mass party rallies which are promoting black racism, prompting hatred against white farmers and their families. The Media, the United Nations and the European Union seem to be making an accomplice silence.