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| Columns |
| Economic and Business Forum |
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by
DD Phiri, 10 February 2006
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06:10:17
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Property and privatisation
A French philosopher Pierre Joseph Proudhon (1809-65) wrote a book with the title “What is property.” He answered his own question: “property is theft.”
Karl Marx is believed to have read this book and gone ahead to devise a system in which there would be only communal not private ownership of the means of production. This is the historic communist system.
Proudhon was wrong to categorise all property as theft. Only that property, which is obtained through corruption, sharp practice and robbery, deserves to be denounced as theft.
Property ownership is part of human rights. Property is life-support. If you own nothing, you cannot have a pleasant life. We all feel good when we see our account in the bank getting a bit bigger and feel uneasy when it starts dwindling again. To own a house free of encumbrances makes life easier.
A person who toils for someone is entitled to a reward called wages. If he gets nothing for his labour, then he is a slave. Slavery and servitude are unnatural conditions of life. Similarly, a person who has worked hard in his business and made a tidy profit should have his or her rights to it respected.
But whoever has property often also has the power to influence the lives of other people. Where property is concentrated in a few hands, there will be an oligarchy instead of democracy.
People have levels of influence on governments according to their wealth; at least this is what communists believe.
In most countries that now boast of being old democracies, the franchise was at first limited to those who owned land or had business. Even in this country, the first general election voters had to prove they were property owners.
There is resistance in this country to privatisation of utilities like Water Boards and parastatals like Agricultural Development and Marketing Corporation (Admarc) because people feel that when these organisations are privately owned, they (the organisations) might be more interested in maximising profits than social welfare.
It is not enough that capital investment is taking place. We must know who is to benefit from it. Those who are constantly urging the Malawi Government to privatise utilities and Admarc should not dismiss public fears as groundless. No government the world over has abdicated all responsibility of managing key industries.
Major corporations may influence governments in different ways, but mostly they contribute funds to ruling political parties or parties that are likely to win the next election. They also contribute funds to charities preferred by those in office. In turn, these corporations are awarded government contracts.
Managing Directors of major companies are usually members of the ruling elite. Some serve as members of government, others exert their influence behind the scenes.
It is often noticed that the public exercise their political rights only when they go to cast their votes. Once the elections are over, it is the elite that actually influence decision-making in official circles.
When foreign shareholders, such as a multinationals, control a privatised company the foreigners are likely to have some influence on the politics of a country. Hence when privatising key industries, the nationality of the buyer is a factor worthy of consideration. Even the prophetess of privatisation, Dame Margaret Thatcher, when she was Britain’s Prime Minister, had to veto the sale of a certain firm to an American bidder. She wanted it to be bought by a British national.
Is privatisation the only possible solution of water boards problems? The public is entitled to know how these problems came about. If the Blantyre Water Board fails to provide a steady flow of water because the level of water in the Mudi dam falls, how will the private owner ensure that the level will never fall?
There is a case for privatising certain firms or industries, but not all. When certain public corporations are not functioning with optimum efficiency, an external investigator should report on them and suggest remedies. People want to own some of the property that is in the country, directly or indirectly.
Malawi is not a welfare state as yet. When people lose jobs, they do not go to the state for financial assistance. The level of wealth and development in Malawi cannot support anything like a welfare state at present. But people are entitled to water at subsidised prices. If the state is unwilling to render such a services then its raison d’etre is in question.
In the Global Business Press of the Weekly Telegraph dated January 25-31, 2006, we read, “Malaysia is a cost competitive and business friendly location with attractive tax policies, liberal ownership laws and a welcoming attitude towards expatriates. Many of the world’s best-known brands including Intel, Panasonic, Motorola, BAS, Dell, Hewlett Packard and Nestle are already made in Malaysia. Home grown success stories include Petronas, Proton, Royal Selangor and Sine Tyres.”
What we notice from the above advert is that Malaysia has developed with the help of foreign multinationals but that Malaysians themselves have built successful brands. The development of a country is facilitated by partnership between foreign and local capitalists.
To get in foreign capital, you have to offer attractions. Everything worth having has a price tag attached to it. However, one must know the cost of all bargains and treaties.
During the British imperial days, there was a colony in the West Indies known as BG, in brief. The letters stood for British Guiana. But some people quipped and said BG stood for Bookers Group just because the conglomerate called Bookers Group, which once upon a time owned Kandodo in this country, dominated the economy of British Guiana.
We must be sure one foreign firm, or investors from one country do not dominate the economy in order to safeguard its politics and sovereignty. The economically dominant becomes the politically dominant.
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