Handouts do not improve your self-esteem: doing it for yourself does

Nationalisation and land grabs - with or without compensation - are dead-end policies. Nationalisation without compensation will result in sanctions being re-introduced against South Africa by the US and EU, as it will be perceived that their citizens - the ones who have invested here - will have had their assets stolen from them by the South African government. International travel restrictions on members of the Cabinet will probably be applied as well.

Nationalisation with compensation at fair value will mean that a trillion rand will have to be diverted from health, education, welfare and law and order to purchasing the targeted assets. In other words, the opportunity cost will be enormous. The only alternative is for the government to borrow the money - if they can - which will send South Africa's national debt to GDP ratio through the roof.

Land grabs, on the other hand, will in the worst case scenario precipitate a civil war.

Neither being a pariah or highly indebted state in the case of nationalisation nor being a country driven by civil war in the case of land grabs will sort out the problems of unemployment and living on desolation row. The only way the problem can begin to be resolved is to follow the philosophy of Steve Biko, an equally charismatic character, who before he was cruelly murdered in the 1970s basically expressed the view that handouts do not improve your self-esteem: doing it for yourself does.

Government must engage with Business Leadership SA and AgriSA as to how a more inclusive and participative economy can be created and how one can transfer an appropriate proportion of land from white to black farmers without diminishing agricultural productivity. All of this will take time. It cannot happen overnight in one quantum leap.

Selected extracts from article by Clem Sunter.