Property Rights for ALL South Africans
Issued by the FW de Klerk Foundation, on 19/07/2023
Karl Marx said that the definition of communism is very simple: it is the abolition of private property. The ANC, in its Strategy and Tactics document, says that property ownership and relations are at the centre of all social systems. Many other commentators have held that one cannot have a free and successful society without property rights.
On Friday, 14 July, the FW de Klerk Foundation, supported by the Konrad Adenauer Foundation (KAS), hosted a conference on the topic of property rights at the Bryanston Country Club in Johannesburg. The event was also live-streamed and recorded – not only to expand its audience, but also to provide a valuable reference work for the future.
Part 1 of the conference looked at ways and means of extending property rights to all South Africans, while the afternoon’s session focused on ways of defending these rights, particularly in light of the threat posed by the Expropriation Bill, which is about to be signed into law.
Chris Endres, project manager for KAS in Cape Town, opened the day by sharing his insights from a German perspective.
“It is clear that property rights underpinned the social market economy, which transformed the German economy and society after the second world war – and is the reason why Germany is seen as a role model for prosperity, social stability and economic success,” he began.
He went on to explain that:
“Certainty of ownership is, in our view, an important component of human dignity in and of itself. It encourages us to work and invest in the just expectation that we will earn the rewards of our efforts. And as a consequence, it protects our identity as a being that creates. More prosaically, property rights are also there to support human dignity in more secondary terms. Property rights are a necessary but not sufficient condition for economic growth, through which rising incomes improve living standards. Property rights are not unlimited, however, there is no place in the world where property rights are protected in an unbounded fashion. Wherever there is a state, property rights are bounded. A balance has to be struck between economic growth and the social context and safeguarding of the common good – and the specific context matters.
He continued that, within a South African context:
“In South Africa, property rights are not a clinical subject dispassionately viewed. Different ideas of property have been at the burning heart of South Africa’s historical tension. Apartheid’s fixed racial categories live on in the current government’s perspectives on property, and it serves as a cover for a status approach to economic management at best, and exploitative plutocracy at worst. The effect is that property rights in South Africa are a potent weapon of political discourse, and this may drive economists like myself that pursue efficiency to absolute distraction. The evidence as presented today is not sufficient, especially on this topic in South Africa. A balanced property rights regime has to be provided in such a way in South Africa that people can identify with it, and understand why the legislative proposals of the current government damage the human dignity that is equal for all of us. Today’s conference on property rights is part of an emotionally charged political debate that will define South Africa’s ability to become a better country, and this is a significant responsibility for all of us to bear.”
First in the lineup of experts, David Ansara, CEO of the Free Market Foundation, presented on the topic of Title Deeds for Disadvantaged Homeowners:
“As the Free Market Foundation, we are very proud to showcase the Khaya Lam project. This is a project that has been going for 10 years, and in that time we have very proudly transferred over 10 000 title deeds to former council tenants – people who have been residing on properties for sometimes generations, but have lacked the former legal recognition of their ownership status. We work together with donors, with municipalities, with a team of conveyancers, and also with the beneficiaries themselves to help get title deeds into the hands of South Africans.”
Next up, Amy Barclay, Head of the Land Centre of Excellence at Agri SA, explored the question of How to Make Land Reform Work for All.
“We’ve looked at our past, we’ve looked at our failings, we’ve really looked at the challenges we’ve faced, and the bottom line is: we need money to achieve a big goal – finance is critical, and we need the collaboration and cooperation of every South African – whether it be the individual farmer, the worker on the ground, the state – everybody needs to work together in one single united direction in legislative policy that is cohesive so that we can achieve our goals, because thus far we’ve really not achieved the land reform targets that we’ve set,” she shared.
A pre-recorded interview with Hernando de Soto, world-renowned Peruvian economist, offered his direct insights on Unlocking the Wealth in the Property of the Poor.
Dave Steward, FW de Klerk Foundation Chairman, has been speaking to De Soto about the challenges of inequality, unemployment and the need for land reform in South Africa, and seeking his advice on how he has dealt with similar issues – not only in Peru, but around the world.
A key takeaway from the interview was De Soto’s assertion of the absolute need for consultation with the people involved in the historical processes of land reform:
“When we started our reforms, we built a system of popular feedback – which means that we knew that making any worthwhile reform was going to be polarising. We found that the stabilising factor was getting people’s opinions, and we established a system of popular consultation that actually went to the World Bank afterwards. The idea is that, with every reform you’re going to make, you want, one way or another, to find out from the bottom, what people think of it. There’s no agenda – you simply get the complaints, and you’ll find that a lot of the information that’s necessary for a reasonable solution will come from the people themselves.”
Conference keynote speaker Phumlani Majozi, Senior Fellow at African Liberty, followed, aptly, with a presentation on The Centrality of Property Rights for all Successful Societies.
“I strongly believe that – for societies to thrive, to grow competitive, to make a positive impact for their people, they have to be centred around property rights. And it’s very important that the property rights are protected by the framework and the laws that are being put together by the Government. If I own property, I must have a right to ownership of the property so that I am able to utilise it for whatever means. It’s a very important topic that South Africans need to reflect on and approach with a sense of purpose and drive to make change – we need to transform our society to one which is centred on the protection of property rights, which are critical for economic development,” he asserted.
To round off part 1 of the event, a lively panel discussion on The Extension of Property Rights to ALL South Africans was facilitated by Chris Endres of the Konrad Adenauer Foundation and included David Ansara, Amy Barclay, Phumlani Majozi and Moeletsi Mbeki.
After lunch, a pre-recorded video featured Prof Fernando Spiritto, Professor of Public Politics at the Catholic University, Andres Bello in Caracas, Venezuela. Speaking about the Venezuelan experience of the erosion of property rights, he said that the Venezuelan economy had shrunk by 75% since its socialist revolution and seven million Venezuelans had left the country
“The Venezuelan case shows that the rules in place matter. The policies are important if we want to achieve a collective goal such as economic growth. The challenge is to find a way in which everybody – especially the Government – respects the rules of democracy,” he shared.
Perhaps one of the greatest experts on the Expropriation Bill, Dr Anthea Jeffery, Head of Policy Research at the Institute for Race Relations, then offered her analysis of the Bill, its origins, and its implications.
“The Expropriation Bill will enable the Government to expropriate land – and many other kinds of property – generally for inadequate compensation, significantly below market value. It will also allow the government to expropriate land – at times for no compensation, and this is likely to have very negative consequences for all South Africans, because property rights are really vital to investment, growth, employment, and prosperity. There’s also a further risk with the Bill that it will allow custodial takings – in other words, that the Government – rather than having to expropriate one piece of property after another – will, by the stroke of a legislative pen, be able to take custodianship of vast amounts of land, and the people living there – as farm owners, home owners, factory owners – will have to lease from the Government, and may lose their leases in wide-ranging circumstances, too. So there will be huge uncertainty about being able to do business, about being able to reside in your own home, which will be extremely negative for the country and all its people. We need to recognise that property rights are the key to prosperity, to investment, and to the kind of better life that all South Africans would like to see.”
Dr Theo de Jager, Executive Director of SAAI, followed this up with the specific Implications of the Expropriation Bill for Agriculture and Food Security:
“This whole conference was actually about threats to ownership, to private property rights. From a farmer’s perspective, to have a title, to have secure ownership is much more than just a contract which shows that you own property – it’s the very foundation of a free market, it’s the cornerstone of capital. It is the reason why we have access to production loans, it serves as collateral. We looked at all these countries north of us – 50 of them on the African continent – that do not have free hold of farmland, which is the reason why we cannot unlock the wealth of agriculture on this continent. And we drew all these pointers back home to say, what should we do differently here? How must we make sure that the threats to property rights do not also become a threat to food security?”
Dawie Roodt, Director and Chief Economist of the Efficient Group, went on to highlight the Economic and Investment Implications of the Expropriation Bill:
“I’m quite concerned about the next couple of years in South Africa – we’ve got a government that has caused immense damage to the South African economy. If they expropriate, they can do other things as well, and I’m concerned that eventually this could lead to the kind of totalitarian state in South Africa. It’s not only a matter of stealing property, it’s a matter of stealing people’s lives, stealing people’s freedoms. I think we’re in a period of political transition – the next five years or so are going to be very difficult. Remember, there are many kinds of expropriation. I believe that inflation will become a significant problem in South Africa – that is a form of expropriation. I also believe that tax is a form of expropriation – I think we’re going to see more of that as well, because the fiscal accounts have become completely unsustainable. Fortunately, I think this is the thing about democracy – it’s only going to last another five years or so, then we will have another opportunity to get rid of an incompetent and quite often corrupt government.”
A panel discussion facilitated by Chris Endres wrapped up the part 2 presentations, and included insightful and engaging discussion and debate by Anthea Jeffery, Dawie Roodt and Martin van Staden, Head of Policy Research at the Free Market Foundation.
As the day drew to a close, Dave Steward reiterated that:
“Virtually all the problems discussed here today have their roots in the fact that the Government – for almost 30 years – has been following an ideology that is profoundly at odds with the Constitution with which we all agreed. FW de Klerk said in a speech on 31 January 2014 that non-ANC parties had signed off on the values, rights and institutions that are articulated in the Constitution. They had not signed off on the National Democratic Revolution and they do not accept it. The sense from our panelists and all our speakers today is that we must say no to things that are not acceptable. For us in the NGO sector, for businesses and for all South Africans – the time has come to say no, we do not accept this.”
In concluding the proceedings, Elita de Klerk, FW de Klerk Foundation Vice-Chairperson, shared:
“Everyone should enjoy the right to own a property – a piece of land for their cultural, housing or industrial purposes through the means of a title deed that secures that right. Once the right is secured, the owner can use it to create wealth for his or her family. Without that right, ownership of land or a house remains uncertain. Our Constitution is clear – no law may permit arbitrary deprivation of property. Herein lies a very clear constitutional obligation – expand property rights, and protect property rights. Any attempt to dilute the property rights of citizens on the basis of race would erode the rights to human dignity, equality, non racialism and protection under the rule of law. If handled properly, land reform could be the most positive development since 1994. However, if handled badly, on the basis of expropriation without compensation, it would be a catastrophe for all South Africans. It will deter foreign investment, amongst other things. As the FW de Klerk Foundation, we wish to confirm our commitment to advocate on behalf of millions of people in South Africa who do not enjoy the right to own property over which a title deed is registered, and that this right be expanded, strengthened and protected. Property rights can never be the right of a privileged few – it should be a right that we as a nation should afford to all citizens.”