Quarterly Review 2018.12

Quarterly Review
October 2018 – December 2018

FMF PROJECTS

The FMF’s projects for 2018 included: consumer rights, economic freedom / growth, energy, financial sector, healthcare, jobs creation / labour, land reform / property rights (with a particular focus on #EWC – Expropriation Without Compensation), rule of law, transformation, as well as ad hoc issues as they arose.

MEDIA

The FMF works hard to increase its media coverage and reach as wide an audience as possible with its message about the benefits of economic freedom, growth and the rule of law.

Congratulations to our Durban Director, Jasson Urbach. For the second year in a row one of his articles has made it into Business Day’s 10 most read columns. This year’s article was titled: Government’s NHI plan is based on squeezing out private healthcare.

355 ARTICLES that quote or mention the FMF or originate from interviews or media releases or were written specifically for the media or the FMF’s website were published this quarter – up from 315 last quarter. See projects below for more information.

INTERVIEWS on radio and TV number 107 this quarter – up from 24 last quarter.

The FMF hosted 3 MEDIA BRIEFINGS this quarter and aims to host one per month whenever possible. The briefings provide journalists with an opportunity to ask in-depth questions about the topic under review. See projects below for more information.

Each briefing is followed by a media release to over 1,000 editors and journalists. Additional ad hoc releases mean FMF distributed 12 MEDIA RELEASES this quarter. See projects below for more information.

FMF is conscious of the power of SOCIAL MEDIA and we are working hard to reach more people via our website, Facebook, Twitter and YouTube offerings.

In the right-hand column, the FMF’s website has three “windows” to our social media making it easier for our members and website visitors to access…

Twitter @FMFSouthAfrica: 4,223 followers

Facebook: 4,676 likes 

YouTube: 279 videos; 1,210 subscribers; 132,107 views

Videos
Watch these two golden oldies recently digitised and uploaded to our YouTube channel:
South Africa: The solution
A constitution worth fighting for

FMF history series
We have begun the mammoth task of unearthing and presenting our 43-year history.
If you would like to know more, why not begin by dipping into our under-construction timeline.
We have digitised our photographs and added them to our website beginning with our 1977 (re)inauguration – see galleries.
We have digitised ancient, dusty VHS tapes and uploaded them to our YouTube channel here. A few noteworthy standouts include Leon Louw’s presentations, a prelude to the writing of South African: The Solution. There are 6 videos in this 1985 series beginning with HISTORY SERIES South Africa: The Solution 1 of 6. See also our 1986 privatisation conference: HISTORY SERIES Privatisation conference 1986 1 of 3 and our 1989 consumer conference: HISTORY SERIES Consumer power conference 1989 1 of 5.
If you have any photographs or tales from FMF’s past, we would welcome you sharing them with us.

Cartoons

Previous cartoons published by FMF can be viewed here.

PROJECTS (note: all articles, media releases and submissions are available on the FMF website)

CONSUMER RIGHTS

Far-reaching health controls with severe implications for consumers have been implemented or are under consideration. What is targeted? Products of greatest significance include tobacco, liquor, salt, sugar, traditional and faith healing, alternative medicines, baby food and junk food. Draconian alcohol laws, for example, raising the Minimum Legal Drinking Age from 18 to 21, have been presented to cabinet this quarter; similarly consumer-unfriendly tobacco laws are next.

ECONOMIC FREEDOM / GROWTH

The FMF is a co-publisher of the Economic Freedom of the World (EFW) index with Canadian based think tank Fraser Institute. The index, published annually, measures the degree to which the policies and institutions of countries are supportive of economic freedom. The foundations of economic freedom are personal choice, voluntary exchange, freedom to compete and security of privately owned property. The findings in the report unambiguously support the fact that economic freedom is strongly related to prosperity and growth; countries that are economically free tend to grow faster and be more prosperous.           

Articles

• The incredible growth of the middle class by James Peron
• Regulating Airbnb encourages anti-competitive behaviour by Chris Hattingh
• Less freedom, lower growth: What we should learn from international indices by Dr. Richard J. Grant
• The malign folly of "stakeholder" theory by Chris Hattingh
• Government wage bill: over bloated and underwhelming by Njabulo Mhlambi
• Economic freedom most rapidly reduces poverty by Eustace Davie
• Controlling the fuel price is a recipe for disaster by Martin van Staden
• Things are getting worse - but there’s an easy solution by Chris Hattingh & Martin van Staden
• South Africans need a radical solution: capitalism by Chris Hattingh
• LETTER: Government must stay out of business by Chris Hattingh
• SAA – more of the same mistakes promises more of the same hardships by James Peron
• Who invented the term ‘capitalism’ and why by Temba A. Nolutshungu
• Economic growth and freedom the key ingredients for transformation by Temba A. Noluthsungu
• To prosper, ensure a free economy (it worked for Mauritius) by Jasson Urbach
• The fundamental reason for belief in socialism by Andrew Kenny

Media briefings

On 10 October, Neil Emerick presented Is there hope for the future?. Neil demonstrates the software he designed, showing correlations between economic freedom, economic growth and other desirable outcomes such as the fact that people live longer in economically free countries. He also showed comparisons between countries and the significant effects of trends towards and away from economic freedom.

Neil’s presentation can be viewed here.

Media releases

• South Africa ranks 94 out of 162 countries measured in the Economic Freedom of the World Report
• Things are worse than they seem: error in World Bank data sees SA slip further in EFW 2018 rankings
• Braking [sic] News: Ex Finance Minister Nene’s shelved medium-term budget leaked to FMF
• Mboweni – R 5 bn bailout for SAA? Maybe! Out of his hands now

Submissions

• Submission on Economic Regulation of Transport Bill, 2018

ENERGY

The FMF is concerned about the energy crisis in South Africa, which continues to impact negatively on ordinary South Africans and has deleterious consequences for economic growth in the economy. Eskom, effectively, has a vertical monopoly on the entire system from generation to transmission and a large part of the distribution of electricity. This old, outdated model is slow to respond to changing circumstances. As a result, consumers are left in the dark and asked to consume less electricity during peak-demand periods. The solution: separate the generation from the transmission and distribution of electricity to make trading possible, including the sale of electricity across the grid from generators to large consumers (wheeling); establish competitive wholesale and retail markets. The unbundling of Eskom is the only feasible option to attract independent power producers (IPPs) and to secure our electricity needs moving into the future.

Articles

• To contain prices competition is essential in electricity markets by Eustace Davie
• SA’s daft electricity policy: 7 myths debunked, including ‘green power’ by Leon Louw
• Government hubris leaves South Africans in the dark by Chris Hattingh

Media briefing

On 5 December, Dr. Anthonie Cilliers presented SA’s future energy security at risk if draft IRP2018 adopted. Dr. Cilliers discussed that international experience shows that without sufficient affordable electricity, there can be no prosperity. IRP2018 will determine the how electricity is generated for decades, and whether South Africa will have enough reliable energy at low enough prices to facilitate investment, economic growth, job creation, transformation and poverty alleviation.

Anthonie’s presentation can be viewed here.

Submission

• Submission on Integrated Resource Plan, 2018
• Submission on MYPD4 Application to NERSA, 2018

FINANCIAL SECTOR

The purpose of the FMF’s Finance Policy Unit is to promote the application of free market principles to financial markets. Current actions continue to focus on the “twin peaks” regulation of which the Financial Sector Regulation (FSR) Act is the architecture, and the Financial Advisory and Intermediary Services (FAIS) Act.

Articles

• Draft “Bank Resolution” Bill is vague and violates the rule of law by Gary Moore
• Momentum’s monumental mistake and the perils of mob-rule by Robert Vivian

Media releases

• Mini budget – Zuma fiddled while South Africa burned!

Evening events

On 31 October, Dawie Roodt presented The maxi magnitude of the mini budget. Dawie discussed the Medium Term Policy Statement – also known as the Mini Budget. Despite its name, the Mini Budget is not a budget nor is there anything small about it. Rather, this statement is an opportunity for the Minister of Finance to report back on the health of the state’s finances, or, more accurately, the lack of anything healthy when it comes to the state and money.

Dawie’s presentation can be viewed here.

Submissions

• Submission on Draft Financial Sector Laws Amendment Bill, 2018

Video on Twin Peaks

Some years ago, the Financial Services Board (FSB) announced that it had “deregistered” over 15,900 financial service providers. The FSB did not specify race, but how much are you willing to bet that many of those deregistered were emerging black brokers and advisors? Now “Twin Peaks” (or Financial Sector Regulation Act) will further undermine transformation in South Africa. In addition, it will create an enormous bureaucracy with reams of red tape. It will cost an estimated R4,8 BILLION per year, every year, which is equivalent to 500,000 RDP houses or 5,000 new clinics per year, every year. Understanding the law and that it has zero measurable benefits is crucial.

The FMF’s Twin Peaks video can be viewed here.

HEALTHCARE

The FMF’s Health Policy Unit (HPU) contends and persistently provides evidence that in all sectors of the economy, free, open markets with competitive private enterprises serve consumer needs best. For the indigent, it would be better for government to purchase higher quality healthcare at a lower cost from the private sector than to provide the service itself. The HPU argues that patients are harmed when government dictates to healthcare providers, pharmaceutical companies and other firms in the healthcare industry how to manage their affairs, or at what prices they should sell their products and services. The HPU’s mission is to increase access to high quality healthcare for all South Africans.

FMF solutions to healthcare for the indigent

The FMF’s alternative solutions to improved health care for all include:

• Privatising the provision of health care – via giveaways of public hospitals to those who work in them or sales to those who wish to buy them
• Financing health care for the poor – preferably via state-sponsored vouchers, which the indigent can spend where they choose
• Encouraging more private hospitals by deregulating the industry and eliminating Certificates of Need
• Reducing prices and increasing health care quality through increased competition
• Training more doctors and nurses (the number of doctors is limited to 1,300 a year; this number has remained the same since the 1970s despite increases in the population and the disease burden)
• Allowing the private sector to train doctors and nurses
• Encouraging income-producing medical tourism
• Retaining skilled South Africans and attracting others by removing the limit on skilled foreign doctors
• Deregulating medical schemes so they can offer their clients exactly what they want
• Deregulating pharmacies
• Removing price controls, which send mixed messages to the industry
• Speeding up registration of clinical trials
• Giving those who pay for their own health care a tax deduction
• Allowing low cost insurance options

Articles

• International think tank policy dialogue on health, trade and innovation by Jasson Urbach
• Private sector is best hope to train new doctors, nurses by Jasson Urbach

JOBS CREATION / LABOUR

South Africa has an unacceptably high and rising level of unemployment. For government to achieve its stated objective of reducing unemployment and stimulating growth, it must urgently address labour market policies and laws that exacerbate unemployment. A significant part of our current work involves educating the public about the consequences of adopting a National Minimum Wage (NMW). There are currently an estimated 9.4 million unemployed – a NMW will just make it that much harder for these individuals to climb onto the first rung of the economic ladder.

Articles

• Policymakers, is there no compassion for the unemployed? by Temba A. Nolutshungu
• Open the labour market by Jasson Urbach
• The National Minimum Wage – a toxic, destructive instrument by Eustace Davie

LAND REFORM

FMF believes that secure property rights represent one of the most important requirements for the protection of both economic freedom and civil liberties. FMF is very concerned about recent proposals to amend the property rights clause in the Constitution. FMF proposes that:

1. All black occupied council-owned urban plots be converted to full ownership (“freehold”) – FMF is working with Ngwathe municipality (Parys, Free State) to convert 20,000 plots to full freehold.
2. Superfluous government land be redistributed to the victims of apartheid as a substantial once-off compensation.
3. Pre-emptive clauses be removed from existing and future RDP titles.
4. In tribal areas, communities be allowed to grant private title over homesteads while maintaining communal rights over arable land.
5. The Subdivision of Agricultural Land Act, 1970 be repealed to make it easier for poor individuals to finance smaller, more affordable plots of land.

Conference on Security of Property Rights

On 20- 21 November 2018, FMF hosted a conference on Security of Property Rights, dealing with case studies from Venezuela, Africa, India, Europe and Asia, and how to achieve land reform without expropriation without compensation (EWC). Speakers were: Leon Louw | Executive Director, FMF ||| María Corina Machado | Former Member of the National Assembly & Presidential Candidate ||| Sary Levy Carciente | Member of the National Academy of Economic Sciences & responsible for calculation and analysis of International Property Rights Index, Property Rights Alliance ||| Barun Mitra | Independent researcher and analyst & founder of Liberty Institute ||| Rejoice Ngwenya (Zimbabwe) | Founder and Executive Director, Coalition for Market and Liberal Solutions ||| Olumayowa Okediran (Nigeria) | Assistant Director of International Programs, Students For Liberty ||| Franklin Cudjoe (Ghana) | Founding President and Chief Executive Officer, IMANI Centre for Policy and Education ||| Penuell Maduna | Former Minister of Justice and Constitutional Development ||| Linda Kavuka (Kenya) | Advocate of the High Court of Kenya & African Programs Manager, Students For Liberty ||| Aimable Manirakiza (Burundi) | Founder and Chief Executive Director, Centre for Development and Enterprises Great Lakes ||| Tom Palmer | George M Yeager Chair for Advancing Liberty & Executive Vice President for International Programs, Atlas Network ||| Lawrence Mavundla | President, National African Federated Chamber of Commerce and Industry (Nafcoc) & African Co-operative for Hawkers and Informal Business (Achib) ||| Temba Nolutshungu | Director, FMF ||| Maria Klaas & David Ubane | First time home owners, Ngwathe ||| Eustace Davie | Director, FMF ||| Candice Pillay | Attorney and Partner, Hogan Lovells ||| Martin van Staden | Legal Researcher, FMF ||| Devon Windvogel | Lecturer, School of Accounting, Economics and Finance, UKZN ||| Terence Corrigan | Policy Fellow, Institute of Race Relations ||| Petrus Sitho | Full time activist for property rights ||| Phephelaphi Dube | Director, Centre for Constitutional Rights.

For full report with key themes, media coverage and more, see here; for photos see here; for videos see here

Khaya Lam (My Home) Land Reform Project

Khaya Lam is an FMF initiative that seeks to reverse the evils of apartheid. FMF Executive Director, Leon Louw, notes: “Black land deprivation was probably the single worst element of apartheid. Since apartheid ended, little has changed. In South Africa today there are still around 5 million black families living as tenants or without ownership rights in houses they have lived in for generations. There has been no systematic conversion of these “council owned” and “traditional community” properties to full unrestricted ownership. The prospects for economic upliftment throughout South Africa through the Khaya Lam national property titling project are exciting and immense”.

Under the project management of Perry Feldman, the FMF’s Khaya Lam project is gaining momentum. In addition to Ngwathe (FMF’s pilot project), FMF is now working in Grabouw, Stellenbosch, Graaff-Reinet, Barkly West, Viljoenskroon, Alexandra, Thanda and Cape Town (Hout Bay, Vukuzenzele, Hillview).

Khaya Lam: Brief progress report

On 3 December, Khaya Lam presented 326 title deeds to residents in Stellenbosch. The titles were sponsored by Johann and Gaynor Rupert of the Reniet Foundation. Jannie Durand of Remgro, Rian Maartens of the Ipic Group and Arthur Keizer of Capitec were there. Leon Louw, executive director of the FMF, spoke about the difference between beneficiaries  and recipients. The people present were all recipients. They were receiving what had been taken from them and now being returned. They were not beneficiaries but recipients of rights that had been removed 105 years ago.
Johann Rupert spoke of the fact that he was brought up to remember where he came from. Both his father and mother were children of the depression. In the late 80’s when he, Johann, started understanding the terrible disadvantage that black entrepreneurs laboured under (particularly when it came to ownership of land) he and his father established the SBDT – Small Business Development Trust.
Rupert also made the incredible announcement that besides the 10,000 titles his family was sponsoring, Jannie Durand, Remgro CEO, was sponsoring an additional 10,000 in his personal capacity.

Photos from the presentation can be viewed here.

In the last 3 months, Khaya Lam has had presentations in Vredefort, Parys, Grabouw, Graaff-Reinet, Hillview in Cape Town and the big one (326), in Stellenboosch.

The total processed is now 3,361 which represents an increase in live capital from zero to R403,000,000. We have received further pledges of 20,050 titles. Together with pledges and funds in hand we are on course to process  more than 27,000 titles. This will represent a value of over R3,1 billion. Much work lies ahead in the new year.
 

Change a family’s life for the better today

If you would like to sponsor a title deed at just R2,250 (or a part title deed), please email gailday@fmfsa.org or do so directly through our website here.

PLEASE NOTE: We have a sponsor who donates just R200 per month toward Khaya Lam. His monthly contribution has so far sponsored 6 title deeds, contributing a whopping R600,000 into the economy. And another who sponsors one title deed per month. Why not join them?

Articles

• Expropriation without compensation is a contradiction in terms by Martin van Staden
• Are supporters of EWC doing their part? by Mpiyakhe Dhlamini
• Former president Thabo Mbeki urges ANC rethink on EWC by Mpiyakhe Dhlamini
• Amending the Constitution on shaky grounds will cause illegitimacy by Martin van Staden
• The Ingonyama Trust should keep its promises and entrench property rights by Mpiyakhe Dhlamini, Martin van Staden & Chris Hattingh

Media releases

• Khaya Lam Land Reform Project has effected over 3,000 title deeds since project inception
• No to Expropriation Without Compensation
• Government thinks review of just 0.01 percent of submissions is sufficient to change S25 of Constitution
• FMF International Conference: Expropriation without Compensation (EWC)
• Johann Rupert sponsors 70 Title Deeds in Aberdeen
• Khaya Lam Land Reform Project brings joy to township residents this festive season

TRANSFORMATION

Some argue that freedom from apartheid has not made a substantial impact on black advancement. Others argue that for blacks to succeed they need government assistance through Reconstruction and Development Policies and Black Economic Empowerment legislation. Still others are of the view that economic freedom and growth, the development of a strong legal framework, and good infratructure and security, are all that is required for the realisation of human potential. 

Evening event

On 19 December, John Fund, a leading US political and economic analyst, presented America in the age of Trump. Under President Donald Trump there has seen both political and policy turbulence. John Fund, a leading US political and economic analyst, provided his perspective on the current state of the US economy and the results of November's midterm elections, in which Trump's Republicans increased their numbers in the Senate but lost control of the House of Representatives. Over 20 Democratic candidates are lining up to oppose Trump for re-election. Fund provided a thumbnail analysis of them and their prospects for winning.

John’s presentation can be viewed here.