Privatization of large state-owned enterprises will not lead economic empowerment

Development Economist Ayabonga Cawe warns that the privatization of large state-owned enterprises will not lead, as some suggest, the black economic empowerment. “The commission’s investigation into Eskom’s awarding of the Duvha Power Station tender to a Chinese company and Sassa’s Cash Paymaster Services saga reveal part of the answer. SOEs in this era represent a vehicle to consolidate personal, narrow and at times geopolitical alliances, rather than sustained domestic and developmental accumulation. To assume that such narrow accumulation would be achieved through large-scale privatization is faulty logic. The return of the debate over privatization of state assets is an inward-looking feature of this strategic posture for narrow accumulation, rather than a reform aimed at reviving the economy.” [Sub required]