Land grabs 'will ruin SA'. It's happened before
Venezuela expert has dire warnings for SA as it plunges down the global property rights index
A global expert has warned that SA must learn hard lessons from Venezuela, which has plummeted into poverty since implementing land expropriation almost 20 years ago.
Sary Levy-Carciente, a professor at Venezuela’s National Academy of Economic Sciences, was in SA to launch the annual International Property Rights Index, which measures property rights in terms of the ability to buy property or land in various countries, and ensure it is not seized without compensation.
The index shows, among other things, that SA has dropped 10 places since 2017, the biggest drop of all countries.It is compiled by Levy-Carciente and the Property Rights Alliance, a policy institute. She works with more than 200 civic organisations and think tanks in 125 countries to create the report.
SA dropped from 27 to 37, while Venezuela and Haiti were at the bottom of the index. Finland, New Zealand and Switzerland were at the top.
The data comes from UN sources such as the International Monetary Fund and the World Bank.
Levy-Carciente told Times Select that at the beginning of the century the Venezuelan government started to expropriate farms, land and factories. The manufacturing industry then collapsed, as did farms as the expert farmers and business owners were replaced by government officials without the required expertise.
Levy-Carciente said inflation in Venezuela this year was predicted by the IMF to be one million percent. In 2017 inflation was 3,000%.The country had severe food, medicine and cash shortages.
“People are starving to death,” she said, adding that a basket of food for a family for a month would cost a worker four years’ wages.
Since food was unaffordable, people relied on government donations of rice, flour or beans, but these were not enough.
Levy-Carciente does not know “how people are surviving”.
Her work with five other universities showed that in the past five years the average weight of Venezuelans had dropped by 8kg owing to less food being available.
Cities had become rundown and there were puddles for mosquito to breed in, while diseases that had disappeared were reappearing.
Levy-Carciente said she had contracted dengue fever twice, but because she was part of the upper middle class she could afford antibiotics – although they were not available in the country.She said her country’s decline into poverty, starvation and mass emigration had started with the expropriation of land and businesses. “Then industry collapsed. Government couldn’t cope and started printing money. Money became worthless.”
The index Levy-Carciente put together looks at 23 other variables, including Internet speed and access, civil society activism, safety and economic growth. It shows that countries with higher property rights also have higher wealth, safety and better Internet access.
The Free Market Foundation said at the launch of the index that property rights were an essential component of a prosperous and free society.
“While the rest of the world is improving their property rights protections, South Africa is moving in the opposite direction,” the foundation said in a statement.
“It is this direction of change that is most concerning and will have entirely predictable consequences of deterring future investment and accelerating the rate of capital flight.”