The Role of Parastatals

When is a fish not a fish?  When it is a parastatal. it seems.

Is it a ‘for profit’ venture or a ‘public service’ venture?  If a profit making venture, who determines the extent of the profit? What competition is there?  Who controls the market? Who controls the investment?  And if they make a profit, who gets it?  Parastatals seem to provoke more questions that answers.  Mostly, SA’s parastatals seem unable to fend for themselves in their own back yard, in a protected market place, or they are so exploitative they are offensive, and some times they are both those things at the same time.  So what makes them think they can make it in other parts of Africa. See Troubled parastatals look to Africa for growth.

To say of a parastatal that it must be run on business lines makes sense until you try to answer some of those questions, then you need to have a hard look at what you mean by ‘business lines’. So, as a general principle, the Direct Democracy Forum favour public service models which do not profit from monopolised markets. In short, government should not be in the business of extracting profits from enforced trade with its own citizens.  

To permit parastatals to invest in other countries is tantamount to enforced investment of South African’s money in what could be high risk ventures.  The DDF would also not favour this activity.  This is not the purview of government, but rather of the private sector and a parastatal is not part of the private sector, no matter what it looks like on the surface.

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