Property Talk

Author: Andreas Wassenaar
Date: 2013-12-20

The amazing events of the past week with the passing and state funeral of Nelson Mandela have left lasting impressions on millions of people around the world. How we were blessed with such an iconic and influential leader is extraordinary and the tributes that have been published in the media define a life that makes each one of us aspire to be a better person. As South Africans we are eternally grateful.

The question asked by Archbishop Emeritus Desmond Tutu in his Nelson Mandela farewell speech is what would have happened if Mandela had died in prison. South Africa without Mandela's influence is unthinkable and the millions around the world that have been inspired by him would regard a world without his magical touch as infinitely poorer.

As a property professional the question I asked is how do the protected property rights that we have in terms of our constitution, which facilitates the efficient and on-going trade in property, have Nelson Mandela to thank for this. An interesting article published on Bloomberg by a Harvard Law Professor, Noah Feldman, contends that the basic deal that Mandela struck from prison with FW de Klerk, and which was subsequently enshrined in the South African constitution, was to guarantee the existing property rights of white South Africans in exchange for an end to apartheid. Feldman's view is that white South African's benefitted from this but ordinary black South African's did not, at least not directly.

The threat of capital flight (largely white capital) from the country at the point of transition would have resulted in a far worse situation. Feldman asks the question of whether the sacrifice of justice (he would have contented that massive and immediate re-distribution of wealth would have been just) for a richer and more democratic South Africa was the right choice and comes to a tentative "yes", when considering the history of other post-colonial African countries. He makes the point that a politician is better off making a decision on what is pragmatically most likely to succeed in the real world than what is necessarily fair.

The article by Trevor Manuel, our previous finance minister and the current minister in the presidency in charge of the national planning commission, published in the Financial Mail, gave an excellent insight into the financial realities that faced the country at the time of transition in 1994 and the exceptionally pragmatic approach and political skill demonstrated by Madiba during this time.

It is when you have insight into these events that you have to be in awe of his leadership. The decisions taken at the time to protect property rights and embed these in the constitution and therefore pave the way for a prosperous future, even if it meant the protection of the white ownership of capital.

The government's reconstruction and development programme was to follow as a process of redistribution of wealth. Manuel writes beautifully that, "Trust is that aspect of leadership by which you embolden people and encourage them to grow. And if you are smart about how you do it, it becomes mutually enriching. But it can only be done if, as a leader, you are confortable in your position. Madiba was the supreme example of such a leader."

Our stated Seeff purpose is "Enabling People to Profit through Property". This would not easily be possible in a country where individual property rights are not protected. We have Madiba to thank for taking the tough decisions to ensure this.

For further information and an interactive analysis of this article follow my blog: andreaswassenaar.blogspot.com.

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