South Africa has fallen 10 places in the 2018 International property rights index. This revelation was contained in the latest global report put together by the Property Rights Alliance, a global advocacy organization.
South Africa moved from 27th place to 37th in the list of 125 countries. The global index measured if people could buy and securely own property.
Property right is key to countries’ growing more wealth and becoming economically stable.
The drop in the index is the largest decrease of any country from 2017 to 2018, Free Market Foundation economist, Jasson Urbach, said.
Finland was rated the first‚ followed by New Zealand and Switzerland. The lowest countries with the least property rights and resultant poverty are stated to be Venezuela‚ Haiti and Bangladesh.
The global survey was compiled by Venezuelan Professor at National Academy of Economic Sciences, Sary Levy-Carciente, in alliance with 200 think tanks in 125 countries.
Economists use World Bank‚ International Monetary Fund and other UN data.
The annual survey shows that private ownership of land is associated with more wealth‚ better entrepreneurship opportunities and a happier “more trusting” and safer society.
South Africa’s drop comes after the ruling party‚ the ANC‚ in December adopted a policy of expropriation without compensation‚ Urbach explained.
The drop is linked mainly to a perception that people’s property could be seized based on a survey of senior business executives done in April.
The property rights index looks at three measures, which are: whether a country allows people to own‚ buy and sell land or if instead they allow expropriation with compensation; whether intellectual property rights are protected‚ such as allowing patents to be granted for new medication or technology‚ so that the inventor and country can make money from the innovation; and whether the justice system is functional and impartial.
The highest score is 10 out of 10, with the lowest being 1. South Africa dropped from 7 to 6.35.
Carciente, who spoke in Johannesburg early this week, said: “South Africa’s protection of property rights has got worst.”
She said in early 2000s, Venezuela started using expropriation without compensation. The government began wide-scale nationalism of land and expropriated farms‚ houses and factories, she added.
She said: “This led to poverty as people who knew nothing took over manufacturing and running factories and went bankrupt. Venezuela is a scary movie.”
She said there were long lines to get cash as there were shortages of money and she could afford medicine as a member of elite class but the medicine would not be available.
She said there was no domestic production of goods and no investment in the country. “Money is worthless. Go there and see with your own eyes. People are starving,” she said.
It costs a month’s minimum wage to buy a dozen eggs‚ Carciente added.