Introduction

The concept of empowerment is a particularly important one as the world moves toward globalization and a knowledge economy. The ability of every man to earn a living and accumulate wealth is no more in direct proportion to how much effort he exerts in a chosen field of endeavour. The fact that labour is now internationally mobile, means that every person is competing against a global pool of human capital, all vying for deployment in a limited pool of organizations. Thus, although a man may be willing to work very hard, the value of his work has been diminished by the forces of supply and demand. The demand for a paying job far outstrips the supply, and the ability to earn a living from entrepreneurial activities is being steadily diminished. Globalisation of the supply of capital has resulted in huge multinational corporations invading the towns and villages of every nation, offering products and services much cheaper than local providers, due to their economies of scale and access to capital. Therefore, the cornershop owner and the family business is fast becoming a thing of the past. Anecdotal evidence points to the offspring of established merchants opting to go into the professions, rather than trying to go into the family business. The common reason is that the chain stores and big business are just making life too difficult for the family business. Many of the people who choose to forego the chance of building the family business firmly believe that the lifecycle of business has reached the death phase and is not sustainable over their lifetimes. Thus, the demand for jobs in the corporate world far exceeds supply. From this observation, another factor rapidly creeps into view: knowledge. The skills needed to capitalize and run large multi-nationals and corporates is often very complex, further reducing the eligibility of many people to even begin competing for jobs. Thus, against a climate which is systematically disempowering people, there is a huge need for a mechanism to empower them.

Asset ownership is often the best way to empower people. The drive by government to increase the number of previously disadvantaged individuals completing a tertiary education is a drive to help them acquire an asset from which income can be produced: intellectual capital. The various funds set up to help entrepreneurs is also an attempt to help them acquire an asset: an income producing business. The question now arises as to which asset class is perhaps most suited to producing income for the largest possible number of individuals? This asset class would also need to provide passive income with low volatility and regular cash payouts, as well as long term capital growth. The ability to provide passive income is important, as not everyone will be able to adequately exploit an asset that requires active effort, for e.g. not everyone can run a business well, and not everyone can study and make money from their knowledge. Regular cash payouts are needed to supplement the other income sources of the recipient, and to provide a cash buffer against external and internal disruptions to earnings and savings, for e.g. an economic downturn or sickness. Long term capital growth is needed as a mechanism for facilitating generational wealth and the requirement for low volatility levels is important as a means of ensuring that the features of this asset which are so desirable are not rendered useless due to wild swings in value and income generation. The asset which satisfies this criterion is fixed immovable property. For the purposes of exploring how facilitating property ownership brings about empowerment, the asset class will be split into two sub-groups: residential property and commercial property.

Residential Property as a facilitator of Empowerment

Residential property ownership offers a number of empowerment advantages. Firstly, the ownership of a home provides a sense of security and stability. Without having to worry about the stability of his source of shelter, a man can focus on more important needs in life. Maslow accurately described a hierarchy of needs, and true to this hierarchy, if the lower order needs, such as food and shelter are not met, the higher order needs, such as the need for achievement and independence, can never be fulfilled. Also, a home houses families, through generations. Thus, a young entrepreneur with a family owned home to provide him with support, can afford to take risks in life and spend his earnings on trying to pursue ventures, as opposed to having to conserve cash in order to secure a dwelling for himself. Also, due to rising property prices over time, the equity inherent in homes can provide the collateral that a person needs in order to secure funding to be used in the acquisition of even more assets. A home is usually the most useful and valuable item to have on your personal balance sheet, as it provides stability, security, collateral and capital appreciation over time. Therefore, privatizing the ownership of homes is crucial, and as a second step, developing vehicles to help people own homes is very important in the empowerment process.

Commercial Property as a facilitator of Empowerment

All economic activity can ultimately be tied back to property. Service businesses, manufacturing, hospitals, etc. all need a fixed property premises from which to operate. Government departments, the civil service, etc. all also need a premises and land in order to operate. The surest way to ensure that you benefit from as wide a range of economic activity as possible, is to own as wide a range of land and property as possible. Therefore, if true empowerment entails sharing the proceeds of the countries economic activity across a wide range of stakeholders, then a broad investment in property is one of the best ways of doing that. Imagine an investment of just R1000 made into a property owning company that has a wide range of property interests. That R1000 will be deriving profits from retail, manufacturing, services, education, medical services, etc. Now, imagine that a million people each put in R1000 to establish such a company, and that each of the million people are rural farmers – you would have the situation where some of the best property in the country is owned by poor, rural people and the fruits of some of the best businesses in the country is being used to uplift them, by means of money transfer through rental. Thus, offering the masses the chance to own the prime property of the country is the best way to ensure that economic development benefits those that need it the most.

Conclusion

The investment in property by a community has the ability to uplift the community and to put the entire economic cycle of their radius of investment within their control. It is thus crucial that members of a community support efforts to establish such schemes, and that they move rapidly to secure the valuable property they so desire.