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Corruption, state capture and Apartheid – Cyril Ramaphosa’s culprits for our economic woes

ENCA reports that President Cyril Ramaphosa has blamed state capture, corruption and the legacy of Apartheid for the country’s economies woes.

Speaking at the opening of government’s two day Jobs Summit Ramaphosa admitted that corruption had undermined both investor confidence and public trust.

According Sowetan LIVE, Ramaphosa has promised that the jobs summit will lead to 275‚000 jobs a year.

Business‚ labour‚ government and community constituencies signed an agreement on Thursday which contained several proposed solutions to South Africa’s economic woes.

According to the Sowetan LIVE the framework includes rapid response teams to help businesses in crisis before workers get retrenched, promoting South African exports and unlocking more finance for business.

My Take

I don’t think state capture, corruption or the legacy of Apartheid are to blame for our country’s economic woes.

They are certainly factors, don’t get me wrong, but I don’t think they’re the root of the problem.

Apartheid ended 24 years ago, if the legacy of Apartheid was the problem it would be a fading one, it wouldn’t still be with us the way it is now.

The ANC was elected specifically on a mandate of addressing the problems Apartheid caused for us as a nation, and to blame Apartheid at this point is to say that the ANC hasn’t delivered on its mandates.

Apartheid should have actually made it easier for the ANC to achieve notable gains, because it represented us starting at a very low base. This is why so many ‘greatest presidents’ in the US tended to come after times of hardship.

Corruption and state capture, though very serious in themselves, are symptoms of deeper problems.

Right from the start of the ANC’s reign we had cadre deployment, where loyalty was more important than ability.

Now loyalty is a bad thing in most of these cases, because it represents a conflict of interests. We do not want police chiefs who are loyal to the same people who are defrauding us.

Nor do we want a situation where they are loyal to the party, and thus easier to pressure into helping cover-up stuff that makes the party look bad.

Sure not every cadre that has been deployed has been a disaster, and there have been people of integrity amongst them, but this culture of loyalty is part of how corruption thrived and eventually turned into state capture.

You see something similar if you look at the Catholic Church and its various scandals, a culture of maintaining the image of virtue does not lend itself to maintaining virtue.

Another problem is the racialisation of non-racial issues. Rape and violent crime were problems when Thabo Mbeki was president, when those problems were raised, he accused the researchers of being racist for raising them.

Because of this the problem continued. When Jacob Zuma was running for president, Julius Malema repeatedly proclaimed his critics “white-owned media”. Now Malema’s critics are still called “white-owned media” when they point out the problems with him and his party.

When you shut down critics through these ploys, rather than addressing the criticism, you allow problems to go unsolved and thus grow. Not only that but you discredit the movements you’re abusing to cover up those problems.

State capture wasn’t a matter of a few corrupt individuals, but a system which made the rise of those individual all but inevitable. The groundwork was laid long before Zuma became president.

Further we have a pro-rich economic regime. We have inflation targeting in our constitution, and we have historically pushed for foreign direct investment. For most of the period in which the ANC has ruled we’ve dropped taxes, its only fairly recently that taxes have gone up, and in the last budget we raised VAT rather than raising income or corporate taxes more.

VAT is a regressive tax, because it is on expenditure it hits the poor, who spend more of their income, harder than the rich.

In response to this we have hardcore Marxists proposing nationalising assets, and politically they’re doing pretty well.

I am not aware of any political parties suggesting doing away with VAT and raising the more progressive income and corporate taxes, and expanding our social benefits while we’re at it. We will nationalise the cow, but we’re not willing to redistribute the milk.

You may disagree with me here, my view is certainly not a popular one, but I think you’d have to agree that it is weird how we have a debate between Moneterism and Marxism, and there don’t seem to be any Keynesians around. There are often more than two approaches that can be taken to economic problems, yet we aren’t hearing third, fourth or fifth alternatives.

We’ve narrowed our field of vision to the extremes, and thus aren’t thinking about other alternatives.

A final issue is one of economic vision. What is our economy supposed to be in 20 years time? If you pay attention to the ANC, it is supposed to be largely agricultural, growing labour intensive crops.

If you’re reading this, I ask you, do you want to be one of those farm labourers?

No, labour intensive often means badly paid, it is essentially a peasant economy. Not only that, but it leaves us very vulnerable to climate change as well as our country’s natural drought cycle.

Solving unemployment is a means to an end. The end we are aiming at is solving poverty – and jobs which pay slave wages aren’t going to do that.

We don’t just need more jobs, we need those to be quality jobs, yet we have no vision to produce quality jobs.

Instead we have this romance of the land, in country which is not suited to farming, and we’re surprised that it is not working.

  • Picture courtesy of GCIS via Flickr.
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