Corruption Watch

Multi-layered Corruption has SA close to its knees


South Africa has become a soft target of corrupt forces from many parts of the world, and the weight of it has the country economically and socially almost on its knees.

This is the picture emerging from #GuptaLeaks, ever worsening economic indicators, and mounting incidents of social unrest. Also clear, is that it is a complicated problem with a multitude of historic-, structural- and social roots.

It will require a multi-pronged strategy to come to grips with. Simplistic, slogan-type answers pose more a danger than a help. No single leader (to be fired or take over control), party, organisation or programme on its own, will turn the country’s fortunes around.

Soft target

The mere fact that the “Gupta Empire’s” forces, arriving in 1993 on the shores of Africa’s strongest, most developed economy, and the one with the largest profit potential, could meet with so much success as quickly, tells one how soft a target our young democracy became.

They found land for their seeds of corruption, from the apartheid-regime need, for state survival and arm itself despite international sanctions and embargos.

Under the ANC-regime the motives just changed to more personal ones – self-enrichment, funding the party and broadening patronage networks to deliver political power. It also became lot more brazen.

In the slip of the Cuptas and their first main target, President Jacob Zuma, followed several other international players. By now we know of the PR-company Bell Pottinger (British), business consultants McKinsey & Company (American), the huge international computer software company SAP (Germany) and the international auditing firm KMPG.

And, do not expect the list to end there. For instance, lurking in the still outstanding corruption, fraud, and racketeering charges against President Zuma, is French arms dealer Thomson CFS.

Some of these companies were active in SA pre-1994. It is not inconceivable that, this fact played and role in Thomson CFS changing its name to Thales in December 2000.

I can also personally testify that another big British PR-company played a supportive role in the pre-1994 political campaigns of the then governing National Party. However, there is a strong argument to be made that it was a positive role, mobilising white electoral support in a referendum for a mandate for the Codesa constitutional negotiations to proceed.

Be that as it may, as especially financial sanctions were becoming unbearable, the country was a soft target for international predators.

After the 1993/4 settlement, and the ANC coming to power, a whole phalanx of inexperienced government/administrative leaders took over. Broad public expectations were high – expecting quick results, and internal party and institutional checks-and-balance, not properly in place.

The temptations for leaders, excluded from the of the mainstream economic loop all their lives, where almost inhumanely huge.

And, the closed party-list system for election of parliamentary representatives, also weakened accountability to voters.

The net result, South Africa became an even softer target to the predators.    

A two-way street

However, corruption is never an individual crime – like fraud, theft and the like can sometimes be. It always involves two or more parties. Someone has to pay someone else, by bribe or kick-back (sometimes camouflaged as ‘commission), to gain an unfair or illegal advantage.

It would be irresponsible, and dangerous escapism to blame the endemic corruption only on outside forces – the Guptas and/or others. Much of it is homegrown and/or result from domestic structural deficiencies.   

However, other countries, and especially developed countries should also take note of what is happening in South Africa, and sharpen their own ant-corruption efforts.

For one, what allegedly happened with McKinsey, is a criminal offence under American law. Executives of American-based companies can go to jail for corruption, where-ever perpetrated. Not only has American preventative measures failed on this occasion, but to the best of our knowledge there has been no reaction yet from American authorities.

 But, hopefully, some moves from South Africa to get prosecution going, will show results.

Fact overall, however, is that despite some investigations in the home countries of the companies involved in weapons transactions, to the best of our knowledge, no one was ever penalised for their conduct.

The quietest of the lot is France – notorious as shrewd operators in the international arms market.

Indicative of how deep and comprehensive international weapon suppliers operate, I personally became aware, while attending an International Parliamentary Union conference in Spain in the mid-1990s, how one such a potential military arms supplier knew that a senior ANC member was part of the SA delegation. This delegate was not only contacted, but invited to meeting with their top officials and treated at a VIP-lunch.

Diversion of attention

Now that Bell Pottinger & Co has become notorious, courtesy of #GuptaLeaks, for the ANC to attempt making them the scapegoats is, to our mind, a cynical move to divert attention from its own neglect to deal decisively with corruption since news things gone wrong with the arms deal first broke, and the Public Protector’s State Capture report.

To simply get rid of Mr Zuma and his cohorts, on its own, will also not be enough. Neither will deputy president Ramaphosa getting himself elected to the number one spot on an anti-corruption ticket alone, do the trick. He should ask the Democratic Alliance (DA) mayors, who took over from the ANC at local governments, how difficult it is to get rid of ingrained corruption.

Nor has will the DA on its own turn the ship around. While the closed party-list electoral system is one of the structural problems that must be dealt with, and one wants representatives led by their conscience, it is shocking that the DA subjected its councillors to polygraph testing after it lost a secret no-confidence ballot in Mogale City.

It amounts to intimidation, enforcing blind loyally. Something that cannot be afforded in the fight against the multiheaded enemy called corruption.

United National ‘war’ called for

In an opinion piece by its editorial board, Bloomberg wrote about South Africa:

  • “A potentially prosperous and dynamic economy is on the fast track to ruin. Altering its course will take real political reform; (Our emphasis.)
  • “Unemployment has risen five percentage points since 2008, to a hope-crushing 28%. The country’s population is expanding faster than its economy, which lately has grown at less than half the rate of sub-Saharan Africa as a whole. And its inequality is among the highest in the world;
  • “These are the fruits of failed economic policy. Yet far from grasping the need for change, at a recent conclave of the ruling ANC, President Jacob Zuma championed ideas for entrenching his dominance and enriching his supporters;” and
  • “If they want to revitalize the economy, they need to expose floundering state enterprises to competition and address the corruption and inefficiency that have caused the country to sink in global business rankings. (Our emphasis.)

Sean Gossel, senior lecturer at UCT’s  Graduate School of Business, is on the mark, a The Conversation-article: “South Africa’s current crisis is a systemic failure extending across national and local government ….;” and

“Short-run measures will need to include holding public officials to account, reforming state owned enterprises and reversing the numerous institutional weaknesses at all levels of government.”

In short, a balanced holistic approach woven into a multi-disciplinary and -sector national strategy, is urgently needed to turn the fortunes of South Africa around and save it from becoming a full-blooded failed state.

by Piet Coetzer

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