Corruption and State Capture Across the Public and Private Sector – by Joyce Moloi-Moropa
The old and new political as well as economic elites are engaging to determine the shares of the new political order. Contrastingly, some of the new elements of the political and economic class are conscious of the dangers of losing the support of the poor and the working class. Hence the need to continue shouting slogans of the poor and working class and always presenting their interests… the relative but remarkably weaker state of our Alliance components particularly at leadership and branch levels concomitantly provides a conducive environment for the perpetuation of corruption, ineptitude, malfeasance, and general absence of consequence management.
By Joyce Moloi-Moropa, National Treasurer of the South African Communist Party
Introduction
Corruption in the public and private sector is a matter of two sides of the same coin. It exists in tandem. The main source of corruption is the toxic system of inequality, private accumulation and the exploitative socio-historical and economic relations still prevalent in all societies. To understand and appreciates the nature and extent of corruption, one need to look, amongst others, at the socio-historical property relations that characterise ownership patterns across our divided society.
The paper posits that the 1994 democratic breakthrough needed to be sustained and accelerated. Our failure in this regard has unwittingly heralded a general sense of impatience and despondency amongst our people; oftentimes leading to vulnerability, desperation, frustrations and hopelessness. It is in the mixture of these factors that lawlessness, lack of accountability and corruption find fertile ground for sustenance and propagation.
It is nothing surprising that an increasing number of people have since concluded that, just like with other liberation movements the world over, the leadership of the people’s liberation movement has gradually degenerated and got consumed by the struggle for individual and elite preservation and self-enrichment. The noble ideas of communalism and human solidarity are discarded and thrown aside.
The situation has deteriorated to the level where leaders instruct the masses on what is good for the masses and who the masses’ leaders should be. Lies, financial enticement and manipulation of the wishes of the communities and branches have suddenly become a norm. Corrupting and capturing community members and branches have long become the order of the day. The way out of poverty and into the elite club that is more interested in self-preservation by all means takes precedence over everything. The people’s needs and aspirations fell on the wayside. Business and dubious elements have seen the opportunity and grabbed it with full hands for their own interests. The interests of the poor and the working class are crudely displaced and pushed to the side.
The old and new political as well as economic elites are engaging to determine the shares of the new political order. Contrastingly, some of the new elements of the political and economic class are conscious of the dangers of losing the support of the poor and the working class. Hence the need to continue shouting slogans of the poor and working class and always presenting their interests, sharp contradictions notwithstanding.
This pattern has been taking shape over many years, although it escalated sharply after the 2007 ANC 52nd National Conference which took place in Polokwane. Of course there is no doubt that capitalism is inherently corrupt. However, it was the past 10 years or so that have engendered a distinct system of corporate capture at various organs of the state, hitherto unknown in the history of our democratic dispensation. As a result, corruption has been elevated to the level of the single most strategic risk undermining all our efforts towards the 2019 national elections and beyond.
The necessity of changing the Apartheid socio-economic property / economic relations
When the ANC took power after the 1994 breakthrough, it faced a mammoth task of transforming perilous socio-economic and political relations which were in the main racially defined, with the white minority owning almost every facet of the economic wealth and the black majority being poor and property less. With the advent of democracy the black majority expected the ANC government to use its political power in the state to alter and/or tilt socio-economic relations in favour of the historically deprived and disadvantaged.
The Reconstruction and Development Programme (RDP) was conceived and implemented through democratic consultation and participation of the black majority. The open democratic space allowed all classes, class stratus and intra-class off shoots to come to the fore and articulate their narrow and sectorial interests. In this battle, certain dominant interests disguised as national interests assumed hegemony resulting in the congress movement pulling apart and the centre no longer holding steadfastly as before. The emergence of factionalism and careerism did not help the situation.
As a result, a number of out rightly backward economic and social policies were adopted, sometimes to the shock of the poor and the working class. On the other hand, the capacity of the state gradually weakened so much that even the most progressive and radical of policies never got implemented. The embarrassingly sluggish pace in areas of land redistribution and agrarian reform, education, health and many aspects of economy transformation is a case in point.
The role of the Democratic and Transformative State
The state was viewed as the central engine for development and economic accumulation and thus, like the ANC, became the battle ground for all various social classes. In all these struggles, the voice and interests of the poor and the working class were seriously compromised, if not marginalised. The Alliance was weakened.
The poor and the working class were told to tighten their belts and not to demand living wage salaries as such would frighten foreign investors. However, the “belt-tightening diet” was only fed to the poor and working class. For the old and new political and socio-economic elites, gravy train of luxury and creed was on a high rollercoaster. In the process the RDP route was gradually deviated from and ultimately abandoned without mass consultation and participation. Regrettably, all these point to our failure to fundamentally change the racially skewed socio-historical and economic property relations.
The emerging black petty-bourgeoisie got frustrated and became more restless and swelled the ranks of the congress movement to influence policy direction of the people’s movement. It is in this context that BEE must be understood. The purpose of BEE was to de-racialise the economic and property ownership in the country. To ensure that black people participate meaningfully in the management and ownership of the economy and thus reduce white monopoly.
Understandably, the Apartheid beneficiaries did not take kind to the BEE programme and took every effort to see its impact minimized and frustrated. The opponents of BEE either used their empowerment structures and vehicles to pick and choose influential black business people to access government and influence its policies or used fronting as a way of undermining the whole purpose of BEE by corrupting some black business people.
BEE resulted in the emergence of a group of very few highly politically connected rich black business people who derived benefits for doing little or nothing at all. Some were appointed to senior positions for window dressing purposes and without contributing positively to the management and ownership of the economy. Hence ultimately BEE failed to achieve its intended goals.
Broad Based Black Economic Empowerment (BBBEE) was conceptualised and implemented as a way of remedying the pitfalls of the BEE. The aim of the BBBEE was to empower communities and not individuals as was the case with the BEE. This approach was lauded as progressive and people orientated. However, the spectre of corruption within the state and private sector spooked it.
Mining and construction sectors became salient features of the extent and nature of the intercourse between state and private sector corruption. Prospecting and mining rights continue to be granted without regard for rights and interests of the community. Consultation with the community is more a matter of compliance with legislation than a socio-economic imperative. There is very little interest or coherent strategies towards the realisation of local beneficiation.
Similarly, BEE companies continue to be hand- picked arbitrarily without regard to principles of transparency, accountability and fairness. It all depends on who from government or the Alliance is lucky to get inside information about a potential project, and thus influence the relevant mining company as to whom to partner with. Auditor-General and media reports, as well as protestations by communities point to a deep-rooted culture of corruption in the construction of stadia, roads, dams, clinics and other forms of services the state provides through the private sector.
The collusion (corruption) schemes around the construction of the 2010 FIFA World Cup, the Steinhoff and VBS scandals, the Gupta mafia empire as well as the role played by KPMG and other auditing and legal firms epitomize the corrupt interwoven relationship between the political and corporate elites in milking the national resources to the detriment of the poor and the working class.
Leadership Deficit
This shows the extent to which the institutional and party political leadership is so interwoven in the corrupt relationship with both business and private sector interests to the detriment of the poor and working class. Unethical and corrupt leadership that is beholden to private interest and big business would not lead the transformation of society to the interest of the poor and working class.
Such leadership is engaged in constant struggle of self-preservation and self-aggrandizement. Leadership and its associated features like power, influence and control must be properly checked, scrutinized, transparent and held accountable to the highest moral and ethical standard. The reason our state is in this degenerating and deplorable stage is due largely to lack of ethical, accountable and people-centred leadership. Put differently, the relative but remarkably weaker state of our Alliance components particularly at leadership and branch levels concomitantly provides a conducive environment for the perpetuation of corruption, ineptitude, malfeasance, and general absence of consequence management.
One of the fundamental reasons for our weaker capacity as a democratic state and our indecisiveness in confronting the scourge of corruption lies in our failure to implement our own decisions as an Alliance. Around 1998 the SACP and the Alliance partners identified four broad but interrelated shortcomings which had the potential to derail the objectives of the National Democratic Revolution. These shortcomings were as relevant then as they are today.
They are (a) misunderstanding our location within global realities (to what extent are we able to determine terms and conditions of our political and economic relations with countries such as Russia, China, USA etc – including on issues of nuclear deals, fourth industrial revolutions, trade tariffs etc?), (b) macro-economic policy ( inclusive of RDP, GEAR, NDP etc), (c) lack of consistency in building a strong, developmental state and (d) the tendency to demobilise the mass popular movement. Our failure to vigorously address these shortcomings and implement many other related resolutions have unwittingly bred a fertile ground for leadership indecisiveness, policy incoherence, poor capacity, a disconnect with the masses and general corruption across the board.
To further illustrate the point, in one of the 10 –aside Alliance meetings in 2001, there were frank and concrete discussions around effective management and mandate of our SOEs. In the context of the debate on the restructuring of state assets, there was a broad appreciation and commitment around the need for an urgent attention on the failure of boards and senior management to take seriously their public mandate. “It is critical that the Directors and Management of publicly owned entities has a clear sense of public responsibilities and national strategic priorities, and that they grasp the qualitative difference and advantages of publicly-owned entities”.
Widespread maladministration and rampant corruption amongst almost all of our SOEs is nothing but an arrogant disregard of this and other similar commitments made in several Alliance meetings and Conferences.
Some few Comparative Studies
The phenomenon of corruption applies as much to South Africa as it does in many parts of the continent and the world. Latin America has witnessed rolling mass uprisings against corruption at higher levels, whilst China has demonstrated some high level commitment to deal decisively with the scourge of corruption in the private and public sectors.
Early this year, Venezuela experienced one of several rounds of sustained mass protestations against President Nicolas Maduro with placards reading ‘’All the food for all the people! No more dictatorship’’. The crisis was sparked by a deteriorating political crisis and economic catastrophe characterized by, amongst others, faltering oil exports and shortages of most basic consumer products, including food and water.
Outside Venezuela, there is growing public anger and popular revolts against corruption and economic decline throughout Latin America.
In Mexico public pressure against corruption has been mounting, with allegations involving the family of outgoing President Enrique Peña Nieto (Somewhat similar to the situation in Angola).
Equally interesting is the volatile situation in Brazil which has recently faced its worst corruption scandal and deepest economic slowdown in decades. With elections set for October 2018, it is remarkable that the two highest polling presidential candidates were a former president currently in prison on corruption charges (Luiz Inácio Lula da Silva), and a right-wing senator with a penchant and declared commitment to military rule. All these examples are of strategic relevance to the progressive movement in our country.
Owing to its traditional communist orientation, China attracts a lot of interest globally around how it tackles issues of corruption. All things considered, indeed China provides some form of high level commitment in dealing with corruption relatively better than in many developed and developing countries. A new anti-corruption agency, the National Supervision Commission has recently been established to oversee all public servants exercising public power—an initiative hailed as a demonstration of the decisiveness of the leadership on one hand, whilst on the other hand it is decried as a platform to purge internal opponents.
Whereas we are unqualified to pass judgement on the veracity of the fears and concerns of some of the critics, it is the will and determination of Xi Jinping and his Central Committee in uprooting corruption that we should draw inspiration from. For instance, the record breaking fine of $489 million meted out to GlaxoSmithKline (GSK) allegedly for bribery has served as a stern warning to corporates to desist from undermining legislation against corruption. Companies such as Nestle, Michelin and Bridgestone have also met the full wrath of Chinese’s legal system. In the context of the lessons learnt from Africa, Asia, Latin America and elsewhere; the ANC and the Alliance can regain the moral high ground and do everything necessary in the interests of the people of South Africa.
Radical Economic Transformation: Prospects and Impediments
The Radical Economic Transformation (RET) concept, like any other concept, carries both prospects and impediments. It has the potential to radically change the current economic and property ownership patterns to the benefit of the black majority, the poor and working class and also drastically change the racial outlook of the business and managerial echelons of our society. If properly implemented, it has the potential to lift the substantial majority of our people from the wrenches of poverty and inequality. However, as we now know, you cannot have radical economic transformation and corruption in one sentence. The latter is a complete antithesis of the former. To the extent that we are committed to radical transformation, the fight to root out our organisations, state institutions and society of corruption need to remain paramount.
CONCLUSION
The theoretical genesis of the crisis of corruption in our country and the practical effects resulting from its permutations has been outlined sufficiently. There is no doubt that, in general, our deployed cadres across the board have failed to live to the standards necessary for the sustenance and maintenance of our historical political and ideological hegemony amongst our people. They do so because, in part, there are weak or no coherent systems, values and measures to hold them accountable.
Being a leader of society, it follows that our omissions and commissions with regard to the prevalence of corruption within the public and private sector have directly and indirectly contributed to an environment of callousness, lawlessness and greed within our communities. Materialism and opulence have become the new normal. Regrettably, this practise is more often than not associated with our leaders particularly at provincial and local level.
Revolutionaries are by orientation and practise, the most adept and committed at developing solutions for challenges facing their organisations and the society at large.
In this regard South Africa is not short of policy, legislative and institutional instruments to minimise or eradicate the scourge of ineptitude and corruption. Central to these measures lie the urgent need for the leadership of the Alliance to set the tone at the top, to live by the spirit and letter of their oaths of office and to lead by the high standards of revolutionary morality and ethical uprightness. To a large extent, there is consensus around the role that could be played by institutions such as the Public Protector, Human Rights Commission, and the Judiciary in rooting out corruption. The need to focus on the strengthening and transformation of other legs of the criminal justice system, particularly the NPA and the Hawks, has never been as urgent.
ENDS/
