From state capture to shorting the rand – Jeremy Cronin

SACP DGS says corporate capture strategies are a constant reality, not just limited to the Guptas

Alliance summit convened at the request of President Jacob Zuma declared corporate capture a real problem, called on alliance formations to close rank and address the problem

26 May 2016

The phrase “state capture” has been used frequently in recent times with senior members of the ANC apparently taking up very different positions. President Zuma, for instance, told the ANC Gauteng provincial general council: “If you talk about state capture, you’re misleading people. You’re taking a small issue and making it a big issue. Is the judiciary captured? Is the legislature captured?”

There are some problems with the way this debate is being shaped. In the first place, “state capture” is often invoked as if it only referred to the Gupta family’s dealings. This risks factionalising the debate. More importantly, it underestimates the wide variety of ways in which corporate capitalist power subverts democracy.

Consider Greece, where the electorate recently voted overwhelmingly against austerity in both a general election and a referendum. That expression of the popular will was simply brushed aside and subverted by the corporate will of unelected French and German banks, with austerity enforced upon the Greek people through an equally unelected troika, the European Commission, European Central Bank, and IMF. Democracy and profit-seeking monopoly capital are not natural bedfellows.

In South Africa corporate capture strategies are a constant reality. They range from the daily ideological battering that tells us “there are no alternatives”, through dire threats from ratings agencies, all the way down to the most venal behaviour epitomised by the likes of Glen Agliotti, the late Brett Kebble, or the Guptas.

The second problem with the current state capture debate is the phrase “state capture” itself. It’s better to refer to “corporate capture”, because corporate capture is not directed at the state alone – political parties, trade unions, the academy, the media are all targets.

It was with this wider understanding that last year’s ANC-led (five day) alliance summit first gave local currency to the corporate capture debate. The summit devoted much of its time to self-reflection. It noted problems of growing social distance between leadership and our mass constituency. It linked this to a disconnection between the factional focus of much branch activity and the desperate socio-economic plight facing poor communities.

The summit declaration (and it’s worth quoting at some length) stated “these problems reinforce and are connected to the deliberate manipulation and subversion of internal democratic processes…through gatekeeping and the use of money to advance individual ambitions and factions based on patronage and nepotism.”

The declaration went on: “This behaviour is also the entry-point for corporate capture and private business interests outside of our formations to undermine organisational processes.” With the senior ANC and alliance leadership all present, the summit declaration was unanimously adopted. “Those guilty of funding factions and those guilty of accepting money for these purposes must be exposed”, the summit declared.

The summit declaration also refers to corporate capture in the specific context of the SABC. It attributed the SABC’s inability to fulfil its public mandate to “private corporate capture and the virtual monopoly of pay-TV by a single company.”   

Clearly the reference is to Koos Bekker’s media empire. Not all corporate capture is attributable to the Guptas, and not by a long shot. The Guptas are part of a wider ecology, but arguably they constitute the most brazen and the most immediately threatening to our national sovereignty.

A third potential problem with the corporate capture debate is that it might be opportunistically portrayed as, or even become, simply the palace political battles of rival political factions (a “Gupta faction” versus a “Rupert faction”, let’s say). We must not allow this to happen. We need to mobilise the widest array of patriotic forces against all forms of corporate capture. The struggle against corporate capture is not just an ethical struggle. Corporate capture diverts hundreds of billions of rands into private bank accounts in Dubai and elsewhere. It’s money that should be used for job creation, productive investment, or social spending.

We all remember what happened in early December, a cabinet shuffle and three finance ministers in quick succession. This reportedly knocked R500 billion off the rand’s value. But was there more at play? There are indications that, just ahead of this tumultuous December week, somebody (presumably with foresight into the events about to unfold) took a multi-billion rand bet against the currency (technically known as “shorting”).

They borrowed rands to purchase dollars and when the rand crashed they sold the dollars back for rands, walking away with several billions in profit. The same pattern appears to have occurred just over a week ago. Another multi-million rand bet is followed by a leaked rumour about the imminent criminal charging of an incumbent finance minister. The rand tanks and someone reaps another bonanza.

I don’t believe that all politicians, or the executive, or judiciary, or parliament have been captured in their entirety. But let’s not underestimate the dangers and the reality.

Jeremy Cronin is the SACP First Deputy General Secretary and Deputy Minister of Public Works.

This article first appeared in SACP journal, Umsebenzi Online