Capture is recipe for recession

08 June 2017 - 08:37 By GRAEME HOSKEN
Ajay Gupta and his younger brother Atul.
Ajay Gupta and his younger brother Atul.

The start of a recession in South Africa can be blamed on the government's lack of honesty, accountability and state capture, political commentators say.

And, governance experts say, the damning revelations in the Gupta e-mail leaks should have South Africans demanding the dismissal of politicians and the launching of criminal investigations.

Richard Calland, head of the University of Cape Town's governance and rights unit, said there was every reason for all South Africans to be concerned.

"It has adverse consequences on the economy," he said.

Calland said South Africa entering a technical recession showed the economic downturn in the past year had been due largely to the fact that confidence in the accountability and honesty of the government had declined rapidly "as more and more information on state capture emerges".

State capture, he said, had profound consequences for the average man on the street.

"It steers public monies, which could be used for social programmes, towards the pockets of a small number who, in the process, conspire with those in fiducial relationships with the voters and boards of state-owned entities."

He said the question now was whether other parts of South Africa's democratic system, which had not been captured, could remain sufficiently insulated to carry out the necessary investigations and, if necessary, prosecutions of those who had captured the state.

"State capture undermines investor confidence. Investors want to see a state that is capable and honest and does what it says it will do. They want to see South Africa's economy not only grow and be well led, but also become socially and economically stable.

"If they see a government no longer capable of delivering on its programmes, because it has been captured by nefarious interests and a shadow state, they are less likely to invest."

Paul Hoffman, of the Institute of Accountability, said South Africans needed to be concerned about state capture, which destroyed the fabric of society.

"This silent coup hits directly at the poor by diverting money away from social-delivery programmes designed to uplift and promote human rights and concentrates power in the hands of those who operate this shadow state."

He said the number of people living in poverty was evidence of the effect of state capture.

"More than half of those in South Africa live in poverty. Human rights is not an airy-fairy concept. They are important to ensure that all our people have access to food, clean water, education, healthcare and housing," Hoffman said.

"This is precisely what is compromised when you take the wealth of a nation and divert it into a slow horse, fast cars, loose living and Dubai. By doing this you make it difficult to develop a state and push it closer to a failed state."