Mbeki set up trough for JZ's cronies to feed
“State capture” is a euphemism to describe a situation in which the narratives, the direction and the value system of a society, including patterns of accumulation, are under the control of an elite group. A World Bank discussion document defines it as the “efforts of a small number of firms (or such groups as the military, ethnic groups and kleptocratic politicians) to shape the rules of the game to their advantage through illicit, non-transparent provision of private gains to public officials”.
The ANC’s policy of black economic empowerment (BEE) under former president Thabo Mbeki was carried out in a way that sought to exert control on the state, its value system and its grand narratives. One cannot just accumulate and push for a project such as this without adopting the necessary narrative through which such projects are justifiable and defensible in the eyes of the public.
Transformation is a legitimate objective. Transformation of the private sector is a more specific way of going about this. The rhetoric of transformation was amplified by ANC policy thinking under Mbeki. After all, it is essential that the end of apartheid meant the end of domination by a small section of the population in the economy and other areas of life.
In practice, for the ANC, transformation means capturing the state by creating a sympathetic business elite who will assist the party to further influence the direction, values and narratives within and of the state. A reading of Marxist theory shows that business elites within the state often behave in the same way, even if they were created for a different purpose.
For example, by creating new black elites through the state apparatus, the ANC has ended up with the classic problem of a business people class whose creation does not benefit the public or the country as a whole. Even worse, the creation of the BEE class increased the appetite of interest groups to capture the state for their own interests, and not to further the ANC’s transformation imperatives.
When Mbeki’s administration came to an end, a new group of elites came to dominate the ANC. Like those before them, they wanted a turn at the feeding trough.
By the time Zuma took over as president of the ANC, perceptions of BEE were changing. The suspicion was setting in that it might not improve people’s lives. Zuma had to deal with an angry and disillusioned nation.
Mbeki presided over state capture, but his style of engaging with the public did not push the ANC onto the defensive about who was attempting to capture the state and for what purpose. Mbeki himself would probably have pointed out that the state was already subject to capture from foreign and white capital. He would defend his project as the freeing of the state from the control of interest groups.
Zuma has tried this explanation, but it has not worked for reasons that have to do with his personal lack of credibility and not-so-convincing skills as an interlocutor. His shot at state capture has merely ushered in a less sophisticated and more abrasive episode of a phenomenon that was underway long before he took over as president. Mbeki was so crafty that there was not even a public debate about state capture. Instead, the issue was that he centralised power in his office and was not consultative.
Under Zuma’s leadership, it has become clear that the state is being captured to further the interests of his family and his friends, including the Gupta family. The ANC, at least under Mbeki’s leadership, probably did not foresee the possibility that its attempts to retain control of important parts of the state to achieve its policy goals could be interrupted by other forces. The Zuma years have highlighted the reality: the ANC could be used to capture the state in the interests of a few connected individuals.
Previously, the idea of state capture was seen as something that could only be perpetrated by Western businesses acting in the interests of foreign powers, such as the United States and Britain. This idea preoccupied the ANC and its alliance partners to a point where it shut it’s eyes to the reality – the ANC itself can be subject to state capture.
Perhaps Zuma was unlucky in that his administration coincided with the end of the Mandela glory days.
It could also be that Mbeki’s administration, its policy implementation and worldview about politics, including race relations, accelerated the end of the glory days and created the space for the emergence of a brand of politics dominated by mistrust.
What can be said with certainty is that Zuma’s conduct has justified the public suspicion of politicians, and has consequently raised the public’s demand for accountability on the part of government. Zuma’s administration – particularly his aggressive distaste for accountability – naturally drove institutions such as the treasury to define themselves against the looting of state resources by Zuma’s cronies.
Under Zuma’s administration, the brazen nature of corruption and the violation of rules of accountability have resulted in a situation where state institutions have to take a stand either against or in support of his project. Under Mbeki, the battle was not as openly declared, and Mbeki’s diplomatic nature and evasiveness allowed institutions to remain relatively neutral towards his project.
Zuma inherited Mbeki’s treasury, and he is working hard to convert it.
This has pushed the treasury to take a position, with Finance Minister Pravin Gordhan accelerating his crusade against Zuma and corruption in general.
In December 2015 Zuma’s attempt to rein in the treasury by appointing his ally failed and he was forced to make a U-turn by bringing back Gordhan, who seems to enjoy a good relationship with the markets.
It is naive to think that Zuma would give up in his attempt to install a different minister at the treasury. The president is aware that perseverance is required to complete his project of capturing key government institutions such as the treasury. Gordhan’s position as finance minister is untenable, given that he is openly at war with the president.
Ministers serve at the pleasure of the president. It seems that Zuma feels the markets hold him to ransom when it comes to exercising his executive privilege to decide who serves in his Cabinet. Gordhan is a market minister, and Zuma wants his own man in that position.
Realising that his return to the finance portfolio has propelled him to stardom, Gordhan has used his position to his advantage. Unlike Zuma, Gordhan has the markets in his corner and he is an expert in using the media to build the image of someone who is protecting state resources against the depredations of Zuma and his allies, including the Gupta family. Zuma’s strategy is clearly to isolate Gordhan.
The main reason Gordhan continues to hold as one of the remaining obstacles to state capture is Zuma does not want to upset the markets in the way he did when he fired the finance minister, Nhlanhla Nene.
The concern in the ANC, despite divisions that may exist in the party, is that it is too risky to engage in fights on too many fronts at the same time.
Through his capture of the ANC, Zuma has a good opportunity to reformulate the debate on state capture, and to ensure that the ANC appears to be a victim in an environment dominated by foreign capital and local collaborators.
In his route towards ensuring the capture of the state, Zuma first had to capture the ANC, a task he accomplished well.
To capture the state, it is necessary to bring key institutions into alignment. Capturing a political party ensures there is no political recourse against those who seek to capture the state.
Capture of the criminal justice system ensures there are no meaningful investigations into corruption and the diversion of state resources.
This is a complex project that involves different battles along the way.
Ralph Mathekga is a political analyst and commentator. This is an edited extract from his book, When Zuma Goes, published by Tafelberg