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Gordhan warns of small, but dangerous voice ahead of Zuma vote

Aug 08 2017 11:50
Carin Smith

Cape Town – “This is an auspicious day for South Africa, as South Africans have to decide which way they want the country to go,” former finance minister Pravin Gordhan said at the opening of an Old Mutual Investments Insights event on Tuesday morning.

He was referring to the vote of no confidence in President Jacob Zuma that will take place in Parliament.

“We must ask ourselves some serious questions, not only about the state of our country, but the state of the world. How do people like most of us want to continue to live in a stable environment? How do you persuade them (MPs) to take a road less travelled?” asked Gordhan.

“Change and human nature are two things that do not go well together. That is where provocation comes from.”

Gordhan said there are many challenges SA is not tackling with enough urgency.

“It indicates a fork in the road. What is this road less travelled? What is the alternative to where we find ourselves in? The financial sector, for instance, has done very well for some people, but not for the many,” he said.

“Inclusivity is a repeated refrain you will hear more and more, especially in SA where the vast majority of people are not effectively benefiting from the economy. We cannot as South Africans remain in a situation where this phenomenon continues.”

Gordhan warned against what he calls “the small but dangerous voice” that speaks of contesting the Constitution and legislative changes in SA.

“It is a small voice that says change the Constitution or some laws, for instance regarding procurement practices. We need to be aware of this and oppose this tendency,” emphasised Gordhan.

Exclusionary economy

A second contestation going on, in his view, is about the economy and the way it is still exclusionary with a small group of very wealthy people - or even those who have jobs - compared to the “outsiders” who are excluded.

Then there is also what he calls “the combination of reckless politics and economic ignoration”.

He believes the other road to be taken would be where some things will still be done the same, but others will be done differently to create a better life for future generations.

A third contestation going on in SA at the moment, in Gordhan’s view, is about what he calls genuine democracy where there is a responsibility to the people. The opposite of that is a captured democracy, which he says is currently a “serious phenomenon”.

How state capture works

Gordhan referred to a recent report on how state capture works: for instance, first the revenue service is targeted, then law enforcement arms and then state-owned entities (SOEs). Top management is removed first and a new top management team - usually at CEO and CFO level – is put in place.

The new CEO then looks at who the "good guys” are at the top and secondary level management and then reasons are found to target them internally, until they decide they have had enough and leave.

“Then the top level is captured and the systematic capture starts,” said Gordhan. “Democracy versus capture is the choice we have to make. It is about an active choice to participate in some way.”

Rent-seeking

The other side of the coin, he explained, is so-called rent-seeking from the business sector’s side and not whistle blowing, but colluding by price setting or paying bribes for government tenders, for instance.

“So let us be frank and say we have to change our business culture as well,” said Gordhan.

“First SARS (the South African Revenue Service) was targeted, then Treasury and then even SARB (the South African Reserve Bank) in recent months.

"The question that intrigued me is how does a Public Protector who is a lawyer come up with the idea that monetary policy needs to be changed – even to the extent that Constitution would have to be changed? Who advises her?”

Gordhan said the proposition he wants to make is that South Africans need to work towards a new consensus to inclusive transformation, and to say the high unemployment levels are unacceptable.

“Millions of young people without jobs are walking around with feelings of hopelessness. That is unacceptable,” said Gordhan.

“SA produces enough food to feed everyone in the country, but yet there is a lot of wastage which is the problem. So no one needs to go hungry, but we need to do things differently.”

Cyril for president

He believes consensus is needed that the economy is not in a good space at the moment and that proactive, inclusive transformation is needed.

“Corporate governance and the kind of ethics being practised need to change to the same extent as ethics in politics need to change, otherwise we will have a lot more of the reckless populism we are seeing at the moment,” said Gordhan.

“The economy, despite challenges, still has a lot going for it, so let us ask how do we build on it and in my view, Deputy President Cyril Ramaphosa is qualified to be president of SA.”

No confidence vote not anti-ANC

Gordhan said it is hard to say how the vote will go on Tuesday, but he is optimistic: "I am (sure) many people have the right conscience and have been trained by the ANC to put the country first – like many generations before.

“But we are talking about human beings. Being in Parliament is an employment and enables them to support a family and pay a bond,” said Gordhan.

“Let me clarify: this is not an anti-ANC move like people are talking about. It is about too much damage by one individual and the people around him. We need to move on - we can’t allow this to continue.”

Inspiring confidence in SA a good start

In answer to a question on what should be done, Gordhan said a start would be to inspire confidence in the country again and having business, labour and government work together like when downgrades were previously averted.

Then he would like to see the current boards of SOEs “kicked out” as he thinks there are still “many making plans regarding resources”.

Lastly, Gordhan said in the past 23 years none of SA’s ministers of finance have ever entertained the idea of going to the International Monetary Fund for help.

“We don’t need an IMF to come and tell us what to do or give us instructions. IMF advice is useful but not to the extent of an IMF bailout,” concluded Gordhan.

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gordhan  |  zuma  |  jacob  |  pravin  |  sa politics  |  sa economy  |  no confidence vote

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