Arms deal jobs ruse

Arms deal jobs ruse

2011-09-18 15:54

Johannesburg - R6.4m. That's how much South African taxpayers could end up paying for each job created as part of the controversial arms deal "offsets" scheme, linked to the multibillion-rand fighter jets deal.

Media24 Investigations, using access to information legislation, has obtained the first full and official account from the trade and industry department (DTI) of the value to South Africa of the Hawks and Gripens deals worth R41bn at today's prices.

International arms manufacturers BAE ­Systems and Saab benefited from these deals.

The details released by the DTI come as President Jacob Zuma this week announced a commission of inquiry into the arms deal, which is now thought to have cost the country more than R70bn and which originally claimed to create more than 60 000 jobs.

The DTI’s figures, however, show that just 6 371 jobs were created in the BAE/Saab programme.

But even the DTI’s official figures are riddled with errors.

City Press can show job numbers have been vastly overstated, that “investments” were actually loans and that supposedly successful projects have disappeared without a trace.

But the DTI figures suggest each job cost South Africa R6.4m, using the R41bn price tag for the planes at today’s prices.

Using the original bill of R15bn for the planes, each job still cost South Africa R2.4m to create.

The return on investment and job-creation promises were a key political selling point to the South African public at the time of the deal, of which the fighter plane component took the lion’s share.

Saab’s role in the arms deal is currently under renewed scrutiny after it was revealed in June that it had been party to more than R24m in payments to government-linked consultant Fana Hlongwane.

This week, one executive involved in an offset deal with BAE/Saab said: “The offset agreement of the BAE/Saab consortium is the biggest smoke screen this country has ever experienced and has pulled the wool over the eyes of taxpayers.”

The DTI figures list 44 programmes involving BAE/Saab, for which the two claimed an offset credit of about R51bn.

These include deals which the government’s own investigations and our reporting have shown to be deeply flawed.

Activist Terry Crawford-Browne, whose Constitutional Court case asking Zuma to launch an inquiry into the deal is thought to have spurred the president into action, said he believed the DTI's claim that more than 6 000 jobs were created was "grossly overstated".

"There is no way of verifying that. DTI comes up with a wish list and nobody can actually investigate it. That has been the pattern right from the beginning because they (DTI) said the contract information is confidential."

Paul Holden, the author of The Arms Deal in Your Pocket, said: "The offsets were presented as ‘the reason’ for the arms deal. The offsets were great for marketing."

But in reality, he believes they had only a "marginal" economic impact.

Holden said the DTI's figure of 6 300 jobs could not be trusted.

"I don't buy those figures at all. They (the DTI) don't aggregate those figures either. They don't indicate if it is 6 000 direct jobs, they don't indicate what sort of jobs have been created... It is a completely meaningless figure and the sense I get is that whatever figures have been reported are completely overstated.

"I'd be very surprised if the offsets created any jobs whatsoever. I think the actual economic benefits are marginal," Holden said.

Requests for comment from the DTI, BAE and Saab went unanswered.

- Reporting by Jeanne Van Der Merwe, Anna-Maria Lombard, Jacques Dommisse, Thanduxolo Jika and Julian Rademeyer


  • 4skin - 2011-09-18 16:30

    What ever results, will not benefit anyone. Why not create 32 worth R200.000 ? instead of funding one job for 6400 000.Zuma is playing foul all the time,why is he ignoring what he is elected to do? which is serving the needy instead of clearing his name? Someone stop this fool.

      4skin - 2011-09-18 16:31

      I meant creating 32 jobs worth R200 000 each.

  • jakethepeg - 2011-09-18 17:26

    Reprinted from the Guardian"In the mid-90s South Africa was negotiating its biggest weapons buying deal ever with a clutch of arms manufacturers. There were those in the ANC and outside who asked why a relatively poor society embarking on the enormous challenge of trying to right apartheid's wrongs was spending billions of pounds on fighter jets, submarines and ships when there was no perceivable military threat. But such considerations were brushed aside as the government offered the - subsequently disproved - claim that the weapons contracts would generate large numbers of jobs. Mbeki was deputy president at the time and headed the parliamentary subcommittee awarding the contracts. Feinstein was the highest ranking ANC member of parliament's public accounts committee that later investigated those deals. He says he came to realise that not only was the arms deal as a whole unnecessary but that it had been infected with corruption as senior officials, including the defence minister, Joe Modise, lined their pockets and the ruling party filled its coffers with what amounted to bribe money. "I do think that it marked a profound change in South African politics in that it was the point at which the interests of Mbeki, his ruling clique and the party became more important than the national interest to the extent that they were prepared to award these contracts where there was absolutely no logic or reason to award the contracts outside of the bribes that were received," he says

  • Sprinkaan - 2011-09-18 17:52

    Did they originally said what type of jobs will be created, because there there are a lot of jobs already created. Laywere, prosecutors, investigator ect

  • AMS-Dammer - 2011-09-18 17:56

    Just IMAGINE how many SCHOOLS, HOSPITALS and Roads could have been SORTED OUT with that amount of Money?????? But do they care???? NO!!!!!!!!!!!!!!!!!!! The Mandela / Sisulu / Modise / Irwin / Sexwale / Yengeni / Zuma / Manual.. etc etc TRUST FUNDS were the only ones to BENIFIT from the SPIN OFF from theARMS DEAL!!!!!!!!!!!!!!!!

      Nasdaq7 - 2011-09-18 18:54

      Freedom but actually enslavement by the ANC government. They will provide you with homes, water and electricity. The queue is 13 million people long. They will also give you a job. That queue is 20 million people long.

  • Jodida - 2011-09-18 18:07

    This is indeed a wonderfull country. I am also desparately seeking a BEE partner looking to start a very profitable business. Must have the following criteria: Must be willing to do "Under the Table deals", must have 20 children into whose accounts we can distribute the bribes into, must be well connected, even willing to build bridges without any qualifications and have standard 4. Not ever willing to accept responsiblilty. ANY TAKERS OUT THERE, might have a friend that will finance our operations, I know the president!!!

  • Rick - 2011-09-18 19:33

    I would rather the ANC spent money on guns and bullets as opposed to the ANC-quality education - It is much safer.

  • Benoexpat - 2011-09-19 05:24

    "............and has pulled the wool over the eyes of taxpayers." Us taxpayers saw this circus unfold and where it was heading to BUT WE HAD NO SAY IN THE MATTER! Everything was decided by a government tragically so far removed from the majority of its citizens as can be! The clowns in the government and their cronies were taken for a nice ride at the expense of the country and all its people. A lot of people should go to jail for this!

  • Danny - 2011-09-20 07:56

    How do you get the uneducated voters to understand that this debacle is what the ANC is all about - robbing the people blind!!

      Teresa Foquico - 2011-09-20 13:54

      Getting them educated... which, with the ANC in Power is likely not to happen!

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