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Gordhan: SA does not belong to one family

May 22 2017 21:30
Lameez Omarjee

Johannesburg – South Africans are to take ownership of the legacy of the country to prevent it from becoming a kleptocratic state, said former finance minister Pravin Gordhan.

He was speaking at the UJ Convocation Leadership seminar on Monday. He shared insights on the way forward for the South African economy, as well as how state capture continues to erode equality.

“We have a great country to look after. We have to keep reminding ourselves every morning when we get up: ‘This is my country. It does not belong to some family that lives somewhere’,” he said.

Gordhan added that each South Africans have a stake in the country and they should ensure it remains true to the Constitution. “We all need to be active to ensure sovereignty of our country is kept in the hands of the people in South Africa.”

“In South Africa, what we see is extractive state capture or extractive capture,”Gordhan explained. This means key institutions are captured, in order to influence policy direction to "benefit the few" or a "small clique", who are extracting billions without being noticed. Another form of capture is to use natural resources to benefit the few.

Gordhan added that illicit flows arise from illicit extraction. This is when individuals, through politicians, gain control or “significant influence” over key institutions like state-owned enterprises (SOEs) or enforcement institutions.

He highlighted that policy capture is not a uniquely South African phenomenon - using the example from the US where private players are working to undo regulations of the Dodd-Frank Act. “Wilder elements of the West want the reversal of regulatory provisions in order to go back to bad habits…regardless if it results in a (financial) crisis again.”

Gordhan reiterated previous calls from South Africans to “connect the dots” and not to view things as “isolated fragments” in order to gain a better understanding of how state capture is working.

He added that the inclusive character of the economy must be changed, and a new moral authority must be appointed to call out the corrupt and issue consequences for them.

In March President Jacob Zuma removed Gordhan from his post over an alleged intelligence report which claimed Gordhan and his deputy Mcebisi Jonas were trying to undermine the government. Former home affairs minister Malusi Gigaba took Gordhan’s place. However, the move created uncertainty among investors and ratings agencies, two of which downgraded the sovereign rating to junk status.

WATCH: Gordhan explains SA's state capture 

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pravin gordhan  |  sa economy  |  credit downgrade


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