Former finance minister Pravin Gordhan has highlighted that one of the dangers of an unequal economy is that the population could rise up in protest.
He also pointed out that a small clique of people extracting billions of rands from the state was one of the causes of the country’s inequality.
Delivering a lecture at the UJ Convocation Leadership Seminar this week, Gordhan said the global political economy landscape had a number of good case studies that the country could learn from.
“They [the country’s citizens] do not see hope for the future and they don’t see themselves as beneficiaries of all the fancy stuff that’s happening around them. And they are uncertain about their own future, they see migrants coming across the border and allegedly taking their jobs or taking the opportunities their social programmes have to offer,” Gordhan said.
“We then see the population turning against the migrants and looking for quick answers and promises that, in fact, can never be fulfilled, and then all kinds of emotions are generated.”
He warned of the danger of sparking another spate of xenophobic attacks.
“What all of this inequality and the skewed benefits of globalisation are actually demonstrating is what we are beginning to see in South Africa as well – it is what I want to call extractive state capture. In other words, rands, as economists would call it, are being captured by the few at the expense of the many.
“But, far more dangerously, what we also have is the capture of key institutions in the state machinery, which either helps you influence policy direction so that it benefits a few, or ensure that a small clique can actually extract it,” he said, adding that illicit flows of money from the country were rooted in illicit extraction.
“You can have whipping up of emotions under the guise of and inspired by a radical sounding slogan, but, at the end of the day, the radical sounding slogan doesn’t in any way match the reality of the actual delivery,” he said.
Read Fin24's top stories trending on Twitter: Fin24’s top stories