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Do banks want a social welfare state or a developmental state that promotes job creation?

Residents in Khayelitsha Site B queue for their Sassa grants. Picture: Tracey Adams

Residents in Khayelitsha Site B queue for their Sassa grants. Picture: Tracey Adams

Published May 2, 2022


The developmental state must play a leading role to regulate banks, retirement funds and insurance companies in shaping and strengthening the structure and output of the economy, says Dr Dennis George, while addressing the Public Service and Commercial Union of South Africa, who argues that the country needs a developmental state and not a welfare one to prosper.

Under the banner of “Racist Banks Must Fall” at a stirring rally in the City of Tshwane on Worker’s Day (May 1), former Fedusa secretary-general, Dr Dennis George, addressed members of the Public Service and Commercial Union of South Africa, painting a desperate picture of the country’s economic landscape, and questioning the role of the banks in building future economic prosperity for the country.

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May Day, also called Workers’ Day or International Workers’ Day, remembers the historic struggles, and gains those workers and the labour movement made over the years, not just in South Africa but around the world. While many take the opportunity to sleep in and put their feet up, for others it is a time of reflection and consideration as to what the future of work might look like.

In South Africa, a traditionally labour-intensive economy, that future is not at all assured. “Workers don’t even want to look for jobs because companies are retrenching,” said George.

Perhaps the single biggest crisis that has seen South Africa arrive at its current crossroads is the wholesale looting and corruption that has taken place across all levels of government and government-led institutions, the depth of which will take years to uncover and recover from, and which the Zondo Commission of Inquiry into State Capture has only touched the surface of.

Addressing the gathering, George laid out some of the more concerning issues to plague the country and the labour force.

“Most state-owned companies are reduced to a shell, with workers feeling the consequences of losing their jobs. Many workers have not received salaries for months, while the economy has been destroyed by unrelenting waves of load-shedding,” explained George.

George also asked what is a rhetorical question: “Where was the ANC when the Guptas took control of important SOEs such as Transnet, Eskom and Denel? Where were they? What were they doing?”

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The depravity of corruption that the South African government has championed is highlighted by the scale of the looting of large sums of money destined to help fight the pandemic – by ministers and senior officials, who had been placed in positions of authority by the very people they are meant to serve.

“Our grandmothers and fathers don’t even want to go to hospitals or clinics because they don’t know if they will be helped.

“It is easy for the government to find resources for fruitless and wasteful expenditure, but we can’t help the poorest of the poor,” said George.

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George is a supporter of a developmental state. He believes it’s necessary if South Africa is to have a fighting chance.

“We need a vibrant, honest and dynamic developmental state that cares for its people and act in their interest.

“Theoretically, a developmental state endeavours to balance inclusive economic growth and social development. The formal and informal, the public and private, white and black businesses, large and small businesses,” he shared with the workers.

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A developmental state uses state resources and state influence to attack poverty and expand economic opportunities.

Banks need proper regulation to ensure economic participation

There is a key role for South Africa’s banking sector too in securing the future of the country – economically – with George calling for a developmental state to play a leading role in regulating banks, retirement funds and insurance companies, to shape and strengthen the structure and output of the economy.

“Banks must be regulated unilaterally for a number of reasons, especially to prevent them from closing banking accounts of specifically black businesses,” declared George, now a successful businessman in his own right.

George was alluding to the current banking scenario in which companies such as the Sekunjalo Group have had their banking facilities terminated, with what appears to be little constructive reasoning, and which has now jeopardised several thousand jobs – a situation the South African economy can ill afford.

George has also been served with notification from these self-same banks, threatening the development of a large photo voltaic plant in Saldanha that George’s company, had secured R1.5 billion investment for, and which would bring much-needed employment to the area.

On how to rebuild the economy, George is clear.

“We need the involvement of all South Africans because it is their economy,” and that includes the banks.

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