Independent Online

Monday, August 8, 2022

Like us on FacebookFollow us on TwitterView weather by locationView market indicators

State capture’s revolving door

Recently elected general secretary of the SACP Solly Mapaila giving a message of support at the ANC’S sixth National Policy Conference at the Nasrec Expo Centre, south of Johannesburg, on Friday. South Africa needs a powerful, socialist movement of the workers and poor, with objectives that include tackling the high levels of racialised and gendered inequality, unemployment, poverty, the crisis of social reproduction and the capture of policy direction and regulatory space by the oligarchs who dominate our economy, says the writer. Picture; Oupa Mokoena/African News Agency (ANA)

Recently elected general secretary of the SACP Solly Mapaila giving a message of support at the ANC’S sixth National Policy Conference at the Nasrec Expo Centre, south of Johannesburg, on Friday. South Africa needs a powerful, socialist movement of the workers and poor, with objectives that include tackling the high levels of racialised and gendered inequality, unemployment, poverty, the crisis of social reproduction and the capture of policy direction and regulatory space by the oligarchs who dominate our economy, says the writer. Picture; Oupa Mokoena/African News Agency (ANA)

Published Jul 31, 2022

Share

By Solly Mapaila

The challenges facing our people, the majority being black, working-class and poor, are well-known: crisis-high levels of racialised and gendered inequality, unemployment, poverty, highly exploitative low-wage jobs, the associated crisis of families struggling to make ends meet, to support life itself, which we call the crisis of social reproduction, to name but a few.

Story continues below Advertisement

Someone might appear to be innocently asserting that it is an ideological rehash for the SACP to point out that the systemic problems result from the capitalist system and its endemic crisis.

However, the real ideological rehash is such an assertion itself. This is because it is scientifically verifiable that all the systemic problems are not just the products of the crisis-prone and crisis-ridden capitalist system but also the levers of capitalist wealth accumulation.

It has long been proven scientifically by Karl Marx in his book, Capital: A Critique of Political Economy, that “accumulation of wealth at one pole is… at the same time accumulation of misery, agony of toil slavery, ignorance, brutality, mental degradation, at the opposite pole”.

There are many systemic factors underpinning the situation facing the masses. For instance, almost 30 years into our democratic dispensation, South Africa does not have a state bank that serves the people’s financial needs.

President Cyril Ramaphosa addressed the ANC’S sixth National Policy Conference on Friday. Despite pleas from Ramaphosa, commercial banks did not play ball over a state-guaranteed loan scheme to alleviate Covid-19 distress. This profit-driven conduct is not even in the interestsof broader capitalist and petty capitalist strata, let alone society at large, says the writer. Picture: African News Agency (ANA)

Our people face financial exploitation by profit-driven banking oligopolies. Exorbitant interest rates and other banking charges suppress industrialisation and employment creation, and lock out the workers and poor who want to form co-operatives and SMMEs to uplift themselves.

Story continues below Advertisement

South Africa was a colony of a special type, meaning the colonisers and the colonised lived in the same territory, but which the colonisers segregated according to race and class as they advanced white minority supremacist development based on the racial oppression, class super-exploitation and systematic underdevelopment of the colonially oppressed black majority.

The banking sector remains controlled by capitalist bosses, mostly men. It is untransformed in ownership terms, which is against the Freedom Charter. This is anchored in its roots in colonialism of a special type and is reflected in its continuing conduct. It is disturbing that the government only recently realised this glaring fact.

The class arrogance of the monopoly finance capital was dramatically illustrated when the government attempted to assist SMMEs in the face of the Covid-19 distress. Initially, the National Treasury gave a guarantee of R100 billion to the Covid-19 state guaranteed loan scheme, with the option of increasing it to R200bn if the scheme became successful. Tito Mboweni, the former governor of the SA Reserve Bank (SARB) and the minister of finance at the time the government introduced the state guaranteed loan scheme, revealed – but only after he had left office – that the commercial banks refused to play ball despite pleas from President Cyril Ramaphosa.

Story continues below Advertisement

The banks dispensed only R18.4bn of the potential R200bn to mostly white-owned SMMEs. Meanwhile, badly impacted were mostly black-owned SMMEs, with the banks insisting on the applicants placing at risk as collateral their entire businesses, despite the state carrying the burden of the risk.

The example shows the profit-driven conduct of the commercial banking oligopolies is not even in the interests of broader capitalist and petty capitalist strata, let alone society at large. It also shows who really calls the shots in the incestuous National Treasury – the SARB-private banking monopolies nexus.

This is also another form of state capture. The revolving door between the National Treasury and the SARB on the one side and the banking oligarchs on the other is another entry-point of the capture. This involves officials, ministers and deputy ministers who used to “regulate” the financial sector being appointed by the banking oligarchs to their executive structures or boards at the end of their tenure at the National Treasury or the SARB.

Story continues below Advertisement

A reasonable person can reach no other conclusion except that when they are at the National Treasury or SARB, they conduct themselves in ways that facilitate their future appointment by the financial oligarchs, as their exit strategy.

While the revolving door appointments by the financial oligarchs might appear to be innocent, it will be to our own peril, as a country, to turn a blind eye to the possibilities that the beneficiaries could actively serve the interests of the financial oligarchs when they are at the helm of the National Treasury or the SARB.

This could be one explanation why South Africa has failed to transform the financial sector and build a stateowned bank that serves the people’s financial needs. The same could be true in other sectors. What should we make, for example, of an Icasa (Independent Communications Authority of SA) officebearer who resigns immediately after the controversial privatisation of the high radio frequency spectrum? In the end, where they are going to and where their funding will come from will tell the story.

The capitalist ideology of neo-liberalism, through its policy regime and failures, and state capture are responsible for the multiple crises (including the electricity crisis) the workers and the poor find themselves in.

Both neo-liberalism and state capture, in all its manifestations, must be defeated if South Africa is to realise progress. To achieve this, South Africa needs a powerful, socialist movement of the workers and poor, with its strategic objectives including the urgent task of tackling the high levels of racialised and gendered inequality, unemployment, poverty, the crisis of social reproduction and the capture of our policy direction and regulatory space by the oligarchs who dominate our economy.

Our programme includes pursuing not just one state bank, but overhaul transformation of the financial sector and the establishment of a diversified public banking sector to serve the financial needs of the people, including industrialising our economy and making the right to work for all a priority in monetary, fiscal and international trade policies.

Following its 15th National Congress, the SACP will strengthen its capacity to build such a movement, to strive for policy sovereignty and a revolution in our policy space and the economy.

* Mapaila General Secretary of the South African Communist Party

Share