Radical Economic Transformation a state capture tool: report
Kyle Cowan | 2017-05-25 19:24:07.0
Parliament. File photo.
Image by: Anton Scholtz
A report by the Public Affairs Research Institute which has focused on State Capture has questioned the viability of Radical Economic Transformation‚ calling the ANC’s most recent policy catchphrase “unachievable in the framework of South African constitution”.
The 72-page report released on Thursday‚ titled Betrayal of the Promise: How the Nation is Being Stolen‚ details how the Gupta family through various companies and friends‚ including President Jacob Zuma‚ gained beneficial positions from several multi-million contracts with state owned companies.
The report likened this to a “silent coup”.
It details the network of patronage that has allowed the systemic abuse of state owned entities (SOEs) such as Prasa‚ SAA‚ Transnet and Eskom‚ that emerged in Madonsela’s report and a large number of media reports.
Procurement spend in these SOEs has increased dramatically in the past decade‚ a symptom of the abuse.
The research institute has also dismissed radical economic transformation as “a political project to manage the symbiotic relationship between the constitutional and shadow state”.
“At the epicentre of the political project mounted by the Zuma-centred power elite is a rhetorical commitment to radical economic transformation (RET). Unsurprisingly‚ although the ANC’s official policy documents on RET encompass a broad range of interventions that take the National Development Plan as a point of departure‚ what is emphasised by the Zuma-centred power elite is the role of the SOEs and‚ in particular‚ the procurement spend of the SOEs‚” the report reads.
“Eskom and Transnet‚ in turn‚ are the centre-pieces of this strategic focus on SOEs as the drivers of RET. This is because Eskom is regarded as key to ensuring that the nuclear deal happens‚ and Transnet because it is regarded as key to ensuring that the mining industry is captured and the Transnet properties released to a select group of private companies.”
Eskom’s procurement spend between 2010 and 2011 accounted for 8.75% (R74-billion) of the government’s total spend‚ while Transnet accounted for 8.3% (R70-billion) – they are by far the most lucrative SOEs and were therefore targeted extensively.
Their closest rivals were PetroSA and SAA at R12- and R14-billion‚ just over 1% each.
The report calls for a new political consensus‚ to which all future political office bearers must commit.
“Instead of becoming a new economic policy consensus‚ RET has been turned into an ideological football kicked around by factional political players within the ANC itself and the Alliance in general who use the term to mean very different things. Crucially‚ RET is used to give ideological legitimacy to what is essentially a political project to manage the symbiotic relationship between the constitutional and shadow state‚” the report reads.