When the concept of “State Capture” came to the fore in the propaganda media early this year, the issue was the dismissal of the apparently incompetent and (if a muckraking magazine is to believed) corrupt Finance Minister, Nhlanha Nene. He was to be replaced by a completely unknown figure, Van Rooyen.
In a sense the Finance Minister is the most important person in the Cabinet outside the Presidency. The Finance Minister determines spending priorities and can therefore decide whether the rich or the poor benefit from government policies, so that if desired, the Finance Minister can actually reverse the intention of those policies. Backed by the Treasury, the South African Revenue Service and the Reserve Bank, the Finance Minister is almost invincible within the Cabinet. So, the only way to change course is to remove him from power, and the only person who can do that is the President.
On the face of it, Nene was not doing anything that his predecessor Gordhan had not done before him. That is, he was pursuing an austerity policy for the poor and the middle class, while shovelling cash into the insatiable maws of the very rich, mainly via the parastatal companies which were the recipients of “infrastructure” money intended to facilitate minerals exports. (Since the overseas market for minerals has plummetted, this was a disastrous investment, but Nene continued to pursue it as if he had no choice. Possibly he was doing it not in pursuit of a mythical return on investment, but because the ruling class wanted him to continue to bankroll them.)
Van Rooyen, however, lasted only a weekend. There was a storm of violent propaganda in the usual agencies. More importantly, big financial interests sold off their holdings of South African currency, causing the value of the rand to collapse and the interest rate on bonds to soar. (It is possible that the Reserve Bank, which is largely privately owned even though its governor is state-appointed, was involved in some of these shenanigans.) The U.S. credit ratings agencies let it be known that Van Rooyen was not an acceptable Finance Minister and that they would downgrade South Africa’s credit rating accordingly. As a result of all this pressure from the ruling elite inside and outside the country. President Zuma removed Van Rooyen from office and replaced him with Nene’s predecessor, Gordhan.
So, why was Nene removed, and why was he to be replaced by someone who did not have any obvious contacts with the ruling elite, of the kind which Gordhan and Nene and their cronies had?
This was the question which has most particularly been avoided ever since last December in the propaganda agencies of the ruling elite. Rather, instead of asking a question, the propaganda agencies have been propagating a myth, plausible on the face of it, ridiculous when one digs a little deeper. The myth is that Nene was fired, and Van Rooyen installed, on the orders of an Indian commercial family with ties to President Zuma’s commercial interests, the Gupta family.
This victory for the ruling elite over the wishes of the government (whatever motivated those wishes) represents a decisive shift in power. In consequence of that shift in power, the myth went into high gear, and the front-man for the myth very rapidly became Gordhan himself. The banking industry, with which Gordhan had always enjoyed cordial relations since the days when he had protected them against taxation when he was Commissioner of SARS, shut down the Guptas’ accounts, essentially making it impossible for them to do business in South Africa. The press, which is controlled by corporate interests which dominate government policy and have done so since before South Africa was a country, denounced the Guptas as enemies of the people, and declared that Zuma and anyone who supported him, or even who endorsed policies which the press didn’t like, was an agent of the Guptas.
The Minister of Finance claims to be defending South Africa against enemies seeking to steal its money — that is, what remains of its money, much of which has lost most of its value under the stewardship of the Minister of Finance and his friends.
Who are these thieves? Apparently, they include ESCOM, DENEL, TRANSNET and South African Airways, all of whom are under attack by the Ministry of Finance for failing to act in a responsible manner, for failing to do as the Treasury tells them. What we are also told is that much of this is not simply irresponsibility, but actual criminality, for these entities are under the control of the Gupta family, a medium-sized business family based in India.
How is it that a (comparatively) small Indian family, hounded out of South Africa and currently lurking in Dubai, whose wealth amounts to a few paltry billions of rands (as compared with the hundreds of billions available for deployment from companies like Billiton and Anglo and even LonMin) could have seized control of the country? Supposedly, they have somehow outweighed those bigger companies in the corruption stakes with Jacob Zuma and his henchpeople. Zuma is supposed to be corrupt and biddable, but apparently he is also committed to supporting Indian people over white people.
Well, perhaps. No actual evidence for it, though.
The people in charge of South Africa’s state-owned enterprises are mismanaging them — often preposterously so; they make blunders which nobody with the slightest familiarity with the issues involved could make out of ignorance. Either they are complete fools – fools of such stature that they make other government hacks look like geniuses – or, more likely, they are corrupt.
Unsurprising; Zuma is corrupt, so why should his appointees not be corrupt?
Logically, then, we need someone who is not corrupt to challenge corruption in state-owned enterprises. And, somehow, we are told that the man who is not corrupt is Pravin Gordhan, late of the “Indian Cabal” in the Natal United Democratic Front, the man responsible for making SARS what it is today, and also responsible for making the South African economy what it is today. And this shining light of competence and probity is portrayed as the man the Empire – that is, the ruling class and therefore all the rest of us who are merely appendages of the ruling class – wants.
This is such a convenient and simple narrative — the bad guys happening to be the people who have supposedly always been opposed by the ruling class, the good guys happening to be the best friends of the ruling class — that it’s hard to believe that there can be much truth in it. On the other hand, if there is a legitimate basis for the decision to dismiss Nene, then why was it not revealed? And if Nene was not tolerable, why should Gordhan then be tolerable? Why be so hard-line one moment, and as soft as butter in a blast furnace the next?
The most likely answer is that the reason for dismissing Nene was that in some way he was interfering with policies which Zuma and his allies supported — for whatever reason. It could be that he was trying to take the side of the established big business which dominates the state against the Gupta interlopers. It could also be that he was trying to undermine the financial stability of the state enterprises, as was hinted at the time — something which also potentially serves big business, which wants to see those enterprises weakened and sold off. It could be that he was doing both to varying degrees, and therefore pressure was put on Zuma to remove him and replace him with someone more pliable. At which point, established big business launched an attack on South Africa’s financial state in order to force Zuma to back down — which he did, but not to the point of reinstating Nene; instead he reinstated Gordhan. Perhaps this was simply face-saving. Perhaps, however, Gordhan was the chosen man of the ruling class, for whatever reason.
Certainly, what has happened since then has been a remarkable outpouring of allegations about the Guptas and the titanic threat which they pose to the state. Apparently they control the Minister for Mines, Zwane, as well as Van Rooyen (who was shifted to Cooperative Governance). One can understand why they would want the Minister for Mines, but why would they want Cooperative Governance? Of course, perhaps they bribed someone to make him Minister of Finance — but then why didn’t that person stay bribed, given the vast amounts (hundreds of millions) which the Guptas supposedly offer as bribes? And if they are giving hundreds of millions in bribes, how can they possibly be making a profit on transactions which are only ten times bigger? For surely they are not only bribing one person; one captured minister doth not a captured state make. We are also told that they have bribed the CEO of ESCOM (who has now resigned, either because he is guilty, guilty, guilty! or because he couldn’t handle being hounded and abused by journalists on a daily basis) in order to do, well, not very much.
What is also interesting is the claims by various people that they were offered ministries. In particular, the Deputy Minister of Finance, Mcebisi Jonas, has declared that the Guptas offered him both the Ministry of Finance and a gigantic bribe to accept the job. (He didn’t mention the fact at the time, but only several months later, once the anti-Gupta campaign was in full swing.) Suddenly Jonas has been elevated to a stardom which he never enjoyed before; he is the Leader of the Good Guys. The fact that if the Guptas are so corrupt, then they must have believed (on who knows what basis?) that Jonas was as corrupt or more so, does not, apparently, matter.
The “State of Capture” report rushed out by the former Public Protector to bolster all this press propaganda is essentially a compendium of media and other allegations, untested and untestable, which is given credence by her previous report on Nkandla (which was carefully tested, within the limits of a body which has virtually no real investigative ability but has plenty of lawyers and accountants who can read documents).
Meanwhile, it is interesting that the ruling class, which has been trumpetting the instantly-impending doom of Zuma for several years, has in recent months turned against their candidate, Cyril Ramaphosa. It will be recalled that the ruling class persuaded Motlanthe to stand against Zuma and then dropped him, because Ramaphosa was prepared to step up to the plate as Deputy President with the endorsement of Zuma and the SACP and the ruling class and the press. After that came the deluge of ruling-class attacks on Zuma in the press, and the denunciation of Zuma by the SACP, and the endorsement of Ramaphosa for President by COSATU. Self-evidently the ruling class had their man in position, and did not seek any alternatives (particularly not the hated Nkosazana Dlamini-Zuma, Zuma’s favoured successor – and, ironically, also Mbeki’s favoured successor).
But recently, journalists have been denouncing Ramaphosa and touting all manner of alternatives – Mkhize, Gordhan, anybody who might conceivably be willing to do whatever he is told by the ruling class. Apparently Ramaphosa the corporate toady is just too independent to be tolerated, or perhaps he is so unpopular within the ANC that he is not considered capable of beating Dlamini-Zuma.
Meanwhile again, in the background, Jonas (who, like Gordhan, is a Communist) has come out to declare that the royal road to saving the economy is by changing labour legislation to serve the interests of bosses rather than workers. (No trade union or leftists condemned him, for he is the hero of the anti-Gupta revolution.) And this, along with selling off the state enterprises and cutting income taxes (recently mooted by the SACP Secretary-General, who wants to increase sales tax instead, thus hammering the poor) is what it’s all about.
This is where the South African left has led us.