Monday, January 29, 2007

Financial Mail - (ANC's) SOUL FOR SALE

The 19 January edition of the Financial Mail had an excellent feature dealing with the corruptive influence of relations between the African National Congress (ANC) and ANC-aligned business people (see link below). I'm afraid it's just another case of 'power corrupts', in this case it deals with the power to award state / municipal contracts.

I've previously referred to the encouraging rise of a black middle class in South Africa, helped along by Black Economic Empowerment (BEE). A corner stone of the latter is affirmative action. It is a necessary evil, which if managed poorly -as it often is- allows for the appointment of unqualified and inexperienced candidates. The pressure on companies to transform in a hurry, as well as dramatic staff changes (i.t.o. racial composition) in the civil service, have led to many such poor appointments. At its worst the incredible economic upward mobility of many affirmative action candidates has led to a culture of entitlement and crass materialism.

This culture of entitlement and materialism features strongly in the article below, although not necessarily described in those terms. Too many officials at national, provincial and municipal level seem to have adopted an ideology of the maximum-accumulation-of-wealth-at-any-cost. In its eagerness to advance BEE the top brass of both the government (cabinet and parliament) and the ANC seem to be reluctant to implement aggressive counter-corruption measures. In fact, most individuals on the ANC's National Executive Committee (NEC), cabinet ministers and their deputies have substantial business interests (personally or through their spouses), often in companies that deal with the state.

The article mentions instances where business people aligned to certain ANC officials have repeatedly won government contracts, with competing tender bids apparently locked out. Where municipalities have instituted 'independent' tender boards it has proven all too easy for politicians and officials to simply manipulate decisions by using proxies within those bodies.

In order to tackle our very serious crime problem in South Africa we need bold intervention on various levels. To my mind corruption in the civil service must be a top priority. Where financial benefit from political connections is not strictly illegal it should become so or be blocked by policy. However, many decision makers in government and the ANC probably has too much to lose.

One can only hope that the ANC's support base will in time become fed up with corruption and nepotism. In the long term I suspect that election shifts will be the most effective measure against corruption. That is, something similar to the recent US midterm election where voters punished the Republican Party not only for its conduct of the Iraq War, but also for corruption.

I'm not necessarily hoping that the ANC should be voted out of government, just sufficiently challenged for it to realise that it does not have carte blanche. As a government you ultimately have to answer to the citizens of your country - not your business buddies.

(Also see a recent posting by Mhambi: BAE and South African government corruption cuts deep)

Financial Mail - SOUL FOR SALE:

By Carol Paton

The African National Congress has traded ideals for influence as the party is corrupted by its members' lust for financial gain. The FM tracks the rot at the heart of SA's most powerful organisation.

It was a cool spring evening when an ambulance screeched to a halt outside the ANC's provincial office in Dutoitspan Road, Kimberley. Paramedics were rushing to the aid of the city's first citizen, mayor Patrick Lenyibi, who had been hit by flying teacups thrown during a brawl in the ANC offices. The first cup hit him on the head. The handle of a second lodged itself deep behind the ear after being smashed onto his head with greater force by a senior ANC member.

From several accounts, the fight, which took place in late 2005, was over a tender to supply coupons for pre paid electricity meters. The mayor is said to have implied that it would go to a group of ANC women, the member's mother included, who had already arranged to be trained to run the enterprise. But instead the tender was advertised, as it should have been, with conditions that cut his mother out of the running.

The blows were exchanged in the office of provincial secretary Neville Mompati, who strenuously denies that the argument was over a tender. Decisions over tenders should be made by neither the mayor nor the ANC but, according to the Municipal Finance Management Act, by officials in the city's tender committee. However, theory and practice are far apart.

Fights over who should get what contract are happening with growing frequency countrywide. It is a matter of embarrassment to the ANC, a party many members proudly think of in terms of its struggle legacy. That legacy is now being severely undermined, and the party seems paralysed.

The ANC, as the party in government, is centrally involved in dishing out tenders and contracts. The introduction of commercial interests is one factor that is undermining its proud political footing. Another is the "deployment" of ANC comrades to business.

This commercialisation has driven a profound change in the nature of the ANC. Once local ANC meetings were all about policies and strategies - the transformation of SA society according to the ideals the party championed for decades. Now these gatherings are frequently preoccupied with business opportunities and who should have access to them.

It's a transformation that wasn't expected. Rather than "transforming the state", as the party describes its goals in official rhetoric, the economy has transformed the ANC.

How did it begin? Trouble started for the ANC almost as soon as it took power, with squabbles over control of provincial structures. But it was only when politicians moved into the world of business that the competition for commercial opportunities began to dominate ANC dynamics. (For the complete article follow link above...)

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