JEREMY MAGGS: Economic inequality, political division and social unrest have all contributed to mounting anxiety about the country’s future. On the programme this week, the chief executive officer of Sygnia, Magda Wierzycka, said we’d crossed the line into becoming a failed state. I want to explore that a little further. Firstly, with Dr Iraj Abedian, founder and chief executive of Pan-African Investment and Research Services and also chairman of Pan-African Capital Holdings. Iraj Abedian, do you agree with that assertion?
IRAJ ABEDIAN: Absolutely not, I sympathise with some of the disappointments and some of the failures, but a failed state has got a specific connotation, a specific picture and look. Look at Somalia, the country is split into three pieces, there is no control over borders, there is no legitimacy to the central government, there’s no constitution, there’s no central bank, there’s no banking system and so on. Other similar global failed state cases are more or less in the same picture.
Is South Africa there? No, but does it mean that we don’t have institutional fragilities? Absolutely not, South Africa has been on the list of fragile states over the past decade, if not longer.
What does that mean, that means the institutional underpinning of South Africa’s constitutional democracy is not strong enough to withstand financial, sociopolitical or global turbulence. That, for me, is the situation we are in and unfortunately over the past few years, as President Ramaphosa called it, the last decade of the (Jacob) Zuma administration, he hasn’t glorified himself to strengthen that underpinning any better, so to speak. Therefore, we remain a fragile state. Nonetheless a functioning state, a democratic state, a noisy constitutional democracy.
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JEREMY MAGGS: I would imagine, Dr Abedian, that that line between institutional fragility on the one hand and the slippery slope towards a failed state could be real, it could happen quicker than we would like.
IRAJ ABEDIAN: Of course, that’s where the concern is, that’s where the expressions of both civil society, political groupings and more recently, and possibly for me very importantly, corporate leadership South Africa coming out, not mincing their words or not being concerned about any other… broader economic and social cohesion.
For example, we had the CEO of FNB coming out very, very openly expressing concern. We’ve had Business Leadership South Africa in a more diplomatic (way) saying the same thing. More recently and very, very openly, which I welcome personally, the chairman of Pick n Pay, Gareth Ackerman, saying stop diverting attention to what the government should do.
I hope that more and more patriotic corporate businesses will come out, openly, honestly but constructively, deal with the issues of fragility of our institutions and the need for getting our growth and constitutional democracy back on track.
Dr Iraj Abedian. Image: Moneyweb
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JEREMY MAGGS: And when business starts to speak with that unified voice, Dr Abedian, it also is the sign of a new red flag, isn’t it?
IRAJ ABEDIAN: Absolutely, I would say beyond a red flag… Unfortunately, small businesses have been a victim of this type of fragility of government over the past 15 years – medium-sized and big corporates have raised red flags in their board and in their strategies and in their capital allocations, or lack thereof, and their inability to invest.
What has happened is they’ve gone beyond red flagging, now they are coming out slowly but surely and guns blazing, putting the government on notice that we can’t have a government situation that does not pay attention to and focus on what the government should do. Luckily, Jeremy, what the government needs to do is not rocket science, it’s basic stuff, doing really basic stuff and focusing on their business, as opposed to focusing on shenanigans or politics.
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JEREMY MAGGS: Do you get the sense that government is heeding the warnings that business is signifying?
IRAJ ABEDIAN: I think if you judge that question by what the government says, yes. Quite frankly, no one can fault what President Ramaphosa says or minister XYZ says. But all of these are at the level of reading their statement that whether they have written of speech writers have written, they’re saying absolutely the right thing for ten years, but they do absolutely nothing, just about, with the exception of one or two cases.
That is where the problem is, our government, our ministers and the machinery of politics, if you like, somehow has become in the culture of issuing a statement and ignoring the commitments. Jeremy, this is one of the important distinctions between a failed state and a failed government.
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JEREMY MAGGS: Finally, you talk about the machinery of politics, Dr Abedian, and one consequence of that is the plunging rand amid this Russia arms sales crisis that we’re dealing with.
IRAJ ABEDIAN: Absolutely, our politicians don’t seem to understand, it’s the twenty-first century, the earth is flat, information is available, and you can’t use your smoke and mirrors of the twentieth and nineteenth centuries.
You’ve got to be transparent, you’ve got to be honest, you’ve got to have ethics in your politics and if you don’t, if you cut corners, it’s a matter of time before you’re caught.
So, there’s really in the language of economists and statisticians there are declining degrees of freedom for governments to do and to govern in the old ways. They’ve got to learn to do new ways of governing in the global technological stage, that everything is open, even when you have a secret meeting.
Naïve politicians
So that is where our politicians are being naïve and they try to cover up things and when they say one lie, then they have to say 100 more lies to cover the first lie and then they’ve got themselves into a knot that nobody can get them out.
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JEREMY MAGGS: Let’s push this a little further then, as we’ve just heard, one of the primary issues facing South Africa is the persistent economic inequality, which remains a stark reminder of the country’s troubled past. This unequal distribution of wealth, limited job opportunities and a struggling education system, among others, have led to frustration, disillusionment among large sections of the population but at what point does this tip us into a failed state?
‘It’s idle talk about South Africa becoming a failed state,’ says Moeletsi Mbeki, political economist and commentator. Image: Supplied
JEREMY MAGGS: With me now on the same theme is political economist, Moeletsi Mbeki. Moeletsi, welcome to you, you’ll tell us there’s a difference between a failed state and a simple failure of democracy.
MOELETSI MBEKI: Yes, the gentleman called Claude de Baissac, I’m sure you have seen he has been writing, he is the one that has popularised the notion that South Africa is heading towards becoming a failed state. He has talked extensively in the media about this issue.
For me, the poster boy of a failed state in Africa is Somalia. South Africa is not a failed state, it’s a failed government.
The ANC government told the country it was going to achieve certain objectives and it has failed to achieve those objectives. So it’s not the same as what happened in Somalia, where the central authority in Somalia disintegrated, the country broke up into three pieces and some of the pieces have been in civil war since 1991 when the central government in Somalia collapsed.
There’s no collapse of central government in South Africa, there’s actually no real risk of collapse of central government in South Africa. So, what we have is we have an elected democratic government, which is out of its depth, it’s unable to cope with the challenges that it’s faced with, especially the economic challenges. So it is a failed democratically elected government, it’s not a failed state like Somalia.
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JEREMY MAGGS: Moeletsi Mbeki, is there a fulcrum point though, where a failed government can tip into a failed state and if so, what is that point and how close could we be to it?
MOELETSI MBEKI: We can speculate until the cows come home. Is South Africa heading for a civil war, can South Africa have a civil war. The starting point, obviously, is a civil war for a failed state. I don’t think South Africa is heading for a civil war, I can’t see a civil war in South Africa. Sudan, I could predict a civil war in Sudan, they had two armies to start with and even before the two armies, part of Sudan broke away into South Sudan and the other part was breaking away into Darfur.
So you can predict when a country can fall apart. South Africa, there are no ingredients for the collapse of central government, there are no… movements in South Africa. It’s idle talk about South Africa becoming a failed state.
JEREMY MAGGS: Moeletsi Mbeki, if you have people in the business community who are starting to have that conversation, whatever the definition is, it does signal though, that there is increasing concern within that community about the state that South Africa finds itself in right now.
MOELETSI MBEKI: Absolutely, there’s huge concern about the state which the country finds itself in, but this is the result of the failed policies of the ANC government and some of the private sector companies have contributed to the policies of the ANC government. For example, the policy of Black Economic Empowerment, which is the main driver of corruption in the public sector, was one of the architects of it was Sanlam.
They are the ones who sold the country on the policy of Black Economic Empowerment, and they sold the policy of Black Economic Empowerment on the ANC government, and the ANC government turned Black Economic Empowerment into government’s policy. So the private sector is not innocent of the problems that the country is facing. I’m not saying all the companies, I’ve given an example of a specific company that has been responsible for a policy that is one of the main drivers of corruption in our society.
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JEREMY MAGGS: Moeletsi Mbeki, just finally, if I can get a quick view and it’s an associated issue, on the Russia arms sales allegations, I’m wondering how much credence you’re lending to the statement by the United States Ambassador to South Africa, and the talk around it anyway, what’s the impact on South Africa going to be on the global stage?
MOELETSI MBEKI: Well, there’s only one way that the South African government approved the sale of military equipment outside the country, it’s through a committee, which is called the National Conventional Arms Control Committee (NCACC), which is chaired by the minister in the president’s office and all these senior ministers in government sit on that committee, including the Minister of Foreign Affairs, the Minister of Defence, the Minister of Public Enterprise and so on.
So there is only one way that the government formally approves the sale of weapons.
Now, this committee reports to Parliament and if you look, it keeps minutes. If you look at its minutes between February last year, when the Russians invaded Ukraine, and today, the minutes will tell you whether this committee met and approved the sale of weapons.
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If you’ve seen their minutes, it will be there. If it doesn’t appear in the minutes, then you have the (case) which is illegal sale of arms to foreigners by maybe Denel on its own, Armscor (Armaments Corporation of South Africa), the army itself, so then you can investigate that. But a formal government approval of the sale of arms.
The president should not be appointing judges to investigate… he should just look at the minutes of the National Conventional Arms Control Committee.
If they approved, it will be in the minutes. If they didn’t approve, it will be in the minutes.
JEREMY MAGGS: Moeletsi Mbeki, thank you very much indeed.
