It's wishful thinking to believe greater state involvement will help the economy, unless corruption is eliminated first

Two months ago the Financial Times published an editorial expressing views not traditionally associated with the business-oriented publication.

Where cabinet ministers conduct themselves in ways that seem at odds with our national goal, President Cyril Ramaphosa has a duty to relieve them of the responsibilities to lead, says the writer.
Where cabinet ministers conduct themselves in ways that seem at odds with our national goal, President Cyril Ramaphosa has a duty to relieve them of the responsibilities to lead, says the writer. (Jairus Mmutle / GCIS)

Two months ago the Financial Times published an editorial expressing views not traditionally associated with the business-oriented publication.

As the Covid-19 pandemic forced economies around the world to shut down, the newspaper called for radical economic reforms that would help the UK survive the crisis.

"Governments will have to accept a more active role in the economy. They must see public services as investments rather than liabilities, and look for ways to make labour markets less insecure.

"Redistribution will again be on the agenda; the privileges of the elderly and wealthy in question. Policies until recently considered eccentric, such as basic income and wealth taxes, will have to be in the mix," the newspaper said in its editorial.

The sentiments were in line with what has been happening in the northern hemisphere and elsewhere in the world ever since the crisis started. Many governments are playing more active roles than usual in their economies as they seek to minimise the damage being caused by the pandemic.

President Cyril Ramaphosa is not out of step, therefore, when he argues for a greater role for the state as SA prepares for life after Covid-19. Many of his counterparts around the world are speaking the same language.

"I have often said we need to look at the post-Covid economic landscape as equivalent to a postwar economic landscape. The state has to play a critical role," he told parliament during a question-and-answer session this week.

"Any postwar situation must be state-led. The state must set policies, give direction, and the state therefore is called upon to look at how the market is functioning or structured," he added.

But unlike his northern hemisphere counterparts, whose governments are well-oiled machines with the capacity to deliver efficiently on major projects and to drive economies, Ramaphosa presides over an administration that needs fixing itself.

The woes of SA's state-owned enterprises are well documented and there is no need to spell out their failings once more.

But a couple of incidents in recent weeks have served as reminders that an ill-equipped state, especially at leadership level, can itself be a hindrance in the battle against a crisis as overwhelming as the Covid-19 pandemic.

The woes of SA's state-owned enterprises are well documented and there is no need to spell out their failings once more

On June 12, the Eastern Cape government launched what it believed to be a brilliant plan to extend health care to remote parts of the largely rural province with motorcycle sidecars modified as ambulances.

The whole affair turned into a major controversy after it was revealed that the provincial government had paid R94,000 for each motorcycle when the going price in the market is about R18,000.

Eastern Cape officials and the company that provided the vehicles defend the price tag, arguing that the R10m bill for 100 motorcycles was justified because they had to be fitted to make them usable as "ambulances".

Then this week it emerged that the KwaZulu-Natal government paid R28,000 apiece, including delivery and installation, for 5,000l water tanks that are urgently needed by rural schools. The tanks go for as little as R5,000 at major wholesales.

Some of these water tanks that have been installed have not been filled, so they have yet to make any difference in terms of improving sanitation for school children and helping prevent the spread of Covid-19.

In a country where cynical opportunists see major crises as chances to steal from the poor, it is no surprise that some are crying corruption over these apparently inflated prices.

If government officials and their friends could use the solemn occasion of Nelson Mandela's funeral to steal millions of rands, why would the public not believe that state officials are corruptly benefiting from funds set aside to fight Covid-19?

After all, a few weeks ago local government councillors were stealing food parcels meant for the poor and handing them out to their friends and supporters.

As Ramaphosa seeks to use the state to drive SA's recovery from the economic crisis that has been exacerbated by the coronavirus pandemic, he'll have to come to terms with the reality of this perception, which causes many a citizen to be suspicious of the state and its programmes. He'll have to purge his administration and the civil service of all the bad apples who see only opportunities to loot, rather than to serve.

The National Prosecuting Authority and the Hawks took an important step in that direction this past week when they finally brought to book some of those accused of looting the VBS Mutual Bank.

The bank was not a state-owned entity but what happened there is symptomatic of what has become the prevailing culture in too many of our institutions, public and private. This culture took root largely because there was no sign of action against any wrongdoers.

We need to see more arrests of the kind we witnessed this week. It is only when everyone knows there are serious consequences for corruption that the state will be liberated from the criminal syndicates that make it an unreliable instrument for driving recovery and change.


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