Politics and Money: A Circular Relationship

16th October 2009

In this videoclip, senior researcher at the Centre for Policy Studies Aubrey Matshiqi speaks to Polity's Amy Witherden about the potential negative effect of a confluence of political and business interests in South African politics.

Below is the original opinion piece on which this interview was based

In South Africa, October is a red month. It is a month during which the South African Communist Party (SACP) engages in different campaigns as part of what it calls Red October. This year, the two main campaigns revolve around corruption and the National Health Insurance (NHI) scheme. The focus on corruption is interesting because the SACP was not as aggressive about the issue prior to the 2007 Polokwane conference of the African National Congress (ANC). At the time, President Jacob Zuma was the accused in a corruption trial that threatened to scupper the plans of the SACP and others who wanted to install Zuma as president of the ruling party and of the country.

This notwithstanding, there is a need to examine corruption in relation to its cousin – patronage. In postapartheid South Africa, patronage is facilitated through both the State and capital. The change in the relationship between the ANC and State power after 1994 has resulted in a confluence of political and business interests. This, in turn, has created a circular relationship between politics and money. In other words, access to political power facilitates access to money, and access to money can buy political influence. It is for this reason that we must con- ceive of corruption in its broadest sense because such a conception will alert us to the possible impact of corruption on our democratic institutions and the quality of our democracy.

Therefore, we must be aware that debates about issues such as the NHI scheme, the aborted MTN-Bharti deal and ructions over the suspension of Siyabonga Gama in the middle of the race for the position of Transnet CEO are seldom as straightforward as they seem. Those of us who have partial access to the total reality which defines the dif- ferent sets of interests that are shaping these conflicts might be fooled into thinking that vested political and business interests are not the main problem. We might even be duped into under- mining the role of race as one of the drivers of what seems to be competition between different business interests.

Under these circumstances, our opinions tend to be shaped by actors who peddle partial truths in order to achieve their business goals. The NHI brouhaha is one such example. Are worries about the NHI scheme motivated by concerns that this will impose an additional tax burden on the middle class? Should we buy the argument that opposition to the scheme is based solely on the dismal performance record of our health system? If these are partial truths, then it is possible that vested business interests and a protectionist impulse are the main reasons behind the NHI furore. One hopes that the interests of the poor and destitute, instead of private business and political interests, will determine how tensions over national insurance will be resolved.

What about the MTN-Bharti deal? The truth about how the MTN-Bharti merger was stopped will probably remain elusive in the foreseeable future. This merger would have created the third-largest telecommunications com- pany on the planet and the largest in the developing world. Is it not possible that, within MTN itself, there are some who would have profited more from a merger with a company from the North and less from the MTN-Bharti deal despite the fact that, unlike the Indian market, the North is reaching a point of saturation? Personally, I suspect the outcome would have been different if the benefits had been made a bit more obvious to dominant political interests in the tripartite alliance.

This leaves us with the Gama-Transnet saga. In this one, the benefits were much more obvious to some heavy hitters in the ANC, who are prepared to move mountains to make sure that Gama is appointed CEO of Transnet. The answer lies between two possibly partial truths. First, former Transnet CEO Maria Ramos was an effective turnaround specialist whose work will be undermined by a corrupt Gama. Second, Gama is a victim of a racist business-political agenda that has been perpetrating the lie of Ramos as a CEO who performed business miracles at Transnet. Being the dullard that I am when it comes to matters business, I think the truth lies somewhere between corruption, a destruction of assets and creative accounting.

We all have half truths that we find comforting because they make us sleep better. In the business of politics and the poli- tics of business, you can be sure that the grass is always greener in the bank accounts of politicians and businesspeople who do not obsess over the truth. They know that the truth will make you poor.

Written by: Aubrey Matshiqi