Is South Africa a ‘captured state’? The anatomy of a captured state

The state is the highest concentration of political power; hence state power is a fiercely contested phenomenon in any society.

In liberal democracies contestation for state power is done by both conventional and unconventional means.

The conventional way is through universal suffrage which gives rise to political representation. Central to the conventional way is fierce contestation for electoral support by various political parties with different ideological permutations.

Then there are the unconventional ways of contestation and acquisition of state power, which are not openly governed by any prescribed rules, systems or disciplines.

The unconventional acquisition of state power is a product of informal manoeuvrings by dominant interest groups in society, which enjoy an advantage of being in a close proximity to those in power.

This is what is disparagingly referred to as state capture, and is the primary focus of this article.

Recently there has been a rash of commentary in the public space alleging that South Africa is a captured state. One such is that by former Business Day editor Songezo Zibi, titled “UNEMBARGOED: The state has been captured (December 14, 2015) published following the removal of Cde. Nhlanhla Nene as Minister of Finance in December 2015.

Judging from its popularity on social media channels (5017 Facebook likes, 838 dislikes and 3911 comments) it would appear many seemed to agree with the writer.

More recently, Lily Gosam in the Rand Daily Mail (March 07, 2016) posited that the removal of the former Finance Minister was “Zuma’s palace coup of government”.

Another article the Daily Maverick (March 10, 2016) titled “State capture: Did the Guptas offer Treasury’s top job to Deputy Minister Jonas?” in a similar vein alleged the Gupta family approached and offered the position of Minister of Finance to Deputy Minister Jonas before former Minister Nene was fired. The writer goes on to assert a number of claims made in the public space, such as that the then newly appointed Minister of Finance, Des van Rooyen, arrived at the National Treasury with unknown advisors who turned out to be Gupta associates.

In March this year the then Deputy Minister of Finance confirmed some of these allegations to in fact be true. The Gupta family however roundly denies the allegations and has claimed they are part of on-going factional battles in the ANC.

This subject continues to generate massive interest in the country. The graphic depictions of ‘state capture’ in the abovementioned articles has triggered a number of conversations, some of them passionate, on social media platforms.

At a more academic level, the South African Communist Party (SACP) in its discussion document Going to the Roots – towards a radical second phase of the NDR (2014) cautions the broader Alliance movement on the corporate capture of the state by individuals or individual corporations in competition for tenders.

The authors of the discussion document are of the view that the debate on state capture is on the political radar both within and outside the ANC.

Similarly, the Congress of South African Trade Unions (COSATU) in its 12^th National Congress of 2015 pertinently warned about the interplay of ‘dirty money’ and political influence within the state.

COSATU further cautioned on the deleterious and debilitating impact this might have on the capacity of the state.

ANC policy documents do not make any specific reference to state capture per se.

However, the Strategy & Tactics of 2012 in identifying emergent challenges for the organisation warns about the adverse impact of corruption on both the stability of the ANC and the state.

The ANC’s January 8 statement of 2016 also issued a stern warning on the use of money as a means to influence the direction of the organisation both on policy and leadership matters.

A historical context to claims of state capture is necessary, considering that South Africa is not the first or last modern state to be confronted with such claims.

The latter half of the 20th century has seen a long list of states being characterized as ‘captured’ – many of them in developing countries.

The DRC under Mobuto SeseSeko, Nicaragua under Arnoldo Aloman, Peru under Alberto Fujimori, Nigeria under Sani Abacha, Indonesia under Suharto, Serbia under Slobodan Milosavic, Haiti under Jean-Claude Duvalier and the Philippines under Ferdinand Marcos are just some examples.

Naturally, whether they do in fact fit the definition of captured states is subjective. However, all these states had two common features.

Firstly, the immense growth in the wealth of dominant private interests (captors) and well-connected public officials.

Secondly, a pronounced disarticulation of the broader societal interest that resulted in widespread poverty and underdevelopment.

As always, definition is key. There is intense scholarly interest in the notion of the captured state across the globe, resulting in many definitions – with some of them being complex to a point of incomprehensibility.

To simplify this notion some writers embarked on empirical studies to investigate state capture by developing a ‘state capture index’ to measure the extent of capture of the state.

This resulted in a typology of three forms of captured states that is prominent in the literature – the occasionally captured state, the partially captured state and the fully captured state.

The occasionally captured state is when there are occasional deviations to benefit the private interest and public officials.

Partial capture is when there are high averages of corrupt contracts and activities but this is not the norm and the state is in the main focused on achieving its developmental objectives.

Full capture is when high levels of corruption directed by the dominant private interest represents the norm, and the developmental agenda is subordinated to corrupt exchanges.

This article is an attempt at working towards a ‘user friendly’ definition of state capture: namely a systemic political rot in which private interests significantly influence the state decision-making process to their own advantage through unusual and unconventional channels.

This influence is never overt, as the public officials are positioned as clandestine agents to their principals (captors).

This article aims to briefly highlight the anatomy of state capture, its impact on the nation-state and to respond to the question of whether South Africa is in fact a captured state.

I would argue that South Africa is not a captured state.

Primarily because the incomparable levels of commitment demonstrated by the ANC government to improve the socio-economic profiles of South Africans is an antithesis of the notion of a captured state.

I would also argue that state capture is not an event but an incremental process. As a result, revolutionary vigilance is of utmost importance, to detect state capture practices and to boldly confront subjective weaknesses that are catalysts to the capture of individual public officials or the state.

The motivation for writing this article clear: because any  perception of state capture in South Africa is fatally detrimental to the programme of building a National Democratic Society.

The fundamental question we are to confront is whether economies in transition, like South Africa, are the most susceptible to state capture.

Historically, one of the main challenges posed by the programme of transition from apartheid to a prosperous democratic society was to redefine how the state interacts with capital.

In the Strategy & Tactics this relationship is defined as one of “unity and struggle”.

Little attention was paid to the flip side of the relationship, which is how capital can influence the state: what the SACP terms the “interface between the capital and the state” and in particular, how capital exerts influence on and colludes with public officials to extract advantages.

Generally, scant attention is afforded to how capital exerts influence on the state in transitional state economies, and the way in which being a transitional economy makes it easy for the public officials to shape rules to the advantage of the captors – with considerable and devastating social cost.

Hellman and Kaufmann (2001) argue that the most pernicious and intractable problem of economies in transition is oligarchs manipulating state decisions to extract substantial economic advantages.

They developed a risk matrix of “low capture group” and “high capture group”.

They argue that the “high capture group” are states undertaking massive political and economic reforms such as the introduction of new political systems, building of new political institutions and liberalising their economies.

They further argue that state capture is lower in developed countries with systematically reformed economies and adequately developed institutions of accountability; this is what they classify as the “low capture group”.

The argument that states in transition have a high risk of capture is plausible in many respects.

Post-colonial states are politically and economically unbalanced and predisposed to inherent contradictions, not least of all the very artificiality of the post-colonial state rooted in the common sense of colonialism. The nature of transition undertaken in post-colonial states essentially entrenches this artificiality through a process of cosmetic changes that keeps the structure of the colonial state intact.

In many post-colonial countries these contradictions are mitigated through co-option of the political elites, who were once victims of the oppressive past, into the sewn-in colonial appendages of the post-colonial state.

For Nosko (2014/2015), state capture is another name for corruption. He argues that while corruption reflects moral failure of individuals, state capture is a systematic failure which occurs in a country without effective and functioning checks and balances.

In these countries capture of the state and important industries are a norm – because as deficiencies and loopholes in the law are utilised to ensure impunity for the benefit of the captor and its networks.

This amplifies the argument that economies in transition are “high capture groups” as most such states are undertaking institutional reforms and lacks adequately developed systems of checks and balances. Furthermore, in the process of undertaking massive institutional reforms there are many blind spots, which are opportunistically used by capital.

In summary, state capture is a real threat in two circumstances.

The first is in countries emerging from authoritarian regimes with fledging transitional governments that are undertaking massive economic liberalisation measures.

The instability and imbalances of post repressive years leads to skilful exploiters seizing control of state power.

Secondly, in countries with inadequate systems of checks and balances due to poorly developed political and administrative institutions.  The visible consequences of such deficiencies in systems of checks and balances are widespread corruption and unusual ways of exchange.

The next question to be asked is what the defining attributes of a captured state are.

Central to state capture is the strategic penetration of executive institutions (cabinet) by the dominant private interest, which results in a reallocation of budgeted funds and the milking of state enterprises.

Budgets mean little to a captured state, both in terms of fiscal discipline, allocation or expenditure. Budgets are always exceeded and when the ‘need’ arises, money is simply taken.

In Haiti for instance during the rule of Francois Duvalier, funds were routinely and casually transferred from one budget item to another according to whim. Development projects literally came to a halt.

The other avenue that captured states use to siphon off funds is state owned enterprises (SOE). Most lucrative is presumably when the SOEs are given monopoly privileges.

Ferdinand Marcos in the Philippines created monopolies in sugar and coconuts that channelled funds directly to his captors. The Marcos era saw a proliferation of SOEs with some exempted from auditing control through presidential decrees. Similarly, in Guyana, Forbes Burnham nationalised a number of foreign-owned companies in the bauxite and sugar sector gaining control over more than two-thirds of the total export revenue of the country, which was used as payment to captors.

The ultimate outcome is disorientation of the state, which includes the subjugation of the developmental goals intended to improve the quality of life of the people.  The strategic penetration of the executive institutions can be a direct consequence of a number of factors, such as:

• Capture of the public officials by the private interest: Leaders of political parties, particularly governing parties, have immense influence on the strategic direction of the state. In most instances the influence they yield on the state is unmediated as it happens through informal channels and there are no formal checks and balances. The state in South Africa is the largest procurer of goods and services and any influence on the direction of the state can be easily converted into monetary gains.
• The ANC Strategy and Tactics succinctly reflects on this negative subjective development, which includes abuse of state resources and factionalism. These developments serve as an entry point that the captors use to gain illicit influence and advantage. Capture of individual public officials may result in occasional or partial capture of the state, which might serve as a beachhead for full capture of the state.
• Capture of the governing party by the private interest: Capturing of the governing party is closely related to capturing of the public officials. However, this form of capture is distinct in that the entire organisational infrastructure and systems are captured by a private interest. The organisational activities are mobilised around defending the captor’s interests to the extent that the continued independent existence of the organisation and the captor’s interest are intractably interwoven.  The entire organisational machinery is designed and mobilised to secure the captor’s interests. A highly factionalised governing party is a highly susceptible capture, as factional activities are resource-driven. Capture of the governing party is likely to result is full capture of the state, as opposed to capture of individual public officials.

The penetration of the executive by a private interest results in disarticulation of the broader societal interest and dereliction of the developmental goals. The state becomes weak and indecisive, as captors must ratify the state action. Institutionalised grand corruption defines the conduct of the state as public procurement is directed at serving the captors through rent-extraction logic. This logic is rife as unusual techniques are systematically used to restrict broader access in order to recurrently benefit the captors.

The central feature of a captured state is disarticulation of the broader societal interest, which in post-independence states perpetuates the socio-economic prejudices of the colonial past.

When the state is captured by a private interest, it loses its autonomy to act in the public interest; as a result, people lose confidence in the state.

Out of disbelief, the people are left reeling as they try to make sense of what has happened. This results in collective national trauma, which can be described as an event or a series of events that significantly disrupts the normal routine of a nation-state.

As the nation tries to make sense of what took place episodes of anger, irritability, withdrawal, dislocation and other associated maladies take centre stage.

To improve the understanding of collective national traumas, my late mentor and friend, Professor Ridwan Laher, separated collective national traumas into two types.

The first type is an acute trauma and it is defined by its relatively short duration. One example would be the trauma that came with the passing of Comrade Nelson Mandela the father of the nation.

The South African nation was shocked in collective terms but as the weeks passed the pain subsided as people began to make sense of the loss and resolve to move on with their lives.

The second type of trauma is described as collective chronic trauma. This type of trauma, unlike the acute, is due to a permanent disruption of the socio-political and psychological life of a nation.  It is a collective trauma because it cannot be ignored and its consequences are shared across the nation. European colonialism in Africa can be described as chronic collective trauma that has permanently disrupted the normal routines of African people. State capture by political elites after decolonialisation in countries like Democratic Republic of Congo and Nigeria perpetuated the collective chronic trauma.

The enduring nature of collective chronic trauma means that it cannot simply be swept under the carpet but requires remedial redress. Such redress requires a bold confrontation of any attempts to capture a state or perceptions of state capture. As failures to confront state capture or perceptions thereof result in disenchantment of citizens, lack of confidence in the state and spontaneous upheavals and mass protests that threatens the stability of the nation-state.

The trust deficit in the state further propels self-help mechanisms by citizens.

Vigilante groups are formed to swiftly deal with suspected criminals, as there is little trust in the captured criminal justice system.  Communities become restless and when there is, for example, a water blockage the community embarks on a protest, burns down the library, municipal offices or the roads because the community does not trust the captured public officials in the municipality to resolve the problem.

There is thus a high disregard of laws and cabinet directives, as the citizens perceive these as strategic manoeuvrings of a captured executive or parliament to benefit the private interest and its lineage in the public sector.

The impact of a captured state is collective chronic trauma that can shake the foundation of the rule of law and threaten both the political and economic stability of the state. The stability of the state is essential for any project aimed at building a developmental state and to ensure redistributive growth of the economy. Construction and reconstruction of successful developmental states in post-colonial societies is crucial as it is unreasonable to expect that independence will automatically foster a state where the concerns of the poor citizens would be in the mainstream of policy attention. State capture on the other hand traumatises the society as the broader societal interest is relegated to the back burner.

As mentioned above there are accusations being made that South Africa is a captured state.

To fairly engage with this accusation, it is important to first consider the defining attributes of a captured state.

This article argues that central to a captured state is a pronounced disarticulation of the broader societal interest. This raises the question of whether there is disarticulation of the broader societal interest in South Africa.

In responding to this question it is compelling to note that one of the key strategic objective of the ANC is building a democratic developmental state.

The ANC’s Strategy & Tactics restrictively highlights four attributes of such a state, namely:

• Its strategic orientation is premised on people-centred and people-driven change.
• It takes the lead in the defining and articulating the common national agenda.
• The state’s organisational capacity to facilitate the realisation of the set agenda.
• The state has technical capacity to translate broad objectives into programmes and projects and to ensure implementation.

The attributes of a developmental state as conceptualised by the ANC stand in stark contrast to a captured state.

A captured state is a paralysed state, with no real ambitions to embark on any significant developmental agenda, where the bureaucracy merely serves as a conveyor-belt for the captor’s interest and the political leaders of the state serve as clients of the captors.

In the past twenty-two years the ANC government has energetically and ambitiously embarked on extensive programmes of social transformation that has dramatically improved the socio-economic profiles of many citizens, particularly the poor.

In the past twenty-two years, growth and employment has improved, despite the setback of the 2008 global recession. The state has taken bold steps to diversify the economy and build an industrial base with greater emphasis on labour-absorbing employment.

Such achievements are an uncommon sight in a captured state and this renders far-fetched any argument that there is pronounced disarticulation of the broader societal interest by the state in South Africa.

The term of President Jacob Zuma has been subjected to worst and severe accusations of being a captured state.

It is during the same period that more than R 1 trillion was spent on social and economic infrastructure targeting poor and rural communities.

During the same period the economy gained more than 1 million jobs and employment in the country is now higher than it has ever been.

This contributed to the increased number of South Africans with access to banking services from 69% in 2009 to 75% in 2013. The amount of money available for student bursaries has been doubled thereby benefiting hundreds of thousands of deserving students in universities and FET colleges and resulting in twice as many young people in universities and twice as many graduating.

Of the 3.7 million subsidised houses 850 000 were built during the term of the current president, thereby eradicating about 500 informal settlements.

Over 7 million learners are in no-fee-paying schools and millions of children receive daily meals. The country is close to reaching 100% enrolment rate in basic education, a standard equal with developed countries. The average life expectancy increased significantly from 51 years in 2009 to 62 years in 2015 due to a robust and pragmatic approach to HIV/AIDS. All of these achievements have a real-life impact on ordinary people and strongly counter the argument that South Africa is a captured state with pronounced disarticulation of the interest of the poor. However, there are challenges that demand urgent attention.

The ANC Strategy & Tactics (2012) highlights that to identify weaknesses and correcting them, is part of the on-going programme of transformation of the state.

While the article argues that it is unreasonable to argue that South Africa is a captured state, it is important, however, to appreciate that there are certain objective and subjective challenges that can be exploited by the dominant private interest to capture the state.

The captors target these states and corrupt the whole value chain of state procurement and decision-making exploiting the weak institutions, governance systems and economic regulations. This negatively affects economic growth and service delivery as business with the state and SOEs is subjected to distorted prices.

The ANC Resolutions on Organisational Renewal highlights as the major subjective weakness the incapacity of the ANC structures to promptly and decisively respond to emerging challenges confronting the movement.

The strains on unity due to poor state of discipline, ideological degeneration, factionalism and bad political management of the party-state interface pose formidable challenges to the movement.

These challenges render the critical defence line of the ANC vulnerable to the ‘cheap-money’ politics of aspirant captors.

Drastic decline in disciple levels in the ANC bolstered by the work of institutionalised and emboldened factions expose the organisation to rampant capture. The degeneration erodes the revolutionary outlook of the ANC and has adverse impact on the capacity of the ANC to issue authoritative values in society and to mobilise a critical mass of South Africans behind the programme of social transformation.

Ideological degeneration also results in the marginalisation of organisational protocols on mandate derivation, which are meant to manage the party/state interface. Confusion that engulfs deployed cadres about where to derive political mandate on strategic matters compromises the role of the party as the strategic centre of power.

All these challenges must be boldly confronted within the ANC to avoid the capture of the party as a means to capture the state.

The most potent armoury in the hands of the people to confront and counter any attempts of state capture is a self-critical, solidly united and focused ANC.

CDE. ZAMANI SAUL IS ANC NORTHERN CAPE PROVINCIAL SECRETARY