The blight of first family enrichment

2010-09-11 11:18

President Jacob Zuma is trying his best to stomp on the growing controversy about the enrichment of the first family, but he is failing.

One of the few lobbying points the ANC Youth League (ANCYL) shares with Cosatu and the Young Communist League (YCL) is an aversion to this ­pattern of empowerment.

This week, ANCYL president Julius ­Malema laid into BEE in general and specifically criticised the empowerment of political dynasties.

A fortnight ago, Cosatu general secretary Zwelinzima Vavi said this pattern marked the arrival of a hyena state, an ­allegory on the feeding habits of the wild ­animal that prioritises its immediate family over the rest of the pack.

While YCL chairperson David Masondo has been smacked down for criticising the pattern publicly, his shorthand definition of first family empowerment as ZEE (Zuma Economic Empowerment) rather than BEE has quickly worked its way into the national alphabet soup.

The president’s response is characteristically simplistic.

He told the Sunday Times last week that he thought it incredible that anyone with the surname Zuma should not be in business.

Of course, that’s hardly the issue, but the president plays the simple man from Nkandla to great effect and he is trying the same here.

It should not be allowed to work or we will sow the same seeds as so many cronyist societies.

In a previous life, I spent a lot of my time finding and writing about young entrepreneurs in arts, ecology, business and labour.

These were mostly 20-something young people who were excellent at what they did.

Obvious leaders, they were people of awesome talent – our tomorrow generation. Some were born with longer silver spoons than the president’s twins, Duduzane and Duduzile, some with none at all.

While a few who had inherited wealth were obviously well off, most of the black young people were on their way up.

While they were middle class, none had a mansion in ­Saxonwold or drove a Porsche Cayenne, as Duduzane does.

None had shares worth ­almost R1 billion or led the BEE consortiums in major industrial buyouts.

The ArcelorMittal deal was struck for ­politically expedient reasons, as its CEO Nyembezi-Heita acknowledged in several ­interviews.

Our president must have read these interviews. He must know that his son may have been chosen for many reasons and that his surname was one of the key reasons.

Business is a sector of ultimate self-interest and one that uses influence to achieve market share and to assist in winning deals. The South African state plays a large role in the economy.

Government is big and spends big, so political influence is seen as crucial.

The economy is highly regulated and most major concerns have entire departments that deal with public sector stakeholder management.

Our president, who faced corruption charges that related to corporate influence peddling, should know this and know that the line between cronyism and corruption is very slim indeed.

The era of ZEE is a worrying one because it suggests that we are entering the slipstream of African first family enrichment, a blight on the post-colonial continent.

In many countries, resources become trapped by the first family, which controls the largest deals and the largest sectors with mainly ­foreign players.

Duduzane Zuma’s sponsors are the Indian Guptas. (See First families feeding at the trough, page 27.)

The pattern is repeated through the ­political establishment so that in the end, the economy is controlled by concentric circles of political dynasties.

Soon, revenues are ­diverted to tax havens and as the public fiscus is squeezed, economies begin to go into ­decline. Society is divided into an elite and an underclass.

It’s worth noting that the president’s ­nephew, Khulubuse Zuma, has won oil ­concessions in the Democratic Republic of Congo through companies domiciled in the British Virgin Islands, a tax haven.

None of us, no matter what our surnames, should be precluded from the economy. But fortunes built overnight when you share the president’s surname are sure to raise ­eyebrows.

The president should have a word in his son and nephew’s ear.


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