NEWS

Unsure How State Capture Actually Affects You? We Asked Experts, And We're Worried.

From rising electricity prices to junk status, we all all impacted.

02/06/2017 06:01 SAST | Updated 02/06/2017 08:04 SAST

ANALYSIS

Every South African citizen, regardless of what role they play in society, should be concerned about the ramifications of state capture, warns economist Mike Schussler.

The funneling of state expenditure to suit the business agenda of an elite has widespread consequences on the economy –- which in turn will affect the lives of every citizen, be they rich or poor.

Schussler said on Thursday that South African taxpayers act as guarantors on a substantial amount of government and state-owned enterprise debt.

The average taxpayer will then in turn fill the gaps of government spending.

Discussing how state capture has the potential to impact the costs incurred by most South Africans, Schussler said we will pay more for electricity, for example, if Eskom channels portions of its funding to push the Gupta agenda.

"The money involved is massive. It is not like someone paying a bribe for a speeding ticket. These actions undermine the total economy," Schussler said.

"Electricity or rail transport prices could increase to bridge the gap. The whole state capture is a total misuse of state-owned enterprises which impacts every citizen. Every sector will feel the pain one way or another."

Schussler said the same funds could have been used to combat issues in housing, education and social grants.

Investor confidence
"But state capture also undermines investor confidence", continued Schussler. "For example, I don't think Glencore will come back running and open a mine in South Africa. A drop in investor confidence in these sectors will impact directly on jobs. Money and value is leaving the country. The Guptas are not the only ones, they are just the most notorious."

"With the eyes of the world on South Africa, more and more attempts will be made at corrupting South African officials."

Political analyst Ralph Mathekga said one of the reasons why issues like state capture and corruption does not lead to mass political action is because leaders and activists do not make the effort to connect how these issues relate to everyday people.

Mathekga said corruption increases the costs of goods and services as well as undermines democracy.

"When those who proliferate corruption are entrenched in the system, you start seeing they want more and more. And how do they get more? They increase the costs of goods and services," Mathekga said, speaking mainly about parastatals.

"The taxpayer is investing in something and being asked to carry the increment on that. That for me is the first way in which corruption affects access to goods and services."

Democracy undermined
The second effect is on democracy.

"When people have unduly captured policymakers, it tends to break the contract voters had with those officials. When voters vote, they are saying to you as an official that they are giving this vote based on the political mandate you have come to elections with. It is a pact," Mathekga said.

"Once officials receive the authority from voters to implement that mandate, you then have policy changing because of infiltration by those who captured the state. It actually breaks the relationship and undermines the pact between the voter and the representative. It undermines democracy."

On Thursday, new information decoded from thousands of emails between the Guptas and their associates revealed how South Africa's parastatals and politicians have been captured.

A series of stories by amaBhungane and Scorpio, the Daily Maverick's new investigative unit, give explosive details into deals between the Guptas and Chinese-owned companies vying for South African contracts, how politicians and state officials assist the Guptas in these deals and the benefits they receive in return.