Tag: business

WEF-Africa: a gathering of tyrants, corruption-riddled state firms and banksters

WEF-Africa: a gathering of tyrants, corruption-riddled state firms and banksters

Patrick Bond – Business Day

At a time Donald Trump and Jacob Zuma personify controversies over ‘state capture,’ crony capitalism, corruption, populist rhetoric and self-serving economic strategies, will big business calm down the politicians – or just egg them on?

The Swiss-based World Economic Forum (WEF) meets not only in Davos each January but also gathers a few thousand elites in each of the main regions annually. In 1992 in Davos, Nelson Mandela was persuaded by both East Asian and Western leaders to drop the Freedom Charter and agree to subsequent pro-corporate policies.

This year’s WEF-Africa delegates include WEF-Africa partners that have recently been found guilty of serious corruption include banksters at Barclays, Citi (which to its credit last week paid the first fine – R70 million – for gaming the rand), Credit Suisse, HSBC, Investec, Morgan Stanley, Standard Bank, and Standard Chartered Bank. Other WEF-Africa financiers with terrible ethical reputations include the ‘Development Bank’ of Southern Africa, Old Mutual and Swiss Re.

Here and everywhere, the construction industry is full of swindlers, and those gravitating into the WEF-Africa this year include the Swiss-Swedish firm ABB and Nigeria’s Dangote Group, joining controversial local mining houses African Rainbow Minerals and AngloGold Ashanti.

WEF-Africa’s partners in the business services, media and high tech fields also boast prodigious records of fraud: Accenture, Baker & McKenzie, Boston ConsultingCisco, Ericsson, Ernst & Young, Google, Microsoft, McKinsey, MTNNaspers, PwC and Toshiba. And others of WEF-Africa’s multinational corporate sponsors which have bribed politicians across the world include Dow Chemical, Honeywell, Mitsubishi, Pfizer, Procter & Gamble, and Royal Philips.

Cozy relationships between brutal state rulers and the corporate elites they serve don’t need the celebration the mass media is giving them this week at the WEF-Africa. Where there are fissures, they need to be opened up further; for example, in the debate about how best to apply sanctions against Trump and Zuma.

With 200 000 marching against Trump’s climate policies in Washington, DC on Saturday, the US government will be targeted even more by the likes of Nobel laureate Joseph Stiglitz (dating to 2006), journalist-campaigner Naomi Klein, and even former French president Nicolas Sarkozy who all support carbon taxes or sanctions against Trump. Would WEF-Africa dare join them?

It is in the personal sanctions against the Trump family that the social movement #GrabYourWallet is having most impact. Still, both WEF-Durban and WEF-Davos need to be challenged to stop enabling politicians like Trump, so that anti-US climate sanctions can become a wider movement – like the one that brought down apartheid 30 years ago.

As for Zuma, not only was he awarded ‘Junk’ credit rating status after firing his finance minister and deputy finance minister last month. At least one corporate chief, AngloGold chairperson Sipho Pityana, leads a Save SA movement aiming to topple him.

And from the financial industry, the most courageous voice is Magda Wierzycka of Sygnia (whose Net1-superexploitation critique makes her the vocal conscience of South African capitalism): “Business can call on the international investment community to stop propping up the South African government until corruption has been rooted out and proper governance has been restored. This is as simple as making some phone calls to large international asset managers.”

WEF-Africa elites are apparently not on board, for its website likes to tell little white lies: “The host country – the only African G20 economy – is championing reforms to eradicate extreme poverty and promote shared growth nationally, regionally and globally. The host city, Durban, which has the busiest industrial port in sub-Saharan Africa, offers insights on how trade in regionally manufactured goods can strengthen economic resilience and create jobs.”

Reality check: since pro-corporate policies were adopted here in the mid-1990s, official unemployment soared from 16% to 27% and poverty rose from 45% to 63%, along with deindustrialisation and extreme ecological destruction. As for ‘shared growth,’ last week The Guardian revealed that South Africa is unequivocally the world’s most unequal country. As for Durban’s reliance on the port for trade, sorry: container traffic shrunk from 81.2 million tonnes in 2014 to 79.8 in 2015 to 76.8 last year.

The most dangerous of WEF types may well be absent: Rex Tillerson, a frequent attendee who ran ExxonMobil before Donald Trump made him the US Secretary of State in January. He is, the Rand Corporation’s elite analyst James Dobbins observed, “the personification of the Davos Man: powerful, worldly and well connected.”

Under Tillerson’s direction, ExxonMobil went into exploration overdrive from Alaska to Siberia, and in 2014 began seeking oil and gas 3.5 km deep directly offshore Durban, in spite of repeated objections by the South Durban Community and Environmental Alliance. The site is in the middle of the Agulhas Current, the world’s second most turbulent, near a priceless coastline. Actual drilling for oil and gas will begin if world prices increase. ExxonMobil has no ethics: in 1982, its scientists discovered that climate change would cause “some catastrophic events” but Tillerson and other Exxon bosses funded climate-denialist propaganda for the next three decades.

In contrast, the ‘People’s Economic Forum’ of local social, environmental, youth, student and labour movements has been meeting daily at the Durban University of Technology since April 27. Its march on Wednesday morning against the WEF-Africa includes a protest stop next to City Hall at the US consulate. Durban activists also offered solidarity marches with US women fighting Trump’s misogyny on January 21 and with US scientists fighting defunding on March 22.

As Financial Times columnist Gillian Tett conceded at the 2017 WEF, “Davis Man has no clothes… the annual celebration of global capitalism once represented the inevitable arc of human progress. No longer.”

And in Durban too, as capitalism continues to fail the South African majority, the ICC bubble stands a good chance of bursting. In part this will be the result of excessive hot air rising this week from both the ‘Zupta’ and ‘white monopoly capital’ camps within.

Patrick Bond – Business Day

Business leadership SA finally wakes up

Business leadership SA finally wakes up

After taking out a full-page ad in the Sunday Times calling on ANC members to vote with their conscience, Business Leadership South Africa, representing many large South African corporates, seems to have finally found its voice. It has also demanded a meeting with President Jacob Zuma to discuss the irrevocable breakdown of trust between Business Inc. SA and the government.

Unfortunately, discussions about relationships are a bit like marriage counselling – lots of talking, cajoling and promises. But unless there is a real willingness by both parties to change and meet each other halfway, not much will be achieved. In fact, over 50% of marriages end in a divorce despite the availability of counselling. 

In this instance, given the removal of Pravin Gordhan, the essential FICA Bill not being signed, and the new-found narratives about nationalisation, radical economic transformation, White Monopoly Capital and land appropriation, I think it is safe to assume that marriage counselling has failed. In fact, the breakdown cuts deeper. One party has called the other party’s bluff. Moreover, the president of South Africa has called the whole of South Africa’s bluff. Hence, to maintain this relationship on an even keel, one needs to respond in kind. 

What can BLSA bring to the table? First and foremost, it must be remembered that the business sector provides employment for 13.5-million or 86% of the country’s working population and pays the bulk of the taxes. That makes it a powerful force if it stands united. 

It can use that power to take a number of legal steps without resorting to actions which could be challenged in court. Let’s think of some. 

•    Business can withhold capital. I don’t mean not paying taxes. I mean asset managers refusing to invest in any future bonds issued by either the government or state-owned enterprises. In the case of SOEs, all funding should be withheld until proper boards of directors, with no political affiliations but with relevant commercial experience, are appointed to run these in a financially responsible manner. All SOEs should be subject to audits performed on a pro bono basis by the big four audit firms, including audits of finances, tender processes and risk management frameworks. These audits should be made available to the newly constituted boards of directors. 
•    Business can call on the international investment community to stop propping up the South African government until corruption has been rooted out and proper governance has been restored. This is as simple as making some phone calls to large international asset managers. 
•    The rand and the bond market clearly reflect the fact that international investors are unaware of the political risks facing South Africa. They assume that mass demonstrations are a sign of change, like they are in Brazil. They are not. Unfortunately, we are at the beginning of our journey towards change, not at its end. Business can make international investors aware of that. 
•    BLSA companies should allow their staff to protest without deducting the time off from their leave. I am not going to shame some large corporates which asked staff to take leave in previous demonstrations. But a time for shame may come. 
•    Private businesses can refuse to tender for government projects. They can also terminate all projects currently managed for the government and the SOEs. 
•    BLSA can freeze all hiring until changes are implemented. This should wake up more complacent people, as well as the student body. They have already shown us that they have immense power to mobilise. 
•    BLSA can donate large sums of money to civil society organisations, trade unions and to all opposition parties to strengthen their campaigns for change. It can also mobilise the general population to do the same. In the battle of wallets, South Africans will ultimately win. 
•    BLSA can spend money on massive advertising campaigns to educate the general population about the true cost of destructive economic narratives and policies. 
•    More plain English adverts appealing to the morality of ANC MPs can be taken out, including assurances that anyone punished for speaking their mind and standing up for the electorate will be absorbed by the private sector. 
•    BLSA can help fund legal cases currently on the go in various courts to bring those involved in corrupt practices to justice sooner. 
•    BLSA can bring its own civil cases against anyone who, through their actions, destroys shareholder value. It would not be difficult to prove what caused credit rating downgrades and how much shareholders and, for that matter, members of retirement funds and investors in unit trusts have suffered in financial damages as a consequence. 
•    BLSA can lobby international governments to exert diplomatic pressure on the South African government to induce change. 

The list carries on and on. None of the above steps would be illegal. None are threats. They are merely a response to the government’s recent actions and narratives. Once all the options are out in the open, you can start true negotiations and ultimate healing. 

However, the truth is that unless South Africa stands united, and this includes all ANC members who believe in a moral, just and free South Africa, we will achieve little but more marriage counselling. And finally, sadly, a divorce down the road. But not before both parties destroy each other, and the country, in the process.


This article by Magda Wierzycka first appeared in the Daily Maverick