‘Networks between private wealth and public office are fine for those inside them but not for those left out’
Our problem is not that the government ignores business, but that it listens to some in business more than it should. Which is why there is a connection between wedding parties that land at air force bases and the Licensing of Businesses Bill.
Most of the frenzied coverage of the Gupta wedding party implies that there is only one family in business that uses contacts with politicians to gain special treatment from the government. This reduces a deep-rooted malaise to a cheap morality play.
The Guptas are less subtle than others in business who use political contacts to gain special treatment. That they are foreigners and close to the president also makes their behaviour more conspicuous. But the problem is not restricted to them — their links to key politicians are an example of widespread practice that has become a norm for some.
An example was the role played by Cyril Ramaphosa, now African National Congress (ANC) deputy president, in last year’s labour turmoil. E-mail conversations between him and Lonmin show that neither was doing anything illegal and that the company may have been trying to safeguard its workplace.
But they show too that it was considered normal for a politically connected person in business to use influence to ensure that the company receives attention from the government. It is highly unlikely that everyone in business who does this wants only to get the government to do what it is meant to do.
We need only look at the names of the key black economic empowerment beneficiaries over the past couple of decades to see that the prime quality of the desirable business partner is political connection, because this opens doors which are barred to the rest of us. The Guptas are hardly the only people in business who use contacts to get special treatment from the public sector.
Some claim that business has no option because the government forces businesses to curry favour with it. But many businesses don’t make special deals with politicians — and, despite that, they continue to prosper. Companies are not forced to act in this way and many don’t.
Nor did the trend start when the ANC became the government — by the early 1990s, some in business, who saw political change coming, began forming special relationships with politically connected people. Two decades later, this has become entrenched in parts of business. It was initiated by businesses, not the government.
What has all this to do with the licensing bill? Much of the reaction to the proposed law assumes that power-crazed government officials are trying to impose controls on businesses because they are socialists or simply like telling people what to do, or both.
In reality, the bill seems to be an attempt to please some in business who are worried about competition from beyond our borders. Not only does Trade and Industry Minister Rob Davies repeatedly insist that the measure is meant to protect some businesses from others, but the law is supported by some business interests who have the ear of the government. It is more than possible that businesses asked for it.
So, in both cases, some in business have access to the government, which enables them to ask for, and get, special treatment.
Just as not all of business approves of or benefits from these arrangements, neither does everyone in politics and the government. Networks between private wealth and public office are fine for those inside them but not for those left out. This is one reason why the Guptas’ special treatment prompted a firestorm in the government and the ANC.
Special relationships make the excluded resentful — not necessarily because they want goodies, but because the connected throwing their weight around upsets them. And so, when the connected overdo it, the excluded grab the chance to hold them to account.
The difference between those who are in on the networks and those who are not works in the public interest: it is probably why abuses do make it into the public domain and why there are usually interests within the ANC eager to oppose them.
So the problem is not that the government imposes itself on business, but that some in business have links to some in the government and this ensures they can extract favours. The bad news is it is embedded — the good news is it angers those in business and government who are excluded.
And so there is more opportunity to challenge these networks than there would be if almost all of business and government were in each others’ pockets, as they are in some societies.
We will not grasp these opportunities if we stay trapped in a belief that the government is always the problem, business always the solution.
The links between parts of business and parts of the government threaten democracy — people on both sides oppose them.
Both the government and business are the problem — both can be part of the solution.
By: Steven Friedman
Friedman is director of the Centre for the Study of Democracy.
Source: Business Day