The focus on President Jacob Zuma’s personal corruption is obscuring his embrace of austerity policies that are harming everyday people in South Africa, says Patrick Bond, Director of the Centre for Civil Society
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JESSICA DESVARIEUX, TRNN: Welcome to The Real News Network. I’m Jessica Desvarieux in Baltimore. South African president Jacob Zuma will be keeping his job. That’s after a vote to impeach the president was defeated on Tuesday. The opposition party, The Democratic Alliance, certainly was not happy about the vote. Take a look at their reaction: SPEAKER: The constitutional court judgment stated the the president failed to uphold, defend, and respect the constitution. In the order, they stated his conduct was inconsistent with the constitution. But the court did not find a serious violation that section 891A of the Constitution requires. DESVARIEUX: The news comes five days after the nation’s highest course ruled that Zuma had defied the constitution, by using state funds to make home improvements. With the major media focusing on the corruption scandal, we wanted to take a look at how this effects everyday South Africans. Now joining us from Durban, South Africa is our guest Patrick Bond. He is a professor at the University of KwaZulu-Natal in South Africa. Thanks so much for joining us, Patrick. PATRICK BOND: Great to be back with you, Jessica. Hi. DESVARIEUX: So Patrick, we know the impeachment attempt was connected to this whole personal corruption case. Yet we have recently seen South Africa under the leadership of the African National Congress, the ANC, really embrace austerity through various cuts in social programs. So if I’m understanding this story correctly, is this basically a situation where the political elite are getting richer while everyday South Africans are the ones really feeling the effects of austerity? BOND: Well that’s right. It’s a global story isn’t it and in South Africa it’s as usual most extreme. We’ve never really had such an interesting time in terms of political economy. And the contradictions bubbling to the surface as today–and in fact the corruption case against President Zuma, he’s able to laugh off. He has a particularly caviler way of dealing with the se criticisms. And that involved about 15 million dollars of home improvements on his rural palace he in KwaZulu. The area that, traditional has come from, and it’s part of a general problem. His nephew [inaud] Zuma was named in the Panama papers. He has a 10 billion dollar, now that’s serious money, 10 billion dollar oil fine that he was able to negotiate away from an Irish Company in the Democratic Republic of the Congo with his uncle Jacob’s help about 4 years ago. That’s a major scandal that I think the Panama Papers may help us understand a little better. But this is part of a general problem where one particular family from India, the Gupta family, has apparently been able to exert such influence on Jacob Zuma that they’re able to tell him which cabinet ministers to appoint including, last December, a disastrous to appoint a finance minister who was extremely close to the Guptas and that had to be rolled back. And as you saw with some of the democratic alliance and white capital and neoliberal faction, they’re not happy at all because this is bad for business, so they were able to put enough pressure last December, on Jacob Zuma to get a more neoliberal, acceptable finance minister for their interests. And as you say, his agenda, even though he was once a Marxist, he taught me Marxism in 1984 in the Ghandi Ashram, Privine Gordon is his name. But he cut the social grants that 16 and a half million people depend on. It depends on the inflation rate, but it will probably be about 5% cut this year. And that also includes freezes on hiring public sector workers. The confrontations with people all along the chain- including even university students against, because the fees are still too high. They’re still demanding fees next fall. Low fees, no fees indeed for education. The tensions are really at a boil. DESVARIEUX: I hear your criticism about Zuma’s austerity polices but what is South Africa really supposed to do given the fact that it’s experiencing multiple currency crashes? It’s about to move to junk grade statuses on it’s bonds, so what other options do they have? BOND: Well let’s just continue with that context without thinking about alternatives. The January low point of our currency was 17.99 rand to the dollar, just after Goldman Sachs let it’s traders know that the South African currency would be the second main trading bet of 2016. Now Goldman Sachs was very involved [inaud] in giving good advice to discoverances. Very ironic that the unpatriotic character of it’s advice and it’s own financial bets became so obvious in January. The currency’s been very volatile, but it was 6.3 to the dollar in 2011 at the high point of that big commodity boom. And really that’s part of the story, isn’t it, that the commodity crash- it really began in 2011 and really got bad last year 2015, prices of major commodities that we export, like coal, the peak was 170 dollars per ton in 2008.It’s now around 50. Platinum down about half. Many of our major exports have crashed because the overproduction on a global scale. Steel is just demolished because the Chinese have overproduced steel and are dumping it in South Africa. You put on top of that Jessica that output capital, let’s call it illicit finical flows, and the Panama papers show how microscopically that happens. One big company, the biggest platinum company, InPlats has been named, but Khulubus Zuma has been very involved in the sectors and plenty of others will still be named. And we know they have offshore accounts. What’s really been disturbing is They take according to global financial integrity, a Washington NGO, 21 billion dollars per year, a huge amount. offshore in illicit flows, average for the last 10 years, every year. And the government hasn’t done anything. Could the government do something, absolutely. The two words that would really help to solve the problem in the short term are exchange controls. And instead of tightening them and keep in money in the country. And for example saying to the big mining houses- no no you gotta keep you got profits in the country, not take them to London, that in fact has been one of the key aspects of liberalization, the neo-liberal agenda says let the capitol flow out as fast as you can. That puts more pressure through Moody, Sander Poors and Fitch, with a junk bond rating imminent on the finance minister to cut programs to poor people DESVARIEUX: All right Patrick, I know you made mention of neoliberal elites actually even criticizing Zuma throughout this whole scandal. I want to get your take–like looking into your crystal ball a little bit about the ANC’s future. What do you see as sort of the consequences of this scandal and how do you think the ANC will fair in the future? BOND: Well it’s so interesting and hard for an outsider to read properly but there are definitely different factions. One is the Communist faction. Communist party is allied with African National Congress, going way back to the 1950s, with the rump, the left over the trade union movement that already hasn’t run away. The biggest union, the metalworkers, left in 2014 but the Congress of South African Trade Unions, let’s call that the center left. And then the center right block controls it with a nationalist and populist element and an ethnic element, with the Zulu people being the strongest and biggest block. Keeping Zuma in power, making sure he doesn’t lose these votes in parliament on impeachment. They’re really strong behind him and they may get his ex-wife Zuma whose name is [inaud.] to take over if they have their way. She’s just coming back from the African Union where she’s been the chairperson the last 4 years. the neoliberals, the major block really in terms of power and exertion of power over the structure of the economy, the finance ministry, the reserve bank, keeping interest rates extremely high, they support [inaud] the deputy president and you may remember he was the one implicated in emailing a request to the police to have a very pointed response in Mericana. Against wildcat strikes. Against the company [inaud] in which he was a 9% share holder. The major black share holder. So we’ve got a very messy situation is you look internal to the ANC. Externally, the left is beginning to find its voice and we saw a little of that today with economic freedom fighters in the Parliament. We’ll probably see more of the metalworkers align with other unions, the mine workers union that broke away called the [Amco] union. And they probably start an even larger federation at some point it will grow as the major left federation of unions starting on May 1. They’re going to hold a big march in the center of Johannesburg. So we’ll watch that to see if they can gather the forces of aggrieved working class people with communities, with people of faith, NGOs, civil society that have really given up on an ANC who continue to keep in power a man Jacob Zuma and his family and his friends, the other family, the Guptas, who pretty much everybody knows is now openly unveiled as corrupt. DESVARIEUX: Alright, Patrick Bond joining us from South Africa. Thank you so much for being with us. BOND: Thank you Jessica. DESVARIEUX: And thank you for joining us on The Real News Network.
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