Corruption may exacerbate poverty and inequality but it is not the cause of it


My sister from Suriname lifted my depressed spirit last week when she reminded me that our challenge in South Africa was not xenophobia or crime but structural poverty, gross inequalities and vast unemployment. She had stopped fellow Africans from thinking that only Africans, from outside South Africa, were under attack in South Africa. “For goodness sake,” she exclaimed, “you guys kill, rob, rape, steal and threaten people whether they are White, African, Chinese, Indian, whatever!” 

She refreshed my thinking: xenophobia, if it is that, and crime are but symptoms of a sick society! So is corruption, it is a mere symptom not the cause! One therefore has to disagree respectfully with the eminent Professor Dhiru Soni when he tries to point out and make corruption the focus. It is not. The capitalist system, which South Africa has adopted since its inception as a union in 1910, is by its very nature is corrupt!

Indeed Professor Soni is correct, South Africans are not happy! But it is not because of corruption that they are unhappy. They are not happy because of an economy that perpetuates this corrupt and capitalist system as founded in 1910. Of course, capitalism reared its head during colonialism already and the discovery of minerals in southern Africa only worsened the lot of poor people living in the region. 

South Africans are not happy because even after 25 years of independence, we still have to debate whether the land should be returned to our people or not. The rightful return of land is supposed to be implicit of independence. What else is independence then?

Professor Soni suggests that it is corruption in society, not only the public or private sectors, that “…has taken South Africa further away from its goals as a middle-income country that offers an opportunity for all who live in it.”

Yet it is the mass exclusion of the majority of our people from the economy and systems, such as educational institutions and health facilities, that would allow them access to this economy that really retarded our development. Students had and still have to fight and protest, violently, for free education while we have yet to hear about the implementation of the National Health Insurance system. 

Correctly, Professor Soni points out: “..there is a growing chasm between haves and have-nots and poverty seems to be rising at an alarming rate. Currently we are the most unequal society in the world. Consequently, the poor in South Africa have little chance of improving their lives and they become ever more reliant on the provision of state services…”

But it is simply not corruption that causes this chasm to grow nor is it corruption that raises poverty by this alarming rate. For example, the work of Professor Geoffrey Hodgson in his book Conceptualizing Capitalism, is useful when he points out that in countries such as the United States where the richest 1% owns 34% of the wealth and the richest 10% owns 74% of the wealth of the country or the United Kingdom where the richest 1% owns 12% of the country’s wealth and the richest 10% owns 44%, these countries do not necessarily have an “issue” with corruption. At least, corruption is not as loud as it is in Africa. 

Professor Hodgson also employs the work of Professor Thomas Piketty, a world renowned economist known for his work in wealth and inequality and who wrote the book, Capital in the Twenty-First Century. Four years ago, South Africans had the privilege of hosting Piketty for the annual Nelson Mandela Lecture. But the elite and chattering class, who were Piketty’s audience in the main, were not too happy with what he had to say. So his words fell silent.

Professor Soni lauds the initial period post 1994 but Piketty was flabbergasted that income inequality had risen in the democratic South Africa at the rate that it was rising, especially during those years. Extreme inequality, as Piketty pointed out, was not good for development and growth. Yet what was the cause of this extreme inequality? 

Piketty suggested that the concentration of wealth was influenced more by international factors which were not under government’s control. He went on to point out factors such as unemployment and if people did have a job not paying them a decent wage. The rights to good quality education, access to property and “real economic and political democracy…sharing of economic power in companies…”, the absence of these were the main triggers of inequality and poverty.

Even more critical was Pikkety on “trickle-down” mechanisms in order to fight gross inequality and poverty. He went on to explain that the governments of yesteryear in North America, Europe and even some in Asia were able to mitigate the poverty, unemployment and inequality wrought in their countries through new social policies, welfare state policies, new fiscal policies and a vigorous yet progressive tax regime. 

Nothing on corruption because it is a mere symptom, not the illness. Professor Brian Levy, a former director at the World Bank and now academic associated with the University of Cape Town, in his work Working with the Grain, focusses on issues of good governance. Notice, not clean governance, but good governance. 

We have a provincial government in South Africa who believes that clean governance is good governance. Their concentration is on getting clean audits, getting their finances squeaky clean but whether they are actually delivering services to the poor is another thing. They send tons of money back to the national treasury, for example their housing budget, and have numerous court judgements against them because they do not take public participation seriously simply because they think clean governance is good governance. 

Good governance may well include clean governance but is it also about delivering services, being responsive to the needs of the citizenry and involving them in decisions affecting their lives. But back to Levy’s work. Levy is critical of the worldview of an age gone past which simply demands that challenges such as corruption ought to be fought in order to stimulate growth and development. This kind of thinking, he suggests, is stale. In a number of case studies, for example the one on Bangladesh, he states that when the new government came in and viciously attacked corrupt systems and individuals, growth and development were hampered rather than spurred. 

Instead Levy is much more interested in the existing institutions of a society and suggests that those interested in growth and development “work with the grain” rather than against it. It is in this respect too that one has to disagree with Professor Soni when he implies that the distortion of the “…political economy where dysfunctional state-owned enterprises and private enterprises work in cahoots to create fertile ground for rent seeking, looting and the major cause of grief for the citizenry – especially the poor…” came about only in the last two decades.

The political economy of South Africa, as stated earlier, was always distorted. State-owned enterprises, contrary to popular belief today, were always dysfunctional, especially under apartheid, and private enterprises were always working in cahoots with those seeking rent, looting and a cause of major grief. Before 1994, they were usually members of the Afrikaner Broederbond, the English elite and even today this class continues to reign. Just a pity an Indian family decided to mess in their pie and all of us got to hear about it.

What a pity that we Africans have lived up to the corrupt narrative that others have painted us with. What a pity we have internalised this as South Africans and think that, yes, we too have gone with the rest of Africa. As if corruption is unique to Africa!   

Like Fanon, Soni is wise. Yet we must ask whether Fanon provides us with the necessary tools to fight unemployment, inequality and poverty today. Corruption like all other crime is but a symptom of our illness. The cohort which led and won our freedom, of which Professor Soni was a member, fought for just that: freedom. It is now incumbent on my generation to fight for justice. 

For above all, it is my contention that it is an unjust system in South Africa, safeguarded by the 1994 compromise, that really causes and perpetuates poverty and inequalities!  

Wesley Seale has a MA in Governance and Development (Merit) from the Institute of Development Studies, University of Sussex. He is currently pursuing his PhD in Beijing, China.