What’s been happening in SA is a ‘run’ on the state


There’s a term that I keep coming back to whenever I rack my brain trying to understand the mass-scale looting that has occurred in SA over, especially, the last 10 years.
There are, of course, any number of motivations and incentives for theft.
I keep coming back, however, to the idea that there has been a run on the state and its agencies.
This idea of a “run” is taken from the history of banking crises.
A “bank run” occurs when very many people rush to withdraw their money from a bank because they have lost faith in the long-term viability of the institution.
The history of bank runs is deep and complex.
It provides great insights into systemic crises, the frailty of credit and the dangers of ignoring banking regulations.
Anyway, the analogy of a run on a bank extended to a state and its agencies is not exact.
It simply gives one a language, so to speak, with which to try to make sense of the scope and span of the looting that has occurred.
We should, of course, not dismiss the exploitation of power in the private sector – from prelates of charismatic churches to fiends who plunder corporate coffers – but public sector crime surely carries a high social burden.
By one calculation, over the past four years alone the run on the state – as part of state capture – adds up to R1.5-trillion.
That is a lot of money and it is somewhere in the world.
Sums like that do not disappear into the ether.
They usually lie in bank accounts after having gone through varying stages of laundry.
This weak analogy notwithstanding, there is a pervasive sense, especially among a section of the ruling elite, that as much rent should be extracted from the state and related agencies, while it is still possible.
There is, of course, the possibility that it is not a co-ordinated run on the state.
Sometimes each rent-seeking act (theft) may be discrete from another.
This past weekend there was a report of a R1m bribe that was allegedly paid to Ishmael Kgetjepe, the Limpopo MEC for education.
There were also revelations of an estimated R23m medicolegal claims, very many of them fraudulent, racked up by the Eastern Cape provincial health department.
Up north, in Limpopo, a new provincial report provided further evidence of the extent to which VBS Mutual Bank damaged provincial services.
In the meantime the Gupta family is reportedly trying to take R1bn out of SA.
The litany of larceny is long. Nobody could have guessed that this run on the state and its agencies would occur in such a brazen fashion.
But there were signs, early on in the democratic era, that there would be a run on the state.
It was reported on May 17 1997 that “huge amounts of theft by officials in Johannesburg pension offices (in some cases hundreds of thousands a day”), and in the housing and land affairs department, at least R1m mysteriously disappeared.
Earlier, in 1995 and 1996, an estimated 8,000 police officers were reported to have committed crimes and about 2,000 police officers defrauded their medical aid scheme of R60m.
For a sense of the continuities of this run on the state and state agencies, consider this in the context of reports that emanated from last week’s Council of Medical Schemes inaugural Fraud, Waste and Abuse Summit, which suggested that fraudulent claims cost the industry between R23bn and R25bn a year.
Early evidence of a run on the state and its agencies prompted the (then) minister of justice, Dullah Omar, to admit that there has been a growth in administrative corruption since 1994.
Could we have known that corruption would escalate the way it has over the past 25 years?
Maybe. Perhaps if we were less romantic about democracy.
Consider the following story, heavily redacted, as it should be.
Shortly after the exiles returned to SA in the early 1990s, a famous musician invested in an entertainment venue in Yeoville.
As far as the entertainment went, that night in Yeoville was a roaring success.
The music was good. The food was good.
The conversations were outstanding.
There was a lot of hope and optimism in the air.
At the end of the night, when all the guests and most of the staff had left, it came to cashing up. Those tasked with cashing up were horrified.
Every cash register they opened was empty.
It turned out that every employee had stolen money – just a little bit.
Needless to say, the venue did not last very long.
Maybe we should have known that this run on the venue was a taste of what may come...

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