Former UCT economics professor Brian Kantor has never been afraid to speak truth to power. So he has become an even more important voice in a country where too few who are close to the business community are prepared to publicly disclose what private capital allocators discuss behind closed doors. So when Kantor warns the motives behind Nenegate have not yet been weeded out, we best best. For rational observers, December’s attempted crony capitalist takeover of the National Treasury suggested South Africa faces a binary future. Some hope the market’s swift reaction to that event scared off what Peter Attard Montalto of Nomura dubs the ANC’s “tenderpreneur” faction. Kantor thinks not. He advises continued vigilance. And provides a reminder that all it takes for evil to flourish, is for good men to stand aside and do nothing. – Alec Hogg Â
By Carin Smith
Cape Town – The battle of who controls the Ministry of Finance is certainly not over yet, cautioned economist Prof. Brian Kantor on Thursday.
“President Jacob Zuma’s firing of the Minister of Finance was allegedly related to the nuclear deal as the Ministry of Finance needs to sign off on it,” said Kantor.
“I think honest men and women were standing up against the threat of state capture.”
Kantor, who is the chief strategist and investment analyst at Investec, was a guest speaker at a discussion forum on state capture hosted by the Black Management Forum in the Western Cape. Kantor made it clear that the views expressed are his own and not on behalf of Investec.
To him South Africa’s nuclear deal is an important issue to consider in this light.
“The nuclear deal is not just ‘a little municipal tender’ – it is big stuff and seems to involve an interesting cast of characters. Is the nuclear deal perhaps even bigger than the arms deal? The nuclear deal could be captured and how do we protect ourselves?” asked Kantor.
It also sounds “a bit funny” to him that SA allegedly claims not to be needing its strategic oil reserve.
“The topic of state capture is of great importance. In the past states have been captured by kings, churches and land owners, to name but a few. It is only for about the last 300 years that the monopoly of using the state for narrow ends has been underminded,” explained Kantor.
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“States have now been designed to protect individuals and this inclusiveness has led to an explosion of productivity.”
Kantor said states are captured because they certainly are worth capturing as there is a great deal of wealth to be captured – especially if income streams are narrow.
He suggests the best approach would be for people to blow the whistle on any suspicious activities related to state capture.
On the other hand, Kantor said the SA Reserve Bank (Sarb) has at least proven its independence by raising interest rates in a weak economy and during an election year.
At the same time Kantor thinks raising interest rates in such conditions is a sign of poor judgement by Sarb.
“The question is: How can you raise interest rates into a famine, into a drought?” he asked.
Another issue raised by Kantor was foreign investment. He emphasised that SA is still dependent on foreign capital. He said SA has an outflow of foreign direct investment at the moment.
“There is no shortage of capital around. Therefore, SA needs faster economic growth to attract more capital. Economies can grow and have grown by giving economic actors more freedom,” said Kantor.
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“I argue for the view of making government an enabling agency and not the source of economic growth. To keep the economy going we must do right by foreign capital. If we close ourselves off from the world we will not be better off.”
He said nations fail when the State stands in the way and when corporations are not allowed to flourish and create wealth and jobs.
“Economics expose the cruel realities of life. I can offer poverty relief in SA, but you would have to allow me to free up the economy,” he said.
“We want a competent, honest government with a sense of public responsibility to people and the poor in particular.”
He said SA’s business sector is highly competitive and respected internationally. When a member of the audience made a negative remark about the wealth of Johann Rupert, Kantor said his father, Anton Rupert had humble beginnings and actually took on a monopoly when he started to build his business.
Kantor also challenged the audience about the land reform issue which was raised during question time.
“Why is there no argument made for land reform of traditional leaders?” asked Kantor. “They control vast lands and are protected. Why is no-one upset about that?”
Phumzile van Damme, the DA’s national spokesperson, was the other guest speaker at the event. She said it is important to stop state capture as it is a threat to democracy in SA. When a member of the audience advocated a boycot of elections as a form of protest, Van Damme said that is not a good idea.
“Voting is a tool to build the SA you want,” she said.
Deputy Minister of Higher Education and Training Mduduzi Manana was supposed to be the third quest speaker at the event, but did not make an appearance.
Fin24
Source:Â http://www.fin24.com/Economy/kantor-battle-for-treasury-nuclear-not-over-yet-20160526
