Condemning South Africa to debt

ON APRIL 8, 2010, in Washington D.C., South Africans were signed into debt to the World Bank to the tune of 30 billion rand ($3.94 billion) for the purpose of ensuring that South Africa can sustain its fast-growing electricity demands.

According to the Bank, the loan granted to the South African government "aims to benefit the poor directly, through jobs created as the economy bounces back from the global financial crisis and through additional power capacity to expand access to electricity."

It further justifies its loan to South Africa by stating in its press release that the country's role as energy supplier to much of Africa is pivotal in ensuring that Africa meets its developmental needs and forecasts. It also states that the loan is important for the growth and support of small businesses and much-needed job creation in a country in which much of the population is unemployed.

I will remind myself of these lofty ideals each time I enter the 20 digits into my electricity meter at home. After all, it is probably best to ignore the realities behind this loan and tell ourselves that it serves to assist an already committed government in achieving its goals of housing the destitute, creating jobs for the poor and elevating the majority of South Africans from their miserable stations in life.

With regard to the loan, Jacob Zuma stated that the energy sector is a critical factor in South Africa's growth and development and should be treated as such. I would like to ask Zuma when exactly this revelation dawned on him since he is at the helm of the ruling party that managed to turn our once-profitable national energy supplier into a circus.

Mr. Zuma was also the vice president of the country when the energy crisis was unfolding, and it is not entirely unfair to suggest that such matters would befit a senior politician's attention. The farcical nature of both Zuma and the World Bank's statements is not difficult to spot and the actual reasons for the 30 billion rand burden that has been placed on the country's shoulders is clear as day.

In better days, the financial reports of Eskom (South Africa's public electricity utility) showed profits in the billions annually--profits that should have been invested in the maintenance and required upgrades of the national power grid. What was required from the new dispensation was to ensure that we built on the previously laid groundwork and ensure that the parastatal grew with the demands inherent with population and economic growth.

This was not to be the case--the reality was that skills were substituted for incompetence for the sake of a Black Economic Empowerment (BEE) policy that by far does not achieve its goal in empowering previously disadvantaged individuals, but is instead used as a tool to only empower certain black people who share the ideologies of those in power.

FOR THE World Bank and our government to purport the idea that the loan is justified through growth requirements and not simply a bail out to a blunder of epic proportions is a disgrace--and to expect South Africans to fall for it is shameful.

What should make us equally nervous about this loan is that the World Bank is entrusting such a large sum of money to a government that has a dismal reputation for corruption, nepotism and notoriety for granting multi-million rand tenders to its party members and hangers-on by means of corrupt tender processes.

Tenders granted under questionable circumstances generally translate into very poor returns on the money spent on them and poor service delivery to our citizens. It is alarming to think how much of the 30 billion rand borrowed will be written off to corruption, theft and wasteful spending that has become the order of the day while the poor continue to struggle to find means of sustenance.

The World Bank itself should not be mistaken for the philanthropic organization it professes to be--the conditions placed on countries by the bank in the past have in many cases served to place greater financial and social burdens on the general population of these nations. The World Bank has an appalling reputation for setting conditions on loans that entail getting borrower countries to open their markets and conduct their economic affairs in a manner that benefits multinational corporations as part of the prerequisites to loan agreements.

And what of the Bank's commitment to good governance as a prerequisite to granting loans to borrower countries? It doesn't require intensive research to know that South Africa is victim to large-scale government corruption and that billions of rands are lost to this menace annually. Without proper measures in place to ensure that this loan is spent on the intended projects, there can be no guarantees that a large chunk of the money will not be lost to the same corruption and mismanagement that got us in this mess in the first place.

We've potentially entered a vicious cycle that may see us ending up on the World Bank's doorstep asking for more money in the future. Our politicians in the opposition need to ensure that the conditions set by the Bank are made public so that they may be scrutinized and to ensure that the government has not agreed to conditions that will ensure further economic hardship for the working and poor classes of the country.

ANOTHER CASUALTY in this fine mess is our environment. With South Africa ranked as the biggest polluter in Africa, the new coal-powered station will only serve to cement our standing.

The water requirements for running a coal-fired power station will put great demands on our already scarce water resources.

The environmental and financial cost suffered by Eskom's lack of foresight is simply too high. There seems to be an air of obliviousness to the African National Congress (ANC) rule causing me to worry that the lessons of the past 15 years of mismanagement may have been lost on our ruling elite.

This is not to say that the same applies to the citizenry of the country, but our future generations stand to inherit the economic, social and political wasteland that will be left behind if this clown-posse is left to pillage resources and plunder the national coffers. We simply cannot allow the status quo to continue unchecked.

Looking at the future leaders that are being groomed by the ruling party I cannot see a very promising future on the horizon. With a youth league that borders on militancy and intent on spreading the destructive seeds of racial intolerance, the prospects are bleak to say the least.

The silver lining here is that the ANC is guilty of the same miscalculation made by the National Party government of the apartheid years--that the will and the ability of the South African people to bring about required change can be disregarded.

The writing is on the wall for all to see, but the message seems to be lost on our leaders.
Yaseen Burt, South Africa