Atul Gupta and President Jacob Zuma at sporting event. (Picture: GCIS)

There has been a development in governance in South Africa that I think has major implications for both South Africa, the United States, and other countries. This is the concept of “state capture.” According to Wikipedia, state capture is “a type of systemic political corruption in which private interests significantly influence a state’s decision-making processes to their own advantage.” It was first used in 2000 by the World Bank to describe how, after the end of the Soviet Union, the central Asian counties became governed by small corrupt groups, now known as oligarchs. With the state capture government officials made decisions in the oligarchs’ economic interests rather than the national interest.

In South Africa, the group that controlled its state capture was the Gupta family. This family consisted of three brothers and their nephew who came to South Africa from India in 1993. Their father, a modest businessman, thought that the new South Africa, which had just thrown off apartheid, would be a better place to invest than India. He was correct. By 2016 the leader of the family, Atul Gupta, after 23 years in South Africa, based only on his net worth on the Johannesburg stock exchange, was worth an estimated US$773 million and was the seventh richest person in South Africa.

The Guptas’ initial company in South Africa was Sahara Computers. In time they branched out into technology, mining (uranium, gold, and coal mines), energy, air travel,  a luxury resort, and media (newspaper and TV news station). About ten years ago the Gupta family began to associate with now President of South Africa, Jacob Zuma. For example, through two holding companies, Zuma now holds 24% of the shares of Sahara Computers; three of his family members were placed in top positons in Gupta controlled companies. While the Gupta family has supported Zuma’s political career, Zuma has reciprocated with “favors” to Gupta companies.

One example is that a company, controlled by the Guptas and a Zuma family member, was awarded a $7.8 million contract (10% of the total contract) to “obtain customer consent” and the “requisite signatures” for the purchase of railroad locomotives and cars. The Gupta family owns South African uranium mines. In 2014 the South African government approved a massive 6 to 8 nuclear power plants (9,600 MW) for $50 to $100 billion. When the minister of finance opposed this, he was dismissed and replaced by a more compliant minister. There are reports that Atul Gupta had offered cabinet positions in a number of crucial ministries to various people with the expectations that they would cooperate with Gupta companies. The list goes on and on. The conclusion is that the Guptas in their alliance with President Zuma have captured the South Africa state so that decisions are made not on the basis of the benefit to South Africa but on their business interests.

When all this was exposed last year and this year, the Gupta businesses were put under a cloud with, for example, banks refusing to work with their companies. Zuma has been asked to resign and has barely survived attempts to oust him. Moreover while this case is “spectacular” in its implications, the South Africans have realized that there are other businesses that have captures parts of the state.

President Dwight D Eisenhower giving his farewell speaking on January 17, 1961.

If we apply this concept of the “captured state” to the United States, we can begin by reviewing President and former US general Dwight D Eisenhower’s farewell address on January 17, 1961.

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military–industrial complex. The potential for the disastrous rise of misplaced power exists, and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals so that security and liberty may prosper together.                      .

Wikipedia defines the military–industrial complex as “an informal alliance between a nation’s military and the arms industry which supplies it, seen together as a vested interest which influences public policy.” Although the term, “state capture” was not used then, the military-industrial complex captured the American state during World War II and has never given up its control. President Eisenhower, a former military man, realized this by 1961 and the situation has only become worse over the following decades. At the end of each war – WWII, Korea, Vietnam, Cold War, and so on – there was supposed to have been a “peace dividend” that would drastically cut the military budget, but this has never happened. The military has always found a new “enemy” to scare the American public and over time it became so strong and pervasive that nothing could curtail its extravagances. By various methods, elected officials from the president to congressmen plus the media are “captured” and controlled by the military-industrial complex. Remember how peace loving Barrack Obama sounded during his 2008 campaign and for the first few months in office – so that he prematurely received the Nobel Peace Prize – and thereafter he became as much a “warrior” as the presidents before him. Did he, as president, control the military-industrial complex or did the military-industrial complex control him?

It is going to take more than all the labors of Hercules to recapture the American state from the clutches of the military-industrial complex. Until this happens, the United States will not be a democratic country responding to the needs of its citizens. I don’t think I need to emphasis how under the current administration the US is currently going in the wrong direction as the military-industrial complex increases it appetite for American and world resources for its own benefit, and not for country of the United States itself.

A reader from another country might want to consider how the concept of “state capture” plays out in his/her country.

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From 1998 to 2016, David Zarembka was the Coordinator of the African Great Lakes Initiative of the Friends Peace Teams. He continues his peacemaking work in East Africa with Transforming Communities for Social Change (TCSC) and Friends Church Peace Team (FCPT). He has been involved with East and Central Africa since 1964 when he taught Rwandan refugees in Tanzania. David is married to Gladys Kamonya and lives in western Kenya. David is the author of A Peace of Africa: Reflections on Life in the Great Lakes Region.

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David Zarembka

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