‘State capture cost SA R1.5 trillion’
Sketching a picture of the sophisticated workings of the state capture project globally, its impact on South Africa and the continent, anti-apartheid activist Peter Hain yesterday said about 5% of the global GDP (gross domestic product), amounting to $2 trillion (about R29.5 trillion), was laundered each year by criminals.
While the true scale of the flagrant theft from the SA taxpayers during the Jacob Zuma presidency could not be fully quantified, Hain, in his submission to Deputy Chief Justice Raymond Zondo at the Commission of Inquiry into State Capture, said direct and indirect costs of the phenomenon gripping the country, stood at an estimated R1.5 trillion.
“Financial crime threatens the security and prosperity of the international community and the global financial network,” he warned.
“Criminals launder vast sums of illicit funds every year, transforming their ill-gotten gains into seemingly legitimate assets. Developing countries seem particularly prone to forms of corruption and the abuse of their domestic financial and regulatory systems.”
“The impact,” said Hain, left many countries “without the levers to prevent flows of illicit funds from their economies and so keep many of their citizens in perpetual and abject poverty”.
Turning to South Africa, Hain said state capture was, in part, facilitated by “the massive complicity of international financial institutions, global corporates and foreign governments – in India, Dubai and Hong Kong”.
He urged foreign governments and corporates to act in partnership with the SA National Treasury to recover the billions of rands looted from SA taxpayers – “much laundered abroad”.
“Having spoken under parliamentary privilege in the UK House of Lords in September 2017 to January 2018 on these matters, my focus is on the global dimension, especially money laundering because, without that, state capture could not have been as lucrative to its perpetrators as it so tragically has.
“It is incumbent upon the relevant foreign governments implicated and their enforcement and regulatory agencies to resource and prioritise cooperation to bring to justice those responsible for the international looting from South African taxpayers.
“The same must be the case for the global corporates involved. But, so far, neither has happened,” said Hain.