Fight for a 'servant state' not a 'captured state', says Gordhan

Johannesburg - A captured state cannot achieve transformation said former Finance Minister Pravin Gordhan on Thursday in Johannesburg. 

Gordhan was speaking on the challenges of economic transformation at the inaugural ASI Financial Service Flagship Thought Laboratory held at Alex Mall in Alexandra. 

In his address Gordhan said it was the role of government to give disadvantaged people leverage. “A captured state can’t play that role,” he said.

“The majority of South Africans want a servant state, operating with integrity and honesty and by the values the Mandelas left for us,” he said.

“South Africans must stop the rot we have been seeing in recent times. If we don’t stop the rot we won’t see transformation. We will be fighting for spoils.”

He said the first step in achieving economic transformation was to fight corruption in the public and private sectors. 

The former finance minister said a new class structure had developed in SA since the first democratic elections. “Interest groups have developed which did not exist before 1994,” he said. These groups now have powerful vested interests.

“If they have a benefit that will disappear because of transformation, they will resist it.”

Gordhan urged all South Africans to play an active role in achieving transformation by sacrificing something so that others could gain. “We are not a country without resources and institutions that can help people on the margins. We must harness those to benefit the vast majority.”

He told the audience that economic ownership was being confused with inequality in the debate around how best to implement transformation. If South Africans were all to become owners of 60% of the JSE, it would not address the poverty problem, he said.

More competition, new values  

He spoke out against the concentration of capital, saying the country does not have enough competition which was "essential for citizens to benefit.”

He called for more entrepreneurs and more small and medium sized businesses, as opposed to a few large firms that dominate their respective industries.

Gordhan said that economic transformation required new ways of thinking, saying there has been too much “orthodoxy” in South African economic discourse.

“Many institutions employ economists who think in one way. They have little ability or do not want to think outside of the box,” he said. 

“We must develop a new set of values for ourselves. We must be open to a plurality of ideas as opposed to stereotypical thinking which limits the way we do things.”

He stressed the importance of tolerance of alternative ideas, saying different opinion could and should be debated in a “constructive” manner.

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