The mob rule: criminality consumes South Africa
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Why is organized crime now South Africa’s biggest business problem?
The Economist. Hello and welcome to the Intelligence from The Economist. I'm Jason Palmer. Today on the show, how aura rings found their way onto millions of fingers and a slightly discombobulating visit to the new Lucas Museum.
First up though.
As recently as a couple of years ago, South Africa's bosses would have told you the biggest problem they faced was the electricity supply.
Relentless blackouts were crushing the economy. These days, a problem with a different kind of power is top of their list.
South Africa has long had a criminal underworld, but increasingly it infects the overworld, the state and formal business.
John McDermott is our Chief Africa correspondent.
So much so that it is often the number one problem that South African businesses will tell you about.
Well tell me about the scope of it first of all, John. What what sort of form does this crime take?
People who put together rankings of countries by their susceptibility to organized crime put South Africa in a vaguely kind of Latin American league. So a recent report had it number seven out of 193 countries behind places like Myanmar, Colombia, Mexico.
Well, put this in into perspective, how bad is it in South Africa?
The World Bank, for its part, says organized crime costs the South African economy about ten percent of GDP, which is a huge amount. And while listeners might think, well, I vaguely know that South Africa has a lot of crime. It's a place where there is a lot of trafficking of drugs and people, animals, rare plants and the like, there are three new trends that are especially worrying the growth of the illicit economy, extortion mafias, and the extent of criminals' capture of the state and the criminal justice system.
Well, let's take those three trends in turn then. What's going on with the illicit economy?
In South Africa, there's a growing cornucopia of things that you can find in illicit marketplaces. So the most common are goods like cigarettes and alcohol, but it extends to dodgy petrol, dodgy copper, dodgy plastics. In isolation, none of these things are gonna break the economy. When you add it all up, it is a huge sum of money. So the guy who used to run the tax authority reckons South Africa is losing the equivalent in tax revenue to what it costs to fund the health budget.
And to the second trend then, the the rise in extortion?
Yeah, this is a particularly fascinating one. Around a decade ago, so-called construction mafia emerged in a province known as KwaZulu-Natal. And these are essentially muscle that will come to an infrastructure project site and say, if you don't cut us in on the project, then bad things will happen. And that sort of extortion mafia has expanded beyond that province to the rest of the country. I was talking to the mayor of Cape Town for this piece, and he was telling me that they have around fifty infrastructure sites at the moment where they've set up a war room to coordinate security protection because of these guys. It's a virus and it's spreading.
And you mentioned also the capture of the state of the criminal justice system by mafias?
Yes, I think this is probably the most worrying of the three trends. Most South Africans had a sense that organized crime was burgeoning in the country. But about a year ago, a lot of this burst out into the open when a senior cop from KwaZulu-Natal, Nalanlam Kwanazi, went public with some. explosive allegations about collusion among police. organized gangsters and politicians. And that press conference where he was dressed in fatigues and had officers carrying guns right next to him, I mean it looked like he was about to announce a coup. That led to this public inquiry, which over the past year has proved kind of dramatic viewing across the country, and it's revealed more skeletons than a Halloween party, quite frankly.
These hearings have already led to the suspension or departure of, let me take a breath, the police minister, the police commissioner, his deputy, the head of the police's organized crime unit, and the lawyer leading.
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