In a 2010 Rolling Stone article the journalist Matt Taibbi famously described Goldman Sachs as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money." The bank has a relatively low key presence in Johannesburg, but it would be a mistake to therefore assume that South Africa doesn't have a giant vampire squid problem.
Indeed, there are three foreign companies operating in South Africa - all exhibiting similar squid-like tendencies - which immediately come to mind (there are certainly others).
The first and greatest vampire squid is of course the British arms company BAE. No sooner had South Africa made the difficult transition from white minority rule than their arms peddlers arrived - with the support and connivance of the British government - on a mission to corrupt and subvert the new African National Congress government (something that wasn't hard to do).
As we now know BAE offered R2bn or so in "special commissions" to senior ANC politicians and fixers to generate and then secure the R15bn LIFT and ALPHA contracts for the Hawk and Gripen aircraft. These were aircraft the SAAF did not want or need and which it could not afford.
These "commissions" were not just an inducement to the ANC to override normal procurement processes; they were a dagger aimed at the heart of South Africa's vulnerable new democracy. Once senior ANC leaders had accepted bribes to push ahead with the Arms Deal they had a compelling interest - over and above their pre-existing ideological inclinations - to break the independence of critical state institutions and thereby immunise themselves from investigation and prosecution.
The Arms Deal purchases decided in 1998 - and the ANC's strategy of cadre deployment adopted that same year - represent a nightmare from which our democracy is still trying to awake.
The second great vampire squid to have inflicted itself on our polity is Tony O'Reilly's Independent News & Media (INM). In 1994 O'Reilly was handpicked by his friend, ANC President Nelson Mandela, to buy-out the Argus newspaper group then owned by JCI. INM proceeded to set about converting the somewhat stodgy but independent-minded Argus newspapers into pro-ANC organs, while ruthlessly cutting costs.
This was a strategy which had dismal consequences for the free press in South Africa, and the quality of our democracy, but which has realised fabulous profits for INM over the years. Last year INM was able to suck out a further €37.6m in operating profit from its SA operations, a profit margin of 19.3% (see here - PDF). This despite serious declines in the core circulation of its flagship English-language broadsheet titles over the past five years.
According to the Audit Bureau of Circulations in that period the Cape Argus has registered a 31.2% decline in average core circulation to 38,778 copies, The Star a 22.9% decline to 109,411 copies, and the Daily News a 25.8% decline to 32,301 copies. By contrast in the second half of 1993 - the year before this ravenous squid attached itself to the Argus group - The Cape Argus had an average total circulation of 105,649 copies, The Daily News 93,021 copies and The Star 204,684 copies.
A third company that is beginning to display disturbing vampire-squid-like tendencies is the British bank, Barclays, the owners since 2005 of a 55,5% share in Absa bank.
The Solidarity trade union claims that according to its sources Absa has been instructed by Barclays to cut personnel expenses by 10%. The IT unit alone will be cut from 1,200 to 700 staff and up to 3,000 employees could lose their jobs at the bank.
Dirk Hermann, the union's deputy general secretary, says that while Absa CEO Maria Ramos has denied mass retrenchments will be carried out "Absa's strategy is to restructure business units one by one. The impact of the process is therefore being spread out. Employees are first informed that there is no room for their posts in the new structure, after which they are given a chance to apply for their own posts. The problem is that there are fewer posts than staff. The last step is therefore to retrench staff."
It is fairly obvious why Barclays/Absa would want to pursue such job cuts on the sly. There is something profoundly repulsive about the idea that South African employees should lose their jobs, despite Absa's profitability, so that Barclays can suck even more profits out through its blood funnel. According to the Guardian newspapers Barclays CEO Bob Diamond earned £17m (R205m) last year in pay, shares and perks.
The naive and optimistic view of foreign investment is that it automatically brings with it technology, capital and skills. And in return for a reasonable return on their investment foreign investors become partners in the economic development of a country.
In Vampire-Squidism - or what the Marxists might call Imperialism - after an initial outlay the foreign investor sucks out as much profit as they can, as quickly as possible, even if this is to the long term detriment of the business (and country) they have invested in.
The question is why has post-apartheid South Africa been so vulnerable to this perverted form of capitalism?
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