The governance crisis engulfing the Public Investment Corporation should force public-sector unions to ask a bigger question: Why are workers’ pension assets being managed principally according to the priorities of financial markets when they could help rebuild South Africa?
The latest turmoil at the Public Investment Corporation (PIC) should deeply concern every public servant in South Africa.
But if the response to the latest scandal is simply to demand better managers, tighter governance and more profitable investments, we will have missed the bigger issue.
The fundamental question facing the PIC is not only whether particular investments are corrupt or badly managed. It is: What should this enormous concentration of workers’ and public money be used for?
That question is now more urgent than ever.
Imagine if organised labour demanded that part of the GEPF’s investment capacity be used to underpin a mass social and public housing programme.
Such a programme could build hundreds of thousands of energy-efficient homes close to employment and transport, retrofit existing public housing, install solar water heating and renewable energy, rehabilitate degraded urban land and dramatically expand the country’s construction capacity, creating thousands of jobs in the process.
Or what if GEPF-backed public finance helped rebuild PRASA, expand electrified commuter rail as well as rail transport in service of industry, establish integrated municipal bus networks and finance the domestic production of trains, buses and components?
This will translate into sound and long-term economic growth, jobs, and development from the ground up; truly inclusive this time.
A genuinely public investment institution should be able to recognise such social returns and invest accordingly. Read more below.
