In transactional leadership, the relationship between the state and business is not based on a shared vision of a better future but on the sharing of patronage. In his book Endgame, Willie Esterhuyse warns that “transactional leadership opens the door to corruption and promotes the possibility of opportunistic compromises. It is transactional leaders that convert fragile states and uncertain democracies into criminal states.”

Access to state-sanctioned commercial opportunities is given to a few elites in exchange for loyalty to the ruling party. In return, they are guaranteed commercial prosperity. Because of their proximity to the ruling party, these businessmen are expected to overlook failures of the state.

In South Africa’s environment, this means more than just loyalty to the party, it means a willingness to safeguard the material welfare of its leader and family members. The hideous umbilical cord between the ruling party and business was expressed recently in President Jacob Zuma’s admonition to business during the African National Congress’s (ANC’s) anniversary gala dinner: “I have always said that a wise businessman will support the ANC, because supporting the ANC means you’re investing very well in your business.” He might have added: “If you go a step further to support me and my family, you will reap a richer harvest.”

It is shameful that businessmen who are friends with Zuma have relatively easier access to lucrative state contracts at municipal, provincial and national level. These kinds of relationships imply mutual dependence and vulnerability. Like Russia in the 1990s, preferred business elites use their informal power to orchestrate networks in the state and to influence decision making.

In Russia, there was a coterie of influential and self-serving businessmen whose success was aided by the chaotic privatisation programme that bankrupted the state and stifled entrepreneurship. Many Russians became poorer as infrastructure collapsed.

Russia’s oligarchs had no interest in contributing to the renewal of the nation’s spirit or the economic welfare of the citizens who suffered decades of devastation under communist rule. In this giddy era, oligarchs such as Anatoly Chubais, then chairman of the agency responsible for privatisation, witnessed an instantaneous change in their fortunes, amassing wealth at the expense of the country’s economic stability. Despite being implicated in sleazy deals, he was rewarded with a cushy position as Yeltsin’s chief of staff, giving him access to vast political influence, which he used to augment his wealth further.

Many other oligarchs prospered through a web of lucrative commercial interests in media, real estate and natural resources. Some, such as Boris Berezovsky, who was once a leading media mogul, possessed the distinctive feature of being part of Yeltsin’s family’s inner circle. His political proximity landed him an influential position on Russia’s Security Council.

Yeltsin’s weakness as a leader made him a menace to the nation’s security. In her book Sale of the Century, Chrystia Freeland paints a picture of Yeltsin in the words of one of the oligarchs: “He is an interesting personality — dangerous, but interesting. He is like a bear: he seems always to have such a good-natured smile, but it is known that the bear is the most dangerous beast for its trainers.”

Yeltsin sold his country’s jewels to a coterie of robber capitalists and allowed it to sink deeper into misery. Consideration of his personal survival trumped everything else.

Zuma is South Africa’s Yeltsin. His presidency is a potential security threat for the country — economic and political.

South Africa’s equivalent of Russia’s oligarchs are men of influence such as Atul Gupta, Ajay Gupta, Vivian Reddy, as well as the darling of corporate South Africa, Cyril Ramaphosa. 

They represent a tiny but growing layer of a business elite whose informal power reaches to the highest echelons of the state. 

Their choreographed public image is at odds with their conduct and their sense of entitlement.

The danger for society is that these incestuous bonds breed cynicism. They open the state to corrupt influences of businessmen with no interest in the vitality of South Africa.

In this culture, other companies will also lose the will to champion progressive economic change. And South Africa could find itself becoming a Mafia state in the mould of Yeltsin’s Russia.

This article appeared in the Business Day of 25 January 2013