RESTRUCTURING AND INDUSTRIALISATION
Why the PIC must link funding to interventionism
There is a case for the Public Investment Corporation to broaden its mandate to include a much more interventionist role in the economy
It is understandable that the idea of getting the Public Investment Corporation (PIC) to bail out South African Airways (SAA) has caused such consternation among citizens and opposition politicians. Apart from being reckless, it would be immoral and criminal to use pensions of public servants and other public funds to back a company that has shown such flagrant disregard for the most basic standards of corporate governance and ethics. Still, there is a case for the PIC to broaden its mandate to include a much more interventionist role in the economy. It is already playing this role, but half-heartedly. Through its R1.9-trillion war chest, it owns a third of shares of publicly quoted companies on the JSE and has supported bonds of many state-owned enterprises. Most recently, it has been building up a property portfolio and funding projects outside SA’s borders. SAA is unable to raise funds from commercial banks because it is a badly managed company. It has failed to learn a single le...
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