From Gareth Stokes, MoneyWeek editor, SA

Dear MoneyMorning reader

When President Jacob Zuma took the reins on 22 April 2009, he promised an efficient and transparent bureaucracy. At almost three months into his term, these promises look increasingly like a pipe dream. Opposition parties’ attempts to uncover political involvement in corruption still meet resistance at the highest level. None other than deputy finance minister, Nhlanhla Nene, begged for “political protection” for the incoming Land Bank executive when he felt parliamentary questions landed too close to the mark.

The allegations suggest we’re not talking petty crime or petty cash! The Land Bank features in four major corruption investigations. These include the issue of inappropriate loans (outside the bank’s mandate), IT-system fraud, misallocation of more than R1bn in the smallscale farmers’ credit scheme and wrongdoings at the AgriBEE fund. Why should parliament shield senior politicians? The organisation was established with taxpayers’ money and should be totally transparent and accountable. To make matters worse, the attempt to “protect” certain “elite” wrongdoers coincides with the handover of investigations from the defunct (previously independent) Scorpions crime fighting unit to the police-housed Hawks. Politicians are taking additional steps to protect their interests by sending the Hawks on a proverbial wild goose chase. They want the unit to investigate illegal mining at the country’s mines, something best left to the mining houses’ internal security departments and the regular police services.

Why should an economic magazine editorial have such a political focus? The African National Congress (ANC) is hard at work to further blur the lines between party and state, while its alliance partners telegraph worrying messages to international investors. The influential ANC Youth League and Congress of South African Trade Unions (Cosatu), for example, have called on government to nationalise the country’s mining sector assets. Commenting to the media while at the recent G8 Summit in Italy, Zuma downplayed the crisis. “There’s nothing to be worried about,” he said. You can be excused for wondering whether Zuma’s in a position to make such promises. He admitted that the “nationalisation debate” was on the cards and that “the outcome of the debate and the implications that it [would] hold for ANC policy [would] be determined by how the debate proceeds!” Clearly, the sigh of relief escaping the lips of South Africa’s mining industry stakeholders is premature.

You can expect more government intervention in private business going forward. Social policies, such as national health insurance and retirement reforms, demand it, as does the inherited structure of local service delivery. You cannot bank on private sector involvement in electricity or water supply in coming years. State involvement in these areas is common around the world. In this week’s feature article (on page 16), UK-editor John Stepek and Eoin Gleeson reveal how “governments are backing the green energy cause”. They advise investors on the best places to chase “green energy” returns.

On the local front, Standard Bank Group Economics warns that “hopes for a speedy economic recovery should be tempered!” They note that the Reuters’ Econometer – which records six medium-term economic indicators – has fallen to levels last seen in September 2008, when Lehman Brothers went under! Standard Bank concludes that “amber lights are still flashing,” pointing to sticky inflation, stalled discretionary purchases and looming unemployment.

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Turning to the markets...

The JSE all share index gained 0.18% on Friday. The gold mining index fell 0.07%. Resources added 0.38%. Banks lost 0.26%, while financials traded sideways with a 0.01% gain. Industrials rose 0.35% and the platinum mining index slumped 0.46%.

London's FTSE100 rose 0.62%. The Dow Jones climbed 0.37% and the Nasdaq slid 0.13%.

Tokyo's Nikkei closed 0.55% up. Hong Kong's Hang Seng jumped 2.38%.

Brent crude is currently trading at $65.90 per barrel.

Spot gold's trading at $943.90 and platinum was last quoted at $1181.00.

And here's how the rand is performing against the major currencies:
R/$ 8.02
R/₤ 13.15
R/€ 11.36