That Defence Minister Mosiuoa Lekota has finally admitted that the arms deal fiasco has fallen far short of creating the promised 65000 jobs comes as no surprise, Arms deal jobs short 50000 (September 7).

His colleagues in 1998 and 1999 trumpeted that squandering tens of billions on armaments was some kind of “Madiba magic” to stimulate SA’s industrial development and, in particular, job creation in impoverished regions such as Eastern Cape.

European politicians — Tony Blair, Jacques Chirac, Helmut Kohl, Goran Persson — and even Queen Elizabeth flocked to SA after 1994 to pay tribute to our new democracy with one hand, and to peddle weapons with the other. They promoted the arms deal as a Marshall Plan — spend R1 on armaments to get back R4 in offset benefits. That (then) trade and industry minister Alec Erwin and Finance Minister Trevor Manuel swallowed such garbage is telling insight into why SA suffers an unemployment rate of more than 40%. Civil society activists and even MPs who demanded sight of the offset contracts that were to produce this economic miracle were informed that the contracts were “commercially confidential”.

Media investigators in England and Sweden found that 21 out of 25 of these offset contracts did not exist, and were a scam by the armaments industry with the connivance of politicians to fleece the taxpayers in both Europe and SA.

That the arms deal is now the cause of a massive corruption scandal that threatens SA’s constitutional democracy is also no surprise.

Jacob Zuma is, however, just a small fish in the mess and a scapegoat to divert attention from the culpability of Erwin, Manuel and, most especially, President Thabo Mbeki, who chaired the cabinet’s arms deal committee.

Nor can it be true, as Lekota stated in Parliament, that the arms deal is “almost paid for”. The German frigate and submarine contracts, financed by Commerzbank, are guaranteed by the German Bundesrat until 2011 and 2016. The British and Swedish warplane contracts, financed by Barclays Bank, are guaranteed by the British government’s export credit guarantee department.

These 20-year loan agreements, signed by Manuel and verified in court as authentic, are a textbook example of third-world-debt entrapment by European banks and governments.

In contravention of the Public Management Finance Act, they have never been referred to or authorised by Parliament.

With acknowledgement to Terry Crawford-Browne and Business Day.