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Political Uncertainty Fuels South Africa's Economic Woes; "Moral Failure" of Harvard Business School Elite; London's Migration Museum
Aired April 27, 2017 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[14:00:15] CHRISTIANE AMANPOUR, CNN HOST: The South African finance minister set by President Zuma tells me that his party, the ANC needs to
change course or face the people.
(BEGIN VIDEO CLIP)
PRAVIN GORDHAN, FORMER SOUTH AFRICAN FINANCE MINISTER: There are many of us who are extremely worried that if we continue as we are in the African
National Congress, we are likely to lose the 2019 election.
(END VIDEO CLIP)
AMANPOUR: Plus, is the Harvard Business School still a force for good in the world? Not according to the author of "The Golden Passport." Duff
McDonald joins me live.
Good evening, everyone, and welcome to the program. I'm Christiane Amanpour in London.
It was once Africa's largest economy, a beacon of prosperity on the continent. Now dark clouds hover over South Africa's fortune. And they
got even darker when its credit rating was downgraded to junk status earlier this month after President Jacob Zuma fired his respected finance
minister Pravin Gordhan and other cabinet ministers as well.
In a moment, my interview as even inside the ANC there are mounting calls for Zuma to step down. The country's deputy president Cyril Ramaphosa says
the rainbow nation faces its worst crisis since the end of apartheid.
CNN Money's Africa correspondent Eleni Giokos walks us through this story.
ELENI GIOKOS, CNN MONEY AFRICA CORRESPONDENT (voice-over): It was South Africa's worst kept secrets. After months of speculation --
(On-camera): What's your stance finance minister? Is your job safe after the announcement of these measures?
GORDHAN: Who knows? I have decided to made changes to the national executive.
GIOKOS (voice-over): At the end of March, midnight announcement from President Jacob Zuma, that purged several in his cabinets, including
respected finance minister Pravin Gordhan.
GORDHAN: We hope that more and more South Africans will make it absolutely clear that our country is not for sale.
GIOKOS: Gordon was long seen as the protector of the treasury, from a scandal-plagued president.
GORDHAN: The president has failed to uphold, defend and respect the constitution as the supreme law of the land.
GIOKOS: Throughout his term, Zuma has shown an uncanny ability to deflect.
GORDHAN: Why should I pay the man who don't even know how much?
GIOKOS: Or simply ignore the calls for his removal as the list of allegations against him continues to grow. From public funded upgrades of
the sprawling private mansion to more than 700 charges of corruption.
UNIDENTIFIED FEMALE: Happy birthday! Happy birthday!
GIOKOS: Zuma has long denied any wrongdoing, and just this month comfortably celebrated his 75th birthday in style.
But the cabinet purge, say critics, may just be one step too far. For one, the markets reacted just as quickly as the masses with a downgrade of the
country's credit to junk status by two of the country's biggest agencies. And joining the chorus of discontent Zuma's own deputy president.
GORDHAN: And I told the president so that I would not agree with him on his reasoning to remove the minister of finance.
GIOKOS: Cyril Ramaphosa's rebuke is a rarity among senior ANC officials. The deep division so apparent in public now playing out in the upper
echelons of power.
Zuma's next test could come as early as next month with an expected vote of no confidence in parliament. And for that, the country's liberation heroes
are calling out the ruling party. Remember the struggle, they say.
FRANK CHIKANE, VETERAN ANC INSIDER: To come back out of prison and find yourself in a situation where the party that you fought for and with takes
positions that are contrary to what you fought for, that's a tragedy.
GIOKOS: Only then, they say, will the ANC be able to renew its promise. Eleni Giokos, CNN, Johannesburg.
AMANPOUR: So Gordhan was fired a month ago. He joined me from Johannesburg for his first TV interview since then on Freedom Day, which is
the anniversary of the country's first Democratic elections in 1994 when black and white voters cast their ballot together to elect Nelson Mandela
Gordhan told me the ANC now owes it to the people to clean up its act and get its house in order.
[14:05:00] AMANPOUR: Mr. Gordhan, welcome to the program.
GORDHAN: Thank you very much for having me. And it's a pleasure to be with you.
AMANPOUR: You are known from everything I know about you, everything I've read, as essentially, you know, one of the great anti-corruption fighters
that -- I can't find a bad word said about you anywhere in any of the research, except the president who suggested to his allies that they had
uncovered evidence that you were plotting to undermine him.
GORDHAN: No. The answer is simply no. And this was based on some intelligence report which was later found to be false or unbelievable. And
I am a loyal patriot and South African, and somebody who has been an activist in this country for over 40 years. So that kind of nonsense is
precisely that is nonsense.
AMANPOUR: First and foremost, what does your dismissal say about the commitment to fight corruption? Because you were one of those known for
struggling relentlessly against it.
GORDHAN: Once again I must say that there are a number of people in government and outside of government and in leadership positions in our own
political party who are profoundly committed to eradicating corruptions.
Secondly, as you might know we've had a report from an institution called The Public Protector last year which mapped out some of the kinds of
corruption between certain families and certain state institutions that it would appear is taking place and should be subjected to more thorough
investigation by judicial commission of inquiry.
And most South Africans would agree that such a commission would help to clear the air, understand the magnitude of what is going on, unearth who is
fundamentally benefiting from this type of corruption that is actually taking place and that the law needs to take its course if profoundly wrong
things are actually seen to be done.
AMANPOUR: Does that include President Zuma?
Well, there are all sorts of allegation, as I said. And I think the best way to work out whether the allegations stick or not, whether it's person A
or person B is to have a thorough investigation, get this judicial commission of inquiry off the ground, let anybody and everybody who has
facts related to any kind of corruption on anybody's part -- put those facts before a senior judge in this country.
AMANPOUR: Can I ask you directly, do you have any information that might implicate President Zuma in any acts of corruption? That's a direct
question to you.
GORDHAN: No, I don't have any personal information. But as I said, there are all sorts of suggestions, not just about the president but about people
in the private sector and people in the public sector. And that information needs to be tested.
AMANPOUR: Let's get to the heart of the troubles within the ANC and ask you to comment on this.
One of your former presidents said in an interview that was carried last weekend, the ANC may have to hit, quote, "Rock bottom" before it can be
motivated to renew itself.
Is he right?
GORDHAN: I think there are many of us who are extremely worried that if we continue as we are in the African National Congress, we are likely to lose
the 2019 elections.
But if we, like any business organization or political organization, fail to master the right leadership, stick by the right kind of values and do
the right thing by the organization and the people of South Africa, then of course we will, as an organization, fail.
And one so hopes that by the end of the year we are going to be able to find the courage that is required and the boldness that is required to
steer the ANC in a very different direction.
As you see, I'm an optimist by nature. And let's see what we can actually achieve.
AMANPOUR: Well, you have just raised the specter that you agree that you may very well, if you stay on this course, lose the 2019 election.
So do you have any faith left in the leadership of President Jacob Zuma? Should he step aside?
GORDHAN: Well, you know, we have an elective and general national conference of the ANC in December this year when a new leadership of the
ANC will be elected. So I think the opportunity is certainly there for us to go through a process where we implement what we've been saying, which is
that the ANC needs to renew itself. It needs to find its inner set of values again, and sense of mission in terms of serving South Africans. And
if it doesn't, then there are obviously the kinds of consequences that we are talking about.
[14:10:00] AMANPOUR: Do you have any faith left in the leadership of President Jacob Zuma? You personally.
GORDHAN: Well, there is no one person that actually leads a big organization by the ANC --
AMANPOUR: Yes, but he is the president. He is the leader of the party, minister.
GORDHAN: I know, but we in South Africa, we have a culture of what we might call collective leadership. So I belong to the national executive of
the ANC and I must share some of the burdens of the ANC not being able to do the right thing as well.
AMANPOUR: The ANC now is deeply divided then between those who support the president and those who are against the president.
AMANPOUR: Do you think the anti-Zuma camp, whoever is in that camp, should continue to serve in the cabinet -- in the services of his government?
GORDHAN: That's a question that is very much alive in our kind of context. And I think that all of us are guided by one thing. And that is how best
do we serve not any particular individual, but how best do we serve the country? And at different stages in the evolution of certainly 2017, how
do we do the right thing by the country and by the African National Congress itself?
AMANPOUR: So let me ask you specifically, Cyril Ramaphosa, vice president has been a good soldier, has only just broken his silence by calling your
firing, quote, "unacceptable."
At what point does somebody with his stature become an enabler by staying in? And at what point does he need to do something different in order to
uphold the honor of the ANC and the integrity of the ANC?
GORDHAN: Well, you know, that's the kind of question that is best asked of an independent political analyst. From my own point of view, Mr. Ramaphosa
has been extremely brave. He has spoken a truth to power, if you like, at that difficult time. And has demonstrated that he's a leader of great
mettle and one that would serve South Africa well in the future and that's a good thing.
AMANPOUR: You've talked about being an optimist.
What makes you sad about the state of affairs in your homeland and in your party?
GORDHAN: The one thing that makes me sad is that we've allowed the situation to develop where a handful of individuals in South Africa have
appeared to be able to dictate to some extent where this country goes in terms of the use of its economic resources.
We've allowed agreed to become a factor in the way people behave both in the private domain and in the public domain. So at the end of it all, we
must still remain the optimist that we have been historically. Otherwise we would not have overcome apartheid and do the best we can for our
AMANPOUR: Pravin Gordhan, ex-minister of finance, thank you for joining me.
GORDHAN: Thank you for having me.
AMANPOUR: Meantime, key development officials in Africa are warning the Trump administration not to follow through on proposals for drastic cuts in
aid to Africa. They warn that it could fuel terrorism and trigger another major migrant wave to Europe.
When we come back, a breeding ground for greed? A deep look at the Harvard Business School Club that's dominating private enterprise and public
policy. I speak to the author about his stinging new book "The Golden Passport" next.
[14:15:26] AMANPOUR: Welcome back to the program.
Now, if you were to name one credential that binds together a large swath of America's elite, it would be this. They were very likely graduated from
the Harvard Business School.
With alumni like Michael Bloomberg, Sheryl Sandberg, Steve Bannon, a Harvard MBA is a golden passport to affluence and influence. But is that
influence still being used to benefit society?
Himself a business reporter Duff McDonald has written an important new book about exactly that question. It's called "The Golden Passport: Harvard
Business School, the Limits of Capitalism and the Moral Failure of the MBA Elite."
Duff McDonald, welcome to the program. You probably raised a lot of hackles amongst people who consider themselves very privileged and very
entitled to rule our world today.
DUFF MCDONALD, AUTHOR, THE GOLDEN PASSPORT: Absolutely. And some of the early response to the book has claimed it's a little overstated and
complained about how pointed the criticism is. But somebody needed to shake these people by the lapels. They have -- for too long they have
ignored all criticism and just proceeded business as usual.
AMANPOUR: So, Duff, what was the specific area not just sort of general and criticism and this and that, but what was it that motivated you. I
mean, I read that obviously it was created when it was to benefit society, to see how capitalism could make the world a better place for its people.
But you say that it's veered away from that mandate?
MCDONALD: Absolutely. It -- you know, it was founded at a similar time of populist revolt and the rationalization that they gave to get the founding
past the people at Harvard itself was, we're going to create an enlightened managerial elite that understands their responsibilities not just to the
organizations they run but to the rest of society. And if they had it for a half century, they haven't had it for nearly half a century since. And
the place has pretty much deinvolved into just a giant money grab from all corners.
AMANPOUR: One of the articles about the book in the "New York Times" and elsewhere said, you know, questioned, is Harvard and other business schools
-- are they a breeding ground for a lust for greed. Not just greed, but a lust for greed?
And the reason I'm asking you this is because, obviously, it's not just American elite. Many of them have graduated from there. But you can come
here abroad and see also many foreign students who went to Harvard, went to the business school and are back now running either their countries or
major institutions abroad as well at this time of global economic upheaval.
MCDONALD: Yes. And, you know, I wouldn't want to criticize anyone for the ambition to better themselves, accumulate some wealth or advance their
career. But I think the problem with Harvard Business School is that it spent so much time telling itself that it's doing so much good for the
world that they managed to sort of blithely proceed doing things that fly in the face of it.
You know, for example, the current dean, Nitin Nohria. He's on the board of the Indian conglomerate Tata Sons. You know, setting aside why is the
dean of the school on the board of anything? He has been accused by the former chairman of just being a guy who carried water for Ratan Tata. So
they may say a lot and pay for lip service to improving the world, but they betray their true motivations by their actions.
AMANPOUR: You mentioned the dean. Of course, he is one of those who is criticizing you. You're saying he doesn't do justice to the school. That
it abuse its graduates with a deep sense of responsibility to society and for their world.
And he says you overlook important social contributions by Harvard Business School graduates. I mean, they have made incredible contributions to the
world, haven't they?
MCDONALD: Absolutely. And, you know, just quickly, the dean said that after admitting that he had not read the book and then said the book omits
many things. So God knows how he knows what's in the back.
And I do mention a number of their positive contributions to both the American economy and to management thought.
You know, they helped codify management. They helped lay the foundations for America and managerial supremacy. They helped America win World War
II, for God's sake.
But in more recent years what they have done, particularly in the '80s and more recently, is align themselves with the forces of greed first through
shareholder capitalism and then just through, you know, all their professors. They make multiples of their salary consulting for the
companies that they are supposed to be objectively studying.
And, you know, here's a school that's supposed to -- you know, what is the point of an institution of higher learning? They're supposed to help keep
capitalism honest and instead they have just involved into a group of cheerleaders.
AMANPOUR: Can I just play for you a graduation speech by a young man, Casey Gerald, who graduated from the school in 2014. The speech went
viral. And, obviously, it was viewed by hundreds of thousands of people. This is a little of what he said.
(BEGIN VIDEO CLIP)
CASEY GERALD, HARVARD BUSINESS SCHOOL MBA: In your hands as well as mine lies the hope for a new generation of business leaders in which each of us
becomes a pioneer, in which each of us decides to travel unknown roads in search of unsolved challenges, in which each of us commits our time and
talent not just to the treasures of today, but to the frontier of tomorrow.
(END VIDEO CLIP)
AMANPOUR: So that is hope and idealism. You have spoken with him since. How does he feel about it now?
MCDONALD: You know, Casey opens the book. And I -- with that exact speech. And my impression of it was when I first met him, I said, so,
wait, is my initial inclination off the mark? Is the school delivering on its promise? And he said, no, absolutely not. I think you misheard me.
I was beseeching my classmates to do the right thing. And he said the majority of them are still pouring into private equity or venture capital
or what have you. And, you know, I think -- there's got to be tons of people who are there, every single year who have great intentions and go on
to do good things to the world. But the message he was trying to send, which I'm trying to send in the book is, you know, all the money you make
won't buy back your soul at the end of the day.
AMANPOUR: You are, as I said, a long time business reporter. The reviews for your book have been really, you know, very good, top rated reviews.
Explain, if you can, the position of Harvard Business School, other business schools, this ethic that you are talking about at a moment when we
have an unprecedented equality gap or inequality gap between the one percent and the 99 percent.
The responsibility for instance for the 2008 crash, many laid it at the feet of many who graduated from that school and other business schools. In
other words, the business elite and nobody has been held accountable.
How does this affect society?
MCDONALD: Well, you know, one thing that HBS has been a huge part of is the creation of the whole cult of the CEO. This mistaken perspective that
you know isn't just there, but you know, in any magazine you read about business where we look at a company and we personify it. We think the CEO
is the company. And we reward them in ways that are disproportionate both to their contributions but also relative to the contributions of all the
thousands of people that also work for those companies.
So if there is any business school that you can point a finger at that has more responsibility towards helping widen the CEO to worker pay gap and
keep it there, it is Harvard.
The other thing is, you know, I point to the book to what I consider the moment of peak paradox for the school when they hired the economist Michael
Jensen in the `80s and he was a leading intellectual in the drive toward shareholder capitalism where suddenly all businesses were run for the
benefit of only one constituency, which is their shareholders.
And, you know, they claimed legal and intellectual rationalization for that position and all of it was hogwash. Basically the country got hijacked by
AMANPOUR: Duff McDonald's, "The Golden Passport," it's certainly hitting a zeitgeist moment right now. Thank you so much for joining us.
MCDONALD: Thanks for having me.
AMANPOUR: And from the Pentagon power to the depths of vulnerability, imagine a museum dedicated to refugees and migration today.
Next, we pay a visit to a new space trying to foster good will towards migrants -- yesterday's, today's, and tomorrow's.
[14:25:02] AMANPOUR: And finally tonight, imagine a world where dialogue around migrants is not marked by hostility or anger, but by compassion and
It's the world in new migration museum right here in London is trying to inspire, reminding the public that migration is not a new or a negative
phenomenon. Its first exhibits showcase photography of the 20th century migration to Britain and art done by refugees from the so called Calle
Jungle refugee camp in Paris. The museum's director, Sophie Henderson, says to understand migration, we have to delve into our shared past.
(BEGIN VIDEO CLIP)
SOPHIE HENDERSON, MIGRATION MUSEUM: I think we feel that the public conversation has been a bit unhelpful, such attitudes can be extreme and
people can take very extreme polarized views.
We believe that to tell the long story of the movement of people to and from Britain is a necessary context and back drop for current conversations
(END VIDEO CLIP)
AMANPOUR: A reminder that comes not a moment too soon. The museum will be housed in a repurposed London fire house until at least 2018, hoping to
find a permanent home soon. And let's hope that we've all learned a little about compassion by then.
That is it for our program tonight. Thanks for watching and good-bye from London.