03/07/2014

Could Lesotho’s coup be about diamonds and tax havens?

Arena / By Evelyn Groenink

It was a small note in the newspaper that caught South African columnist Marvin Meintjies’ eye: it said that the diamond-rich country of Lesotho had signed a ‘relation strengthening’ agreement with the tax haven island of Barbados”. Meintjies chuckled, imagining Lesotho’s new friends, the mining billionnaire Gupta family from India, snorkelling on Barbados’ beaches. The Guptas, also great friends of South Africa’s president Jacob Zuma, -they had been introduced to Lesotho by Zuma himself-, would probably love to deposit some mining profits in Barbados’ very friendly -2,5 % tax rate charging- banks. Meintjies and the rest of the world had already followed the issuing of diplomatic passports by Lesotho to the Gupta brothers, and the appointment of senior brother Atul Gupta as Thabanes special advisor in mid-August.

This had happened amidst severe infighting in Thabanes coalition government. Much of this had been about the Gupta’s, their mining interests and their preferential treatment by Thabane. The fighting had been so intense that Thabane had suspended parliament. With the coup on 30 August, the army reopened it. Thabane fled to South Africa, where President Jacob Zuma is now heading negotiations to craft a way forward for Lesotho.

Marvin Meintjies, pointing out that South Africa depends heavily on a stable Lesotho for its water needs, asks whether Zuma, who introduced the Gupta’s to the tiny country to begin with, should be in charge of solving the problem he created.