Professor William Gumede of the Wits School of Governance recently lamented the terrible failure of BEE because, he estimates, over R1 trillion moved between around 100 politically connected individuals.
He goes on to say:
“South Africa’s BEE model has created a model of corruption because people set up companies just to get a contract.”
While Professor Gumede’s comments are both salient and infuriating, I think they are still beside the point. Even if B-BBEE had not been corrupt, it still would have only benefited a very small number of people and left many of South Africa’s structural issues untouched. B-BBEE is understandably an emotive subject, but one that tends to generate more heat than actual light.
It does not solve the problem that over 80% of Grade 4s in South Africa cannot read or write for understanding and are thus functionally illiterate and innumerate. They are often passed through the school system because of perverse incentives, or drop out altogether.
By my guesstimates over half of this country’s population is functionally illiterate and innumerate, and the often silent part of conversations that lead to justifications about B-BBEE is that the majority of black people in this country are not competing in the same labour marketplace as white people and most Indian people.
Yes, a lot of this country’s problems are concerned with race, but it seems many of our most prominent voices do not understand that just because a problem is racialised it does not mean the solution to it has to be. In fact B-BBEE and even affirmative action and the conversations of redress around them are never going to solve the structural problem of a large and dejected black underclass that struggles with poverty, food insecurity and violent neighbourhoods.
Small black elite
Just as the Apartheid government used government diktat to create a small white elite and middle class, the ANC has reproduced this pattern with a small black elite and middle class all while a large and dejected black underclass remains.
From that viewpoint, it makes very little sense that B-BBEE and affirmative action garner so much attention and political space. It could even be argued that these are political wedge issues built on the politics of envy, rather than any meaningful redress of wrongs and progress of society.
I think this is an obvious point to make (seemingly it isn’t for all our main political parties) that an improving labour market (better labour market policy, industrial policy and a regulatory and tax environment) would over time render discussions about affirmative action moot. A better education system with the necessary remedial elements would eventually bring in better jobs for the children of many poor and working-class black people. It seems that our economy, at least for now, is not fit for purpose.
Alternative
Not to overdo beating this drum, ever brilliant Dr Anthea Jeffery of the IRR has offered an alternative to B-BBEE in the form of Economic Empowerment for Disadvantage or EED. Professor Gumede echoes much of what Dr Jeffery has written on this subject by saying:
“R1 trillion could have been spent more effectively on things other than enriching a small group of connected individuals…companies could have spent the money on housing for black South Africans or sponsoring schools in Soweto…this would have delivered a much wider impact….
Tata did that in India, and Mitsubishi did it in Japan. These educational empowerment projects were highly successful.
When Starlink enters South Africa, for example, it can sponsor a group of underprivileged schools to enhance their mathematics and science education.
This will ensure that a large group of children is empowered and better equipped for further education or entering the workforce.
We want to create millions of black South Africans who have R500,000 each, not a small group of billionaires.”
In other words, both Dr Jeffery and Professor Gumede understand acutely that this country has to change and that because of demographics that change has to be driven by a sharp rise in black prosperity over time but that racial politics driven by the politics of envy are not the solution.
They also understand the economics is not a zero-sum game and that a sharp rise in black prosperity does not have to be built on the policy that “takes” from white people; the kind of policy that largely flames racial animus without challenging the structural poverty and violence that is a feature of the black underclass.
[Image: Clker-Free-Vector-Images from Pixabay]
The views of the writer are not necessarily the views of the Daily Friend or the IRR.
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