Plan to empower the poor
The Black Economic Empowerment Commission’s final report, which was released last weekend, is intent on uplifting the majority of South Africans rather than building a black bourgeoisie.
Commission chair Cyril Rama-phosa said a broader definition of black empowerment was accepted by the African National Congress’s economic transformation committee two weeks ago.
The new definition proposed by the commission is that black empowerment should be “located within the context of the country’s national transformation programme” which it says is the Reconstruction and Development Programme. This should be adopted and encapsulated in legislation called the Black Economic Empowerment Act, the commission has proposed.
The commission was formed to develop a case for an accelerated national black empowerment strategy and to submit concrete resolutions on how this can be achieved to the government.
The idea was first mooted at a Black Management Forum Conference in 1997.
The forum handed over the task of driving the commission to the Black Business Council, a federation of 11 black business organisations.
The recommendations of the report will be sent to the Black Business Council for endorsement before it is sent to President Thabo Mbeki.
The building of a black bourgeoisie, or a patriotic capitalist class, had been one of the mainstays of Mbeki’s plans to restructure and deracialise the economy and society.
But the report, titled A National Integrated Black Economic Empowerment Strategy, notes that despite the implementation of the government’s transformation programme seven years ago, South Africa’s economic growth remains “disappointing”.
“Continued high levels of unemployment and ever-increasing poverty threaten to undermine the stability of our new democracy. The country still has one of the most unequal distributions of income in the world.”
This, the report says, is a reflection of the extremely low levels of black participation in the economy.
Neva Makgetla, economic analyst with the Congress of South African Trade Unions, says: “The report reflects the realisation that the majority of the blacks in the country are workers and says what should be done to empower them it is a more holistic approach.”
The document said the creation of a black bourgeoisie free of corrupt malpractices, without direct intervention from the state, is impossible.
The issue has been hotly contested within ANC circles since then. Critics of the plan said there was a chance an elite class could be created that was no different from the one that grew under the patronage of the apartheid regime.
This could still happen in South Africa. The proposed Black Economic Empowerment Act will require companies bidding for government contracts to submit black economic empowerment reports supplying details of successes in implementing the strategy, procurement to black suppliers and black ownership.
But it also recommends pumping money from the sale of state-owned assets into rural development, the establishment of a state bank to ensure access to affordable financial services and community reinvestment legislation that will forbid discrimination in lending and make it mandatory for financial institutions to reveal reasons for turning down loan applications.
The report also calls for the establishment of a national database of black suppliers for the use of the public and private sectors, an increase in rural access to affordable finance through the post office and making state assets available for land reform.
The commission recommends a much more assertive role for the state: “Markets tend to reinforce an existing distribution of incomes and assets. This is unacceptable in a country such as South Africa, where the market mechanism was deliberately distorted to allocate incomes and assets on non-price criteria such as race.”