As the Mail & Guardian‘s recent supplement on black economic empowerment (BEE) underlines, neo-liberal forces are deflecting real, broad-based BEE.
BEE should refer to the overall empowerment of the majority who suffer under the legacy of apartheid capitalism. However, it is too often used in a narrow sense, to refer to the advancement of a black minority through equity acquisitions and individual promotion to senior management. This amounts to BEEE — black elite economic empowerment.
South Africa suffers from mass poverty, which is overwhelmingly black. Unemployment and vulnerability to disease remain over- whelmingly racialised (and gendered). Job creation for the unemployed is thus the top BEE challenge.
All other transformational programmes — building a developmental public sector, the provision of water and electricity, telecommunications and transport infrastructure, integrated rural development and urban renewal, education and skills training, the fostering of micro-enterprises and cooperatives, and the transformation of the financial sector — are integral to a wider sense of BEE.
Insofar as private ownership of the main means of production persists, the South African Communist Party will not oppose the deracialisation of capitalist ownership. But this should not deflect the government from more substantial economic transformation challenges.
The deracialisation of capitalist ownership that has occurred has been extremely limited and uneven, even for direct beneficiaries. It has tended to rest on equity acquisitions for a few black individuals, based on loans that have left real power with established corporations and their owners. In the first years after 1994 black share ownership on the JSE Securities Exchange rose rapidly to more than 7%. But with the 1998 decline in share values, it dropped to a paltry 2%.
While black capitalist ownership may provide some leverage, it should not be overstated. How much will depend on the effectiveness of our liberation movement and the government in directing and disciplining black and white capitalists.
The argument for BEE uses the idea of a “black bourgeoisie”, as if there were two capitalist classes instead of one class segmented by sector, size of enterprise, principal market (domestic or export) and, to some extent, race and ideology. The class (black and white) is engaged in the maximum extraction of profit from labour, leading to poverty wages, unsafe working conditions, poor benefits and continuing discrimination, as the recent report of the Employment Equity Commission shows.
The SACP accepts that the emergence of a black capitalist stratum is inevitable and may even have advantages. We, and the broader national liberation movement, should continuously foster — through persuasion, accords, compulsion and regulation — a patriotic commitment from black (and white) capitalists, to the extent that this is possible.
However, the stratum must explain how it will ensure job creation, greater investment in community development, more ethical business practices and stronger national economic sovereignty.
BEE is also often associated with the promotion of black individuals to senior management. This holds more transformational possibilities — the promotion of individuals connected to poor working-class communities can help change private and especially public-sector institutions.
However, the core objective of managerial BEE strategies should be overall and collective transformation.
Unfortunately, the government’s recently released BEE strategy document suffers from the same malaise. It both appeases white capital and responds to the increasingly vocal black capitalist class, without tackling the fundamentals.
The strategy constrains BEE within current macroeconomic policy, which remains contractionary and conservative. By relying on high interest rates to control inflation, tight monetary policy has raised the cost of credit and brought about cuts in real spending. These have slowed social service delivery and infrastructure development, undermining real empowerment.
The government-appointed BEE task team does not include worker and community representatives. The strategy and instruments to be used for BEE focus narrowly on changing the economy at the top in terms of management and equity ownership.
Hopefully, the Growth and Development Summit and other processes will address these weaknesses.
The restructuring of public assets should be about the broad empowerment of millions of black South Africans through access to jobs and affordable basic services. But restructuring also presents opportunities to advance BEE in the narrow sense.
Telkom was owned and managed on our collective behalf by a democratically elected government and until recently belonged 100% to all South Africans. More than two million phone lines have been cut in recent years because of poverty. The sale of a major telecommunications resource, discounted or otherwise, promotes black economic disempowerment.
Since its part privatisation in 1997 Telkom has retrenched 20 000 workers. Will future low-income, working-class shareholders applaud if another 20 000 are fired to preserve “shareholder value”? If more phone lines to poor communities are disconnected in the name of “profitability”? Or if domestic call prices continue to rise so that a dividend can be paid?
Mazibuko K Jara is the media, information and publicity officer of the South African Communist Party