There is an old saying that if you do not know where you are going then any place you are at is the destination.
Over the decades change management pundits have been unanimous, in demanding that any effort to change should have a well-defined plan for the future, an assessment of the current state and a clear idea of how to move from the present state to the future.
Here lies the problem in conducting a serious review of transformation in a society such as South Africa.
Unlike Malaysia, which was forced to adopt its New Economic Policy in 1970 after the Kuala Lumpur racial riots of 1969, South Africa stayed shy of setting clear and identifiable milestones for determining a level of transformation.
In 1998 the ”opposition” felt it was wise to protest against a ”quota system”, so we ended up with the Employment Equity Act relegating this function to the Commission for Employment Equity. The commission’s incompetence and irrelevance is now a matter of public record. In its five years of existence it has only issued two codes of good practice (one of which, for HIV/Aids, is still in draft format) and it has not developed any of the numerical targets and time frames that would have helped guide South Africa’s employment-equity process.
The absence of national benchmarks and time frames has led to a situation where each industry that develops an empowerment charter also comes up with its own employment-equity targets.
Thus, the financial services sector seeks to achieve 50% black managerial representation in five years; the Mining Charter has a 40% target, while the Liquid Fuels and Energy Charter has no such targets. So, in the absence of a commonly agreed upon end state or ”transformational target”, it is anybody’s guess as to whether South Africa has achieved its ”goals” for employment equity and transformation.
This problem was avoided in Malaysia where the New Economic Policy not only had a time frame (1970 to 1990), but clear targets to measure the extent to which the indigenous Malays (Bumiputera) were developed and empowered, relative to Chinese and Indian communities. For instance, there was a target to create a 40% Bumiputera economic and commercial community by 1990 and for the community to own 30% of stock-exchange equity.
These and other targets made it possible for Malaysian stakeholders to review the policy at the end of 1990 and to develop a new plan for 2020. For instance, Malaysia moved from 3% Bumiputera ownership of stock-exchange equity in 1970 to 23% — a mere 7% shy of its target. Incidentally black-equity ownership in South Africa remains at 3% after 10 years of political liberation.
While there can be no doubt that there has been progress in the development and empowerment of blacks, women and disabled people in various spheres of the South African economy the extent to which such progress is a barometer of transformation is difficult to ascertain. A cursory look at some statistics indicates that we are still ”nearer the beginning than the end”, to paraphrase a Zulu saying.
Data from various sources, including the Taylor Committee of Inquiry into a Comprehensive System of Social Security for South Africa (2002), the Economist’s World in 2003 publication, the Commission for Employment Equity Report 1999-2001 and Statistics South Africa’s Census 2000 paint a gloomy picture of economic transformation. Only 4,28-million Africans (30% of economically-active Africans) have a formal-sector job. For African women, the figure stands at 20%.
In the formal sector most Africans are in jobs that add relatively low value, with 80% earning less than R2 500 a month.
There are 980 Africans in top- managerial positions in the private sector (4,6% of the total).
There are 2 739 Africans in senior management (6,4% of the total).
There are 16 141 Africans in middle management (10,9% of the total).
Altogether, there are 19 860 Africans at management level in the private sector (9,4% of the total).
Black ownership (as opposed to artificial control) of assets on the JSE Securities Exchange is estimated at less than 3%. This figure excludes government and parastatal pension funds. Outside of about a dozen black-owned companies in the resources sector, black ownership of assets on the JSE is virtually non-existent.
Furthermore, the World Competitiveness Report of 2002 ranked South Africa last (out of 49 countries) in economic literacy; brain drain and interest in science and technology; 46th in finance skills; 47th in skilled labour availability and 48th out of 49 in ”science not adequately taught in schools”.
In terms of the Human Development Index of 2003 — a composite index that measures a country’s average score on three basic aspects of human development: longevity, knowledge and standard of living — South Africa ranked number 111 out of 175 countries.
The most worrying factor concerning these statistics is not so much South Africa’s ranking relative to other countries, but the vast differences that exist between various racial groups in the country.
Take unemployment for instance. In 2001 the Department of Labour estimated that the ”average” unemployment rate stood at 37%, but it was the black population that was most affected by this, with unemployment sitting at 47% for this segment of the population. This figure rises if one looks at the African component of the ”black” population. A similar trend can be discerned with regard to the adult literacy rate.
This scenario continues to give South Africa the unenviable distinction, which it vies for with Brazil, of being the country with the highest rates of economic inequalities in the world.
Even in the absence of transformation targets and time frames, the ”current state” leaves much to be desired and renders any talk of an end to transition nonsensical. On the contrary, the situation lends credence to continued depictions of South Africa as a nation that resembles a two-storey building: blacks mostly at the bottom and whites at the top, with no staircase to link the two.
It is not all gloom and doom though. There are continued efforts by major stakeholders to shift transformation and empowerment into higher gear. There have been commitments to black economic empowerment by some serious players in the economy — the Brenthurst Initiative and the Financial Services Charter in 2003, for example, and the Mining Charter before that. This is in spite of the perception in some reactionary sectors that economic empowerment is a risk.
The call by the Brenthurst Initiative to set clear targets and goals for transformation resonates among people like me, who were involved in the development and finalisation of the Employment Equity Act as well as the Black Economic Empowerment Act. The targets and time frames that are being set in some charters are a welcome development. At least these sectors will have a way of broadly assessing the extent of progress of employment equity, skills development and empowerment over the next decade. This way, they will be able to empirically evaluate their progress and the attainment of goals will not be left to debate and speculation.
The biggest risk, as is evident from lessons across the Limpopo, is the failure to address racial inequalities effectively and timeously. This ostrich approach must be fearfully avoided as it will lead to the type of racial instability evident in Malaysia in 1969, if not worse. The only focus over the next decade should be on the pace of transformation.
The Black Economic Employment Council is about to be inaugurated by President Thabo Mbeki. It should seize the moment and develop clear transformational goals for the country. Not only will this restore investor certainty and confidence, but it will also give us a vision and commonly understood destination by which we can assess our progress. Otherwise, far lies the end to transition.
Loyiso Mbabane is a senior lecturer at the UCT Graduate School of Business and a member of the government’s black economic empowerment task team