The discontent over the trajectory of black economic empowerment (BEE), long simmering within the African National Congress alliance ranks, has finally burst into the open. The Congress of South African Trade Unions’s Zwelinzima Vavi and Minister of Finance Trevor Manuel have both criticised the get-rich-quick mentality among the super-empowered (the BEE-llionaires) and the aspirants on the lower rungs (the wanna-BEEs). ANC spokesperson Smuts Ngonyama and ANC businessman Saki Macozoma have responded. ANC secretary general Kgalema Motlanthe has also weighed in.
Of course, the participants are often talking past each other. For instance, Vavi poses some pertinent questions: “How can we end competition among our leaders around consumption … and return to competition around service, solidarity and activism? How can we stop politics becoming discredited in the eyes of ordinary people if political office translates into a style of living way beyond the people who put us in office in the first place?” (“A lion’s den is not a sheep’s pen”, September 24.)
Ngonyama responds by asserting that: “Every South African has a right to engage in any lawful business activity they wish.” (“The challenge is to prevent a conflict of MP’s interests”, September 24.) True enough. But Vavi was addressing himself to the challenge of nurturing a liberation movement committed to social solidarity. Ngonyama shifts to a discussion about individual rights.
Of course, Ngonyama realises he must somehow marry his market-place individualism to the organisational questions Vavi is posing. So he proceeds: “Public representatives are no different … To deny them this right would be unconstitutional and given the transitory nature of public office — could be quite destructive. Public office, by its nature, and quite correctly, offers limited job security. A public representative … can only ever expect to serve in that position for a five-year term of office … Hardly the kind of situation that allows for long-term career planning. Nor should it.”
Ngonyama is implicitly saying the ANC should have no cadre development policy. ANC public representatives are on their own, they would be well advised to minimise parliamentary work and devote their time (paid for by taxpayers) to personal business interests, like the farmers and lawyers who populated the parliamentary benches during the apartheid era.
Macozoma’s endeavour to defend the legitimacy of BEE is equally intriguing. He asserts: “There is no other practical and effective instrument for South Africa to deracialise the economy within a reasonable time” (Sunday Times, October 10). One assumes the central task in deracialising our economy lies in overcoming the grinding racialised poverty within which the majority of black people are trapped. But to the critics who say that BEE is not alleviating poverty, only enriching a few, Macozoma has a candid response: “What did they expect? Where have you ever seen a capitalist system producing socialist results?”
Hang on, weren’t we told by Macozoma in his wanna-BEE days that BEE advancement was crucial to overcoming racialised poverty? What did he expect us to expect? I am tempted to rest my socialist case right here.
But somehow I think the protagonists of BEE could be making out a much better case, even within the constraints of a capitalist system. Macozoma does edge towards a more strategic argument.
He correctly notes that some critics of BEE, those located in the Democratic Alliance for instance, are calling for “broad-based empowerment” in order to diffuse a token proportion of ownership stakes. A diffusion that will leave untouched the strategic dominance of incumbent white owners. There is something in this, but Macozoma flinches when it comes to spelling out exactly what has to be done strategically by the newly empowered in the commanding heights. He simply ends with a weak metaphor, celebrating “biodiversity” in boardrooms. (Are black capitalists genetically different from white ones?)
In my view, the most useful intervention has come from Motlanthe. He makes an important distinction between the simple transfer of some economic power on the one hand, and the active transformation of economic power on the other. His argument is that BEE so far has been characterised largely by the former and too little by the latter.
The fundamental question that Ngonyama and Macozoma are failing to engage is: What in our current economy (beyond the superficialities of pigmentation in boardrooms) requires systemic transformation?
There is much that can be said on this topic. Our so-called “first economy” is deeply flawed. It is highly concentrated, as the recent government report on the banking system noted, stifling medium and small businesses; it is capital-intensive and insufficiently labour-absorbing; it is overly export-oriented and import-dependent; the domestic market is narrow; levels of fixed capital formation and of labour skilling are inadequate; and the conduct of our large corporations in the region is typically predatory. These systemic features are perpetuating the crisis of racialised underdevelopment in our country and region.
This is what must be transformed. If BEE is to be supported, then its protagonists will have to make out a much clearer case on how their personal promotion and enrichment will contribute to such a strategic transformation agenda.
Jeremy Cronin is an African National Congress MP and the deputy secretary general of the South African Communist Party