The absence of broad-based black ownership of the South African economy may lead to economic insecurity and possibly even political instability, says Inkatha Freedom Party leader Mangosuthu Buthelezi.
Speaking at the Cape Town Club, he said in a prepared speech that black economic empowerment in South Africa had been given a bad press, but the “stark fact” was that of the R42-billion worth of BEE deals so far, R25-billion or about 60% had gone to two oligarchs in the African National Congress.
He did not name them.
Buthelezi, who served as Home Affairs Minister in the post- democracy Cabinet from 1994 until he was dropped in April last year, said: “We do need BEE for the reason that the majority of South Africans only hold political, but not yet economic power.”
“I believe that the absence of broad-based black ownership might result in political alienation, economic insecurity and, possibly, even political instability. It is how this government goes about empowering blacks that is wrong.”
“BEE, in my view, must be achieved within the constraints of maintaining market integrity and attracting foreign direct investment. The government should give opportunities to companies that comply with social transformation requirements and on their ability to add commercial value to the business.
“Potential conflicts of interests must be avoided and BEE transactions must be weighed against the long-term objective of broadening ownership of the South African economy. On any other terms, BEE will not succeed.”
Buthelezi said the “ever present disjuncture” in government thinking — with Cosatu’s left-leaning economic positions on the one hand and the more conservative Gear on the other — was borne out by the “uncomfortable fact” that people who were not part of the mainly urban modern sector of society were more disadvantaged now than they were under apartheid.
He said a “heart and head split” in government thinking was also expressed “in its reluctance to develop standard anti-trust and a pro-competition legislation to break the grip of our private and public cartels and monopolies on our economy”.
“Our bank charges, for example, are amongst the highest in the world. What incentive is there for poor people to place their money into bank accounts? Yet without banking facilities, people do not have access to loans to purchase property or start their own small businesses.
“These are the prerequisites of a functioning market economy, from Chile to New Zealand, and from New Zealand to Estonia. The latter has one of the lowest rates of taxation in the world,” said Buthelezi, whose party has 28 seats in the 400 seat National Assembly and is junior partner in government in the KwaZulu-Natal province. – I-Net Bridge