In writing the bulk of his extremely useful book, Making Mistakes, Righting Wrongs: Insights into Black Economic Empowerment (Jonathan Ball with KMM Review Publishing Company), journalist and commentator Duma Gqubule tries to square the circle of black economic empowerment (BEE) as economic policy.
It isn’t an economic policy. It is a political necessity with economic consequences, and we should not fight shy of that political reality because of the costs involved. To the extent that it is government policy, it has evolved in response to pressure from black business and responses from domestic established business and foreign business.
In one of the four chapters that Gqubule has contributed to the book, which also has chapters on employment equity, skills and the black middle class, he rejects what he sees as the “minimalist approach” of BEE. This, he says, “equated BEE with the development of a patriotic bourgeoisie of black managers and entrepreneurs”.
“The minimalist approach,” says Gqubule, “emphasises the distribution of privileged positions between a few people within existing structures. It does not address the need to: redistribute resources to achieve ’empowerment from below’ for the majority of the black population; radically transform power relations in society; change oppressive institutional cultures; and create democratic and inclusive decision-making structures.
“Neither does it address the need to fundamentally transform the nature of capital or the trajectory of BEE to achieve developmental objectives.”
That is in itself a tall order, to say the least.
Further on he says that employment and the quality of work should be the most important indicators of black participation in the economy.
Undermining his re-examination of BEE is that Gqubule strays into areas of macroeconomic populism that many of us thought were settled, perhaps too blithely, in the early 1990s. So he reanimates a number of economic arguments that, like Frankenstein’s monster, should have stayed dead. One of these is whether the central bank should be independent or not.
As is clear from the title, Gqubule is uncomplimentary about those, such as Finance Minister Trevor Manuel, who have in his estimation “mismanaged” the economy since 1994. His own solutions have a lightheaded and rather breathless revolutionary air about them.
It is simply too soon to say that BEE has failed, because the aims were never spelled out, and in any case, the monitoring of the results is poor. As Gqubule’s chapter on the history of BEE shows, BEE is an evolving phenomenon and has always been a hotly contested idea rather than stone tablet of commandments.
BEE will evolve further, beyond the era of compliance with codes and charters it has already entered, and hopefully towards creative solutions to empowering South Africa’s multitude of poor people.
Malaysia’s “affirmative action” for the majority of its population provided some of the inspiration for our own BEE drive, raising a vision of redistribution of opportunity going hand in hand with economic prosperity. In the foreword to the book Dr Mahathir Mohamed, former prime minister of Malaysia, raises the issue of cultural values as the key to national success.
“The real cause (of the success of other races), we discovered, was the culture — or more correctly, the value system. If the value system is right, then success will follow, but if the value system is wrong, then failure will be the result. The main components of the value system are attitude towards work, and the acquisition of knowledge and skills.”
To acquire knowledge and skills, the real push of Malaysia’s empowerment drive was education and training. Mohamed says that at one time about 25% of the national budget was devoted to education and training.
In South Africa almost 18% of the budget is spent on education, so we are not too far off. Yet spending more money is only part of the solution.
Unfortunately, Andre Kraak’s chapter on skills development does not look into why our schools and universities are not providing the quality education needed to equalise opportunities; why black parents spend the money to bus their kids to former model C schools or divert cash to private education.
Education is where empowerment should start, and in South Africa our failing has arguably less to do with “fiscal conservatism” than a continuing failure to change the poor values of many of our teachers and the system within which they work. Empowerment is not merely a matter of numbers but a profoundly political phenomenon.