/ 25 April 2017

​Zuma’s plan for radical economic transformation is just BEE on steriods

A young boy takes care of his siblings at home in a village in Komatiepoort while his parents are out working.
A young boy takes care of his siblings at home in a village in Komatiepoort while his parents are out working.


Long live poverty! Where would the rich be without the poor? More particularly, where would Zuma be?

Failure to recognise these questions leads to a too easy dismissal of the ANC’s currently loudest and most persistent war-cry: radical economic transformation.

Eusebius McKaiser is hardly alone in rubbishing the term as meaningless. Supposedly without meaning, he offers a functional analysis of the phrase and concludes that its function is to persuade President Jacob Zuma’s left allies that he “is still committed to fighting economic injustices inherent in a neoliberal, capitalist economic order”.

The difficulty for McKaiser is that the left fully agrees with him about the phrase being meaningless; it cannot, therefore, have McKaiser’s functional role.

Yet it cannot be denied that it is an idea whose time has come. In McKaiser’s words it “is now almost as much a part of our South African lexicon as koeksister … and Nkandla”. This reality forces us to look for the meaning it manifestly must have, despite the readiness to discard it as being vacuous.

At its simplest, the power of the phrase allows the ANC (and not only Zuma but also such “alternate” leaders as Cyril “Smell the Coffee” Ramaphosa) to reassure itself and its faltering supporters that it has “a plan”. A plan that additionally allows the ANC to attribute South Africa’s new junk credit status and the vicious attacks on Zuma as counter-revolutionary reactions by “white monopoly capital”.

This use of the race card alerts us to the meaning and purpose of radical economic transformation. White monopoly capital is almost certainly even less widely understood than radical economic transformation. Instead, what is immediately understood is the “racial” aspect of the term.

“Whiteness” evokes instant recognition, along with the anger that animates its undoubted power and popularity. More than wealth and whiteness being seen as synonymous, wealth is seen as an exclusive and automatic property of “whiteness”.

The race card would lose some of its appeal if white monopoly capital were its only face; poverty is the other side of the card and poverty in South Africa has a black face. This is the ace in the radical economic transformation pack.

It enables radical economic transformation to be presented ­— in the name of “the people”, the overwhelming black majority — as a just struggle against white monopoly capital, whose uncontested wealth derives from the white supremacist apartheid state.

Now comes the sleight of hand. The beneficiaries of radical economic transformation will not be — more importantly, cannot be — the people in whose name the transformation struggle is waged. The poor will still be with us, in more or less the same numbers. And they will still be overwhelmingly black. The reproduction of these features is guaranteed because, despite claims to be “radical”, the transformation leaves the economic fundamentals untouched.

Zuma is, for once, unfairly accused. He has repeatedly and clearly explained what he means by radical economic transformation. It is his detractors who do not listen.

His State of the Nation address (Sona) in February this year cannot be clearer. In it, he addresses all three components of radical economic transformation: white monopoly capital, which is the cause of black poverty, which in turn legitimises the black elite being the exclusive beneficiaries of the transformation. Against the accusation of his policy being “gibberish”, it bears quoting him at some length. Unless otherwise indicated, all the quotes below are from Sona.

White monopoly capital
“The gap between the annual average household incomes of African-headed households and their white counterparts remains shockingly huge.”

“White households earn at least five times more than black households …”

“Only 10% of the top one hundred companies on the Johannesburg Stock Exchange are owned by black South Africans …”

“The representation of whites at top management level amounted to 72% whilst African representation was at 10%.”

Turning “whites” into a monolithic, single entity with one voice and automatically shared ideas, values and behaviours, all of which are deeply racist, adds to the morality and urgency of the transformation. Speaking at the Chris Hani memorial, Zuma said: “There is a resurgence of racism in our country. It is also clear that racists have become more emboldened. The marches that took place last week demonstrated that racism is real … Many placards and posters displayed beliefs that we thought had been buried … with some posters depicting black people as baboons … We cannot allow and assist racists to take our country backwards.”

Black poverty
“Political freedom alone is incomplete without economic emancipation.”

“What do we mean by radical socioeconomic transformation? We mean fundamental change in the structure‚ systems‚ institutions and patterns of ownership‚ management and control of the economy in favour of all South Africans‚ especially the poor‚ the majority of whom are African …”

“Twenty-two years into our freedom and democracy‚ the majority of black people are still economically disempowered. They are dissatisfied with the economic gains from liberation.”

Addressing the National House of Traditional Leaders, on the land question, Zuma said: “You can’t have a Constitution that has clauses that makes people remain in poverty … If you are in poverty you don’t have dignity.”

Prosperity for the black elite
Zuma’s speech in February provides commendable detail about how the state will promote the interests of the rich and aspirant rich among the black elite. The following are no more than tasters:

“Government will utilise to the maximum‚ the strategic levers that are available to the state. This includes legislation‚ regulations‚ licensing‚ budget and procurement as well as broad-based black economic empowerment charters to influence the behaviour of the private sector and drive transformation …”

“The state spends R500-billion a year buying goods and services. Added to this is the R900-billion infrastructure budget. Those budgets must be used to … give black South Africans opportunities …”

“We would like to see black people involved directly in business‚ owning factories …”

“Mining has always been the backbone of our economy and an important foreign exchange earner. The mining charter is currently being reviewed. It is aimed at helping the country to deracialise the ownership of the mining industry.”

Ramaphosa has recently begun expressing Zuma-like views, both of whom promote a black economic empowerment on steroids.

Far from being meaningless, radical economic transformation is a coherent strategy of using existing legislation to promote the narrow class interests of the black elite and to invoke black poverty as the legitimisation of racialised action against white wealth.

The transformation, it must be emphasised, leaves untouched the system that produces poverty, unemployment and inequality.

Undermining this strategy is the increasingly bitter factional battle in the ANC for political control of the state. This battle, because it threatens the soul of the ANC, as well as the Constitution, the rule of law and the morality of South Africa itself, is making possible a broad-based opposition to the ANC.

Therein are the unintended consequences of the ANC’s radical economic transformation. Therein is the hope for the rest of us.

Jeff Rudin is a research associate for the Alternative Information and Development Centre.