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Eugene King
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BEE: South Africa’s great injustice

06 November 2013, 14:00

BEE or Black Economic Empowerment is a tool employed by the South African government supposedly to address the racial injustices of the past and to also redress the economic imbalances created by South Africa’s past apartheid system. This policy framework is presently recognized with the acronym BBBEE for Broad-based Black Economic Empowerment. I will continue calling it BEE in the article going forward, because apart from small ‘cosmetic’ touches here and there, it is essentially the same thing. BEE and its close cousin Affirmative Action in the Employment Equity Act haven’t gone without any criticism from many sectors, fairly or unfairly so. 

Some of the critics of BEE argue that this tool is used as a form of “reverse apartheid” in which the previously disadvantaged group (blacks in general and Africans in particular) is given preference over the other formerly advantaged group (whites) thus intentionally disadvantaging the white minority. The argument is that using race as a tool for redress results in a system in which one race becomes the determining factor in employment opportunities and meaningful economic participation. Many alternative solutions have been offered which are thought to meaningfully address the racial injustices of the past while also attempting to redress racial economic imbalances. 

My aim in this piece is not to address the merits (or lack thereof) of the criticism of BEE, nor even to look at the rationale behind the BEE policies and the goals to which the policies are supposedly aiming towards. I would like to argue that BEE (in its current practiced form) is actually a great injustice and may have actually been intentionally designed to be so. The injustice however, is not towards the white minority, but towards the Blacks in South Africa, particularly the African majority. 

Let me be quick to qualify this with a preface that when I say ‘BEE’ here I’m not necessarily talking about the specific contents of the policy itself nor the rationale behind it, but rather the overarching ideology upon which the contents of the policy are based. 

The question I begin with is this; whose idea is/was BEE as is known and practiced today? The prevailing presupposition is that BEE is a grand initiative of the ANC aimed at uplifting the general Black population economically. Some even argue that it is a policy deliberately designed by the ruling party to uplift Black people even at the expense of White people, but history tells a different story and strikes a blow to such a perception. 

Let’s first put this into context. In the 1950’s a couple of multiracial organisations in South Africa formed a Congress Alliance which was an anti-apartheid coalition which was led by the ANC. The other organisations which participated in this alliance included the allies of the ANC, the South African Indian Congress, the South African Congress of Democrats and the Coloured People’s Congress. The common characteristic of this alliance was the demand that “The People shall govern”. 

In 1955 this alliance came up with the now “infamous” ‘Freedom Charter’ which was basically a summary of ‘freedom demands’ of ordinary South Africans of different races as was surveyed by the leaders of the alliance. The charter was officially adopted in Kliptown on 26 June 1955 at the ‘Congress of the People’. The Charter made these demands among others; 

·  Nationalisation of the Commanding heights of the economy.

·         For land to be distributed equally among all people.

·       Free and compulsory education, irrespective of colour or race etc 

The congress was pretty clear and in agreement about how the country would go forward in addressing the economic imbalances in the society in order to form an equal and non-racial society. 

In an article published in 1956, Nelson Mandela explained the Nationalisation clause in the Freedom Charter as follows: 

The charter strikes a fatal blow at the financial and gold mining monopolies that have for centuries plundered the country and condemned its people to servitude. The breaking up and democratisation of these monopolies will open up fresh fields for the development of a prosperous non-European bourgeois class. For the first time in the history of this country the non-European bourgeoisie will have the opportunity to own, in their own name and right, mills and factories, and trade and private enterprise will boom as never before. 

A couple of years later, on the 15th January 1990, Nelson Mandela wrote a letter in which he made a full statement on where both he and the ANC stood with regard to how they were to go about redressing South Africa’s economic imbalances. He wrote: 

The nationalisation of the mines, banks and monopoly industries is the policy of the ANC, and a change or modification of our views in this regard is inconceivable. Black economic empowerment is a goal we fully support and encourage, but in our situation state control of certain sectors of the economy is unavoidable. 

It is clear from many historical documents that Nelson Mandela’s position and that of the ANC was never swayed with regard to how they intended to go about redress from the 1950’s up until and including 1990. Nelson Mandela’s brand of Black economic empowerment included a complete overhaul of the national economy, where the state decisively intervenes to change the very structures of the economy. 

The question then becomes, what happened in the period between 1990 and 1994? The shift seems to have started in 1991 when Nelson Mandela (then the deputy President of the ANC) released a statement in which he stated that his party was prepared ‘to abandon its long-held policy of nationalisation if the business community could provide an alternative, which would redress the economic imbalances in the country.’ I think this is exactly where the ball was dropped and the African majority was further disadvantaged. 

History has it that it was not until 1992 at that fateful conference at Davos at the World Economic Forum when Nelson Mandela finally and completely dropped his pursuit for Black economic empowerment through nationalisation. The world’s bankers and industrialists (basically the world’s monopoly capitalists) finally convinced Nelson Mandela and eventually the ANC to drop their pursuit for nationalisation. Having now dropped nationalisation, Nelson Mandela and his party now had to resort back to his appeal of 1991. 

Now we go back to the question I asked earlier; whose idea is BEE as is known and practiced today? The answer is that BEE is an invention of South Africa’s monopoly capitalists or economic oligarchs. These were, and still are, a handful of white business men and their families (the ‘business community’ that Mandela appealed to in 1991) who control the commanding heights of South Africa’s economy i.e. mining and its associated chemical and engineering industries, and finance. 

The economic emancipation of the general Black population was finally relegated to the monopoly capitalists, and the structures of the economy was to be left intact thus maintaining the status quo, both in terms of economic and land ownership. Nelson Mandela and the ANC basically told these ‘business people’ to continue in their ownership of South Africa’s economy and to give to black people whatever crumbs that falls from their tables. Black people, on the main, where further relegated to the side-lines of the economy and reduced to mere observers and mere recipients of ‘Aid’. 

Different companies, most if not all, who historically had close association with the apartheid vanguard movement, the National Party, obliged to Mandela’s appeal as it guaranteed the maintenance of the status quo. It all started with the opening and operation of the flagship BEE Company New Africa Investment Limited (Nail) by Sanlam in 1992, with the help of the National Party government-controlled Industrial Development Corporation (IDC), a State-owned industrial development bank. This was followed by the opening of Real African Investment Limited (Rail), which was sponsored by the mining giants Anglo American Corporation. 

Different kinds of shares and funds were (and still are) dispersed through these kinds of ‘investment’ vehicles, which are controlled by and are to the benefit of politicians. The black political elites are, in the essence of this equation, “the previously disadvantaged group” who this kind of policy was supposed to address. These kinds of setups are the reason why some of our political leaders where transformed into multi-millionaires overnight, without having to even lift a finger. It was, and is, a win-win situation for the monopoly capitalists and the political elites, but a great disservice and injustice to the general black population. 

The BEE setup is such that the previously disadvantaged group (supposedly the black) extract ‘reparation’ from those who caused them to be disadvantaged. The wrong-doer (or culprit) here is then identified as the white-owned businesses, and even the state for many ‘politicians’. The simple logic of this setup is that the culprit will then transfer resources into the hands of the ‘victim’ (which are the black political elites in the grand scheme of things). 

Now here’s what I think is the basic flaw, and thus injustice, with this BEE framework, both at a mirco-level (that of employment equity) and marco-level (that of ownership). 

·         In order for the perceived wrong doers to pay this reparation, they will have to maintain their privileged position. Basically the monopoly capitalists maintain their economic power and control.

·         For the victim to extract ‘reparation’ they have to maintain their state of victim-hood and weakness. This is the position that all black people have to assume in the first analysis in order for BEE to be seen as ‘effective’. 

Such a setup leaves the economic structures intact and also guarantees the maintenance of the status quo. The best it does is to merely transform the ‘previously disadvantaged’ into a consumer of goods and services which are still in the same hands.  

This is exactly what BEE on a grand scale was intended to do from its very inception, to get a few political elites to eat from the ‘same table’ with the monopoly capitalists and for all to continue with life as has always been. Black people now suffer a double injustice; they suffered apartheid, and now they have to continue in their suffering because their leaders have chosen to abandon their plight in order to collaborate with their former oppressors to further oppress them. 

Contrary to popular belief, BEE is primarily a great injustice, well devised, to the general black population because it gives them false hope that they will one day finally own their economy through this process of ‘transfer’, whereas this BEE actually only guarantees that they will forever be economic side-liners and slaves to capital.  


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