In defence of the DA's BEE proposal

2018-08-13 14:57

So, recently the DA’s federal executive announced that, according to them, the policy of Black Economic Empowerment has failed and that it should be replaced by an alternative. Recently I have also read a book, written by Thomas Sowell, on the empirical facts and outcomes of affirmative action policies in the USA, Malaysia, India and Sri Lanka.

Many of the empirical results shown in the book, and critiques levelled against affirmative action, is relevant to the South African context and should be added to the current conversation surrounding the topic.

Firstly, it has been found that, once affirmative action policies have been put in place, it tends to stay in place indefinitely and is extremely hard to repeal, since the groups benefitting from it would not want to see their benefit revoked. This is especially relevant in countries in which the majority of the population benefits from affirmative action, since any party calling for its repeal can be strongly punished at the ballot box.

For example, India has implemented special systems of reservation since the founding of the modern country in 1948. 70 years later, it has still not been repealed. Therefore, affirmative action policies may stay in place much longer that the timespan of ‘righting past injustices’ would allow, even considering the vagueness and unquantifiability of such a concept.

This is relevant within the South African context and is an issue that the DA federal executive is aware of as it has stated that affirmative action needs to become less race-based over time “as the policies begin to do their work in redressing the legacy of apartheid.” However, as expected, the ANC accused the DA of not being committed to transformation of the South African economy and of trying to protect white privilege. As such, the first two empirical claims made by Thomas Sowell had been borne out. As of yet, affirmative action in South Africa has no definitive end-date, nor is there support for its repeal.

Another strong argument made by Sowell was that affirmative action merely benefitted those within the group privileged by it with the right political ties. In Malaysia this has been embodied by so-called ‘Ali Baba’ corporations. These are corporations that gain contracts from the state because they are run by majority-Malay (the beneficiaries of affirmative action policies) employers. These companies then sub-contract other companies owned by Chinese and sell the contract for a profit. As such, the cost of doing business increases since there is now a middle man, in the form of the Malay Ali Baba company, taking a share of the profits for doing no work. In South Africa this phenomenon is known as ‘fronting’ and has even been recognized by the ANC, the cheerleaders of BEE, to be a problem. They, alongside the DA, has recognized that BEE didn’t aid the people it was intended to aid. A survey done last year by the Institute of Race Relations found that only 14% of blacks have benefitted from BEE. Yet, the ANC refuses to even consider a proposal by the DA to revamp the affirmative action system In South Africa. This, along with the fact that affirmative action tends to benefit politically linked millionaires should raise some red flags regarding vested interests within the ANC.

In conclusion, South Africa seems to be stuck with a system of affirmative action that raises the cost of doing business, benefits only a minority of the people it is intended to benefit and seems to be in place indefinitely. Within this context, it would serve all of us to seriously consider whatever alternative to BEE the DA might be proposing. At the very minimum, the ANC should be forced to put a timeframe on BEE or be forced to lay down the criteria that needs to be met for the past injustices to be considered fixed. This would create a more accountable government since there would now be a metric to hold the ANC to in this regard.

Finally, it would mean that South Africa wouldn’t have to bear a system of privileges for a specific racial group any longer than is deemed necessary.

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