Globalist: Fitfully, South Africa pursues equality goals

Globalist: Fitfully, South Africa pursues equality goals

Posted in Africa | 15-Mar-06 | Author: Roger Cohen| Source: International Herald Tribune

JOHANNESBURG

A dozen years after the end of apartheid, South Africa is in the midst of the largest affirmative action program in the world, an attempt to turn a white-dominated economy into one where the country's more than 35 million blacks have a big stake in owning and running things.

A lot of people are unhappy with the Black Economic Empowerment program, or BEE, whose goals, set out in 2001, include transferring large amounts of stock and land to blacks by 2011. A parallel initiative, under the Employment Equity Act of 1998, aims, among other things, to end white domination of upper corporate management.

Laudable goals, most people agree, after the ravages of a white supremacist system. But there convergence ends. As the United States has found with its own affirmative action programs, progress tends to be fitful and disagreement rife when societies try to shift economic power to correct past racial injustices.

The disgruntled here include the huge Congress of South African Trade Unions, whose 1.8 million members believe President Thabo Mbeki's once- Marxist African National Congress, or ANC, has sold out to big business. "The same names appear in every black empowerment deal getting richer and richer," said Patrick Craven, a union spokesman.

There is no question that a few black businessmen and women have become immensely wealthy by positioning themselves to acquire the stakes that white-run companies in mining and other sectors have been obliged to sell to satisfy BEE goals. Black empowerment has produced billionaires faster than it has reduced poverty.

They include Cyril Ramaphosa, James Motlatsi, Tokyo Sexwale, Patrice Motsepe, Fred Phaswana and Irene Charnley. Many of these are former labor union leaders who have proved adept at parlaying their influence into riches. Nobody ever said capitalism was pretty.

Another dyspeptic group is made up of middle-class whites who feel it's now taboo to talk of their own difficulties and believe they may have no long-term future.

Dick Hermann, the deputy general secretary of Solidarity, a smaller, predominantly Afrikaans union, said: "We experience being second-class citizens now. I'm an Afrikaaner, I don't even know where my ancestors came from, and I belong in Africa. But is Africa prepared to accept a white tribe?"

He continued: "It's a discredited tribe, I know, because of apartheid, but that should not disqualify me from being in South Africa. And I wonder if affirmative action is not really punitive action designed to drive me out."

For now, whites are leaving, but not en masse, because the ANC has proved pragmatic. It knows global capital markets are ruthless in their punishment of countries that try socialism- in-one-country or trash the rule of law.

Still, getting to a racially representative workplace is a core ANC aim, and that means a business world where 80 percent of upper management is black. That's going to be a painful process. At least 65 percent of senior management is still white. Over time, many of those whites will have to cede their places, a process Hermann believes will generate chaos without satisfying the black masses.

He has a point. But then this process is necessarily cumbersome. Combining a market economy, with its imperatives of efficiency, and a redistributive economy, with its imperatives of justice for past white crimes against blacks, is not easy. There are plenty of reasons for everyone to be dissatisfied.

Yet the country lurches forward, growing at 4 to 5 percent a year, and with a political stability rare in Africa.

The aim, by 2011, is to achieve black equity participation of 25 percent in each sector of the economy; ownership by blacks of 25 percent of the shares listed on the Johannesburg stock exchange; the transfer of 30 percent of productive land to blacks; the awarding of 50 percent of government- and state-owned companies' procurement contracts to black-owned companies; and a 40 percent presence of black executive and nonexecutive directors in public companies.

Vuyo Jack, a black entrepreneur who is the chief executive of Empowerdex, a company that rates the degree to which corporations are conforming with BEE goals, said that progress was "wobbly," but that white businessmen were gradually coming to the realization that expanding the black market was in their interests.

"Whites are not doing enough," he said. "But there is a dawning awareness that if they do nothing, and there is no economic transformation over the next 10 years, then we will have no stability. The huge wealth gaps here must be eased."

With unemployment - mainly black - hovering around 40 percent, inequality growing among blacks, millions of blacks living in shanties, and access to education still fitful for many, there is no question that BEE has a long way to go even as the rampant consumption of a growing black middle class drives the economy.

The process could still turn violent or stall; this kind of social engineering is explosive, especially set against the backdrop of 46 years of apartheid. But South Africa needs to stay the course.

In the United States over the past half-century, the size of the black middle class has quadrupled and black poverty has shrunk by half. Still, the picture is by no means all rosy, despite decades of affirmative action since the civil rights movement.

About 8 percent of American whites are poor, compared to about 25 percent of African-Americans. Public schools are often segregated, no longer by law but by the choices whites and blacks make about where they live. On average, black men earn close to $17,000 less a year than whites. Their life expectancy is six years lower. Black men make up 6 percent of the U.S. population but 44 percent of its prison population.

The road back from racial persecution - slavery or apartheid - is a long one. It will meet resistance because nobody ever likes to think they are guilty. But I see no alternative to the payment of this historical debt, and no better hope in Africa for a successful outcome than in the land of Nelson Mandela.

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