10 March 2006
	IN MY OPINION An ECONOMIC miracle EMERGING SA is demonstrating a system where growth can be managed to provide improvements in trans-forming socioeconomic structures

In The Coming Anarchy, Robert D Kaplan says: "Countries should hold off democracy until free markets produce enough economic and social development to make democracy sustainable." Using Singapore as an example of a prosperous authoritarian state that contrasts strongly with the failing economies of many young democracies, some thinkers maintain that enormous ethnic and racial imbalances in human and financial capital cause the destabilisation and eventual demise of many democracies. Against the backdrop of this historical trend, the achievement of our political miracle in 1994 - when the black majority owned and controlled less than 5% of our private economy - presented risks and challenges to government and corporate SA. However, contrary to the recorded international experience, SA's progress in terms of broad-based transformation over the past four years, as evidenced by the transformation on the JSE, provides a clear indication that SA's road ahead may be very different. As South Africans, we may be able to replicate our political miracle while improving our market-generated growth and transforming racial imbalances. From our analysis for Top Empowerment Companies over the past three years, the following evidence provides us with a clear indication that SA is embarking on the right path: Measuring and comparing JSE-listed companies using the broad-based black economic empowerment (BEE) scorecard on an annual basis, we have found consistent improvement in the average contribution made by the JSE-listed companies towards the seven broad-based BEE factors - black ownership, management representation, employment equity, skills development, preferential procurement, enterprise development and corporate social investment. The average broad-based score achieved by the top 50 BEE-ranked companies has improved from 35% in the 2004 survey (based on 2003 figures) to almost 60% this year. From a handful of companies that were black-owned or black-empowered in 2003, the JSE now boasts more than 30 black-owned and black-empowered companies. An increase in the number of JSE-listed companies that have black shareholders or that are in talks with potential black shareholders. The level of BEE-related disclosure provided by JSE-listed companies has improved significantly. The increase in the numbers of the black middle class (421 000) over the past 12 months. Contrary to historical experience, SA is demonstrating a system where positive economic growth can be managed to provide significant improvements in transforming its socioeconomic structures. This should, in time, generate further economic growth. Chia-Chao Wu is the executive director of Empowerdex