The global crisis has brought home the sad reality of how artificial black economic empowerment (BEE) wealth creation sponsored by white capital is. As we go into the 15th year of democracy, BEE serves as a symbol of shame. It is indicative of the ruling party's failure to not only manage but make radical decisions emanating from the economic compromises SA made at the negotiating table.
BEE specialises in pretension because it takes away the economic sovereignty of Africans. It pretends to give them a piece of the economic pie while in reality the cake disappears before they can taste it. BEE has not been able to bridge inequality in SA, nor has it contributed to increasing the assets of African people. It has been likened to a pyramid scheme where those at the top net enormous profits, but those at the bottom get nothing.
Policymakers have squandered key political and economic moments during the budget surplus years which could have built momentum for wealth-creation strategies and closed the widening wealth and income gap between the richest and poorest members of our society. Different financing models could have been created to empower Africans to take greater ownership of the economy.
As a result, no attempt has been made to transform economic power relations from the apartheid era. BEE rests on a fragile foundation of financial policies that continue the apartheid government's financial liberalisation policies and mimic US methods of deregulating financial markets.
If Africans are not able to participate effectively in the economy, the proponents of deregulated markets deem this as unavoidable and trivialise the increasing disparities between rich and poor, dismissing these as "collateral damage of rapid economic growth".
The catastrophic losses of many BEE deals subjected to the vagaries of the market are considered incidental by those who profit from such losses. I am certain that African grannies who stood in long queues at post offices while buying Sasol and Barloworld BEE shares, which have since lost their value, must be wondering why the banks that funded these schemes seem to be the only ones getting rich.
All these years, BEE loyalists have been asking how they can broaden BEE, how much money is needed to pour down the throats of the African majority to satiate their hunger and raise their standard of living above the poverty line. Because of fear, the ruling party has glued the fortunes of Africans to a BEE construct that does not challenge power relations and does not shift white capital out of its comfort zone.
For that reason, poverty and illiteracy are profitable for those who must dispense BEE favours of only 25% of their companies because they essentially have nothing to lose. The risk of these deals always pertains to the beneficiary, not the magnanimous benefactor.
The larger the pool of African poor, the bigger the profit the owners of capital will make by stealing the money meant to empower black people.
If BEE continues to be implemented without challenging and interrogating the construction of power relations and remains married to antiquated apartheid economic structures, the notion of wealth creation for the majority of Africans in SA will remain a distant, unachievable dream.
To create is to make something new or better. My contention is that SA, by embarking on a journey of wealth creation, presupposes that new, African-owned companies will emerge; new, liberating economic leaders will innovate and create industries that release the potential of African people to produce products that will capture the imagination of the world.
If the ANC alliance's rhetoric is honest, the next five years of a potentially incumbent Left-leaning government should offer space to start chipping away at the hierarchic capitalist structures SA has been confounded by for so long. It's exasperating and time to consider possibilities for less hierarchic, self-determined economic options that rid us of the scar of BEE on wealth creation, bringing power back into empowerment.
I believe SA has what it takes to be a superpower, but it will take a great deal of political will and leadership to push the country away from BEE and towards genuine wealth creation that benefits the African majority.
- Pheko is a political and economic consultant and columnist
