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South Africa’s Black Empowerment Has Failed In White-dominated Economy
South African News Updates

22 June 2009

South Africa should scrap its drive to give black people a slice of the white-dominated economy because it stifles growth and spurs corruption, the brother of the country's former president said on Friday.

Political commentator, entrepreneur, journalist and critic of the ruling African National Congress (ANC), Moeletsi Mbeki believes the affirmative action policies championed by his brother Thabo have entrenched the rich-poor divide in Africa's biggest economy and could lead to an explosion of violence.

"If you made me president of South Africa, the first thing I would do would be to scrap everything to do with black economic empowerment [BEE]," Mbeki told Reuters in an interview following the publication of his book on economic policy in Africa, Architects of Poverty.

"If we keep going with these policies, the question is what will collapse first, BEE or the economy, or the country?"

As part of a push to right the wrongs of apartheid and give blacks a stake of the economy, South Africa requires firms to meet quotas on black ownership, employment and procurement.

The government argues its policy offsets the racism of the past and stimulates the economy by creating a black middle class hungry for its own homes, cars and designer clothes.

But the cracks are beginning to show. Several black empowerment deals have collapsed as the global crisis has caused the value of shares used as collateral to fall, and critics argue the drive has enriched a small black elite while doing nothing to boost South Africa's economy.

Mbeki (63) goes further. He says the policy entrenches the country's shocking economic inequalities by creating a culture of cronyism and entitlement that discourages black entrepreneurship and education, keeping millions in poverty.

"BEE tells blacks -- 'you don't have to build your own business, you don't have to take risk, the whites will give you a job and shares in their company'," he said.

"I blame the ANC for buying into this story that instead of blacks working hard ... they should be given a free ride."

Corruption

Mbeki, who worked as a journalist and trade unionist before starting his own construction, media and agriculture firms, also argues that black empowerment has encouraged corruption, with lawmakers reportedly rigging tenders to benefit associates.

He says white "business oligarchs" are complicit because they use the policy to keep a few members of the black elite happy while still dominating the economy 15 years after the fall of apartheid.

South Africa's new president, Jacob Zuma, himself the target of a corruption case until it was dropped on a technicality just before the election that brought him to power in April, has vowed to tackle graft but has no plans to ditch empowerment.

Mbeki argues that unless South Africa axes the policy in favour of a broader skills development drive, South Africa's underclass, crammed into vast settlements of rickety shacks with no water or electricity, will balloon and eventually turn on the elite.

Rampant levels of crime and last year's attacks on foreigners in the townships are warning signs, he said.

Asked if he discussed black empowerment with Thabo before he was ousted as president by the ANC last year, Mbeki laughed: "No, he was the driver of these policies," he said. "My brother knows I have been opposing this for some time, but this is what he decided to do." -- Reuter

 

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