[DEBATE] : "African Business" on whether economic apartheid can be beaten

[Sean Jacobs]

Can economic apartheid be beaten?
Tom Nevin. African Business. London: Mar 2006., Iss. 318;  pg. 19, 3 pgs

Twelve years after South Africa's democratic overthrowing of
apartheid, the country is facing growing criticism over the rise of
'economic apartheid' and the way it is leaving millions of South
Africans in the same, if not worse economic position than they endured
prior to 1994.

According to South African government statistics, the average black
household has become 15% poorer in the last 12 years while average
white households have seen their wealth grow by some 19%. The poorest
50% of South Africans have seen their income drop by up to 20%, and
black South Africans have lost nearly two million jobs over the same
period.

One reason, according to Trevor Ngwenya [spelling], chairman of South
Africa's Anti-Privatisation Forum, is that soon after coming to power,
the ANC government bought into the notion that the state should leave
the running of state-owned corporations to the private sector. In the
10 years after 1994, big business was controlled almost exclusively by
whites, and it was to these organisations that control of state
business assets was offered - such as telephony, electricity
generation supply and distribution, and rail and road transport.

As government-run entities they were inevitably inefficient, unwieldy
and overstaffed. Privatisation meant drastically reducing the number
of employees, most of them black.

Whether or not this view holds any water is moot - the government has
in the last 18 months done a complete U-turn on its privatisation
policy. The 'for sale' tags have been removed from such big
parastatals as Eskom, South African Airways, Transnet and others and
will instead be run as 'commercialised' corporations managed along
private sector business lines, but remain fully owned by the state.

Casualties at the top are invariably white management replaced with
black CEOs, MDs and board members - bringing charges by whites of
apartheid in reverse, political patronisation, nepotism and ethnic
favouritism.

There is another argument in reverse. Social commentators say that
during the apartheid era, whites were guaranteed managerial and top
level positions without regard to merit or qualification. These
appointments were made solely on the basis of colour leading to gross
inefficiencies in many departments. At least blacks, the argument
goes, only get appointed to top positions because either they have the
qualifications, the know-how or carry clout - an indispensable asset
for the welfare of any organisation. There have even been calls for
all whites, appointed before the end of the apartheid era, to be laid
off until they can prove that they can do the jobs they are drawing
large salaries from.

In the private sector big companies are obliged by law to have a black
economic empowerment quotient adding to the number of WMOFs (white,
male and over forty) on the unemployment line. Commercialisation of
state assets also brings out the axe and government corporations fight
running battles with labour unions each time the management tries to
trim the, predominantly black workforce.

Enormity of the problem

This state of affairs is a reflection of how government departments
have become progressively more black while the private sector reflects
a rainbow of employees, with whites representing the broadest band.
The upshot of what author Saul Somes calls "the ANCs neo-liberal
capitalist agenda" serves only to "exacerbate the problems of the poor
while co-opting individual black wannabes into the charmed circle of
the ruling elites", he maintains.

South African high court judge Dennis Davis notes that while, after
more than a decade of democracy, ANC economic policy has enabled some
black South Africans to profit immeasurably, "it has not shown any
prospect of changing the economic structure that disempowers the
majority of the population".

South Africans of all colours and political persuasion baulk at
applying the "A" word to such situations and even the term
"discrimination" is used with circumspection. There is a general
understanding of the enormity of the problem in bringing a neglected
35m black people into the economic mainstream in a short time. Yet,
impatience with the ponderous pace being applied by the government to
its many problems is manifest. More and more poor South Africans are
voicing their anger at the economic divide that separates them from a
decent life, pressing their noses against the window of a fabulously
wealthy South Africa out of their reach.

Thabo Mbeki and his new deputy, Phumzile Mlambo-Ngcuka, have declared
war on unemployment and the lingering colour polarity that keeps half
the population below the poverty line.

Mlambo-Ngcuka, architect of the Accelerated & Shared Growth Initiative
for South Africa (Asgisa) the country's new economic drive for growth,
has vast amounts of money at her disposal and vows that "this time the
government will make sure it all happens".

Asgisa is both a response to the nonperformance of previous economic
growth programmes and to the increasing clamour by victims of the
economic apartheid showing no sign of respite. Her reference to a
total government buy-in "this time" is hugely encouraging to the
poverty-stricken. With pressure from the top behind the initiative,
bringing about the ability to straddle all government departments and
obligatory monthly cabinet progress reports, Asgisa has a better
chance at success than previous attempts to drive economic reform and
gather in the "marginalised masses".

Lack of skills and higher education are issues that keep many South
Africans on the fringes of the economic flow, described in the Asgisa
manifesto as the single most important impediment to growth. A
short-term solution in the programme establishes the Joint Initiative
for Priority Skills Acquisition - a body made up of cabinet ministers,
business and labour representatives - dedicated to identifying
urgently needed skills and finding solutions.

The deputy president says "a modelling and growth accounting exercise
has been undertaken by a range of economists, supporting government's
contention that an average of 5% GDP growth, rising to 6% between 2010
and 2014 will halve unemployment" and bring South Africa's
economically deprived in from the cold.

The Congress of South African Trade Unions (Cosatu) continues to voice
its anger at the parlous state of the mass of South Africans and does
not mince its words over "this economic separation".

According to Tony Ehrenreich, Cosatu's Western Cape provincial
secretary, "the top 20%, at the moment, of South African society, has
increased their share of the national income and workers have
proportionately become poorer. The wealthy have been the key
beneficiaries of the first 10 years of democracy. The government needs
to be bolder in redistributing resources," he maintains. "If we don't
put money aside it's all just dreams."




--
>From Sean Jacobs
tintinyana at gmail.com

"Only intellectuals love poverty. Poor people love luxury" (from a
Brazilian samba)