[DEBATE] : The working class can kiss my arse...

[Russell Grinker]

Sunday Times, Business, Johannesburg, 04 March 2007



How SA kissed genuine redistribution goodbye



Moeletsi Mbeki: Another view

The article that appeared last Sunday in the Business Times on Cheryl
Carolus's Black Economic Empowerment group is an incorrect and superficial
presentation of the massive damage that BEE is doing to the economy and
politics of this country.

Invented by South Africa's white-controlled mega mining and finance
corporations in the early 1990s, BEE as it is now affectionately called, is
a magic wand that turns previously disadvantaged black politicians into
instant millionaires.

Whites in South Africa invented black economic empowerment, you ask? It may
sound unbelievable but it happened.

When Mandela came out of prison in February 1990, in the first public speech
that he made, he restated the ANC's political platform for which he had
spent 27 years behind bars. The ANC manifesto, called the Freedom Charter,
which was adopted in 1955, among other things advocates the nationalisation
of the mines, the banks and other commanding heights of the South African
economy.

Speaking on the steps of the Anglican Cathedral in Cape Town soon after his
release, Mandela said he and the ANC, stood by the nationalisation
objective.

This understandably struck fear in the hearts of South Africa's white
mining, banking and insurance oligarchy. Far from taking to their heels,
however, the oligarchs immediately got to work to find another formula that
could placate the angry ex-political prisoner and his fire-eating, radical
communist and trade union associates.

BEE was the counter-proposal that the oligarchs eventually put on the table.

BEE looks deceptively like a form of reparation. It appears as a way for
South Africa's rich whites, to atone for their sins of exploiting cheap
black labour to dig for the fabulous diamonds and gold for which South
Africa is famous.

The reality, however, is very different. BEE is a formula for co-opting -
and perhaps even corrupting - ANC leaders by enriching them as private
individuals.

The objective was to play on the leaders' weakness of many years of
deprivation in prisons and in exile by dangling in front of them
unimaginable riches that would be given to them by the oligarchs, free.

The first company to implement this magic formula was Sanlam, the
second-biggest insurance company in South Africa - which had been closely
associated with the apartheid regime.

Sanlam owned a subsidiary called Metropolitan Life, Metlife, most of whose
policyholders, in keeping with apartheid strictures of "separate but equal",
were black. Metlife had assets in the region of R2-billion - small change in
Sanlam's world, but unimaginable wealth in the eyes of erstwhile black
anti-apartheid political activists who had spent much of their lives in the
dungeons of the apartheid government.

To make this asset transfer look like a serious, arm's-length commercial
transaction, Sanlam assisted its black partners - made up of Mandela's
family doctor, the secretary-general of the ANC, the vice-president of the
Pan Africanist Congress, and the leader of a black business chamber, among
others - to obtain a loan from an apartheid state bank called the Industrial
Development Corporation.

Through further financial wizardry, Metlife's shares were split into
high-voting and low-voting shares so that the black shareholders, by owning
a tiny portion of shares, could control the company.

Needless to say, once they controlled the company, the black shareholders
paid themselves large sums in directors' fees. Several of them built
themselves palaces a few kilometers outside of Johannesburg that make Kubla
Khan's stately home in Xanadu look like a bungalow.

As they say in the movies, the rest is history. The ANC has long forgotten
about nationalising the commanding heights of the economy. And you will be
hard pressed to find an ANC minister or senior civil servant or former ANC
minister or former senior civil servant who is not in, or working on, a BEE
deal. Seventeen years after Mandela made his nationalisation speech on his
release from prison, South Africa remains an oligarch's paradise, which it
has been since the British defeated the Boers in 1902.

But what about the black masses? Well, the English have a famous song (sung
to the tune of the Red flag) which goes: The working class can kiss my arse;
I've got the foreman's job at last.

Mbeki is deputy chairman of the South African Institute of International
Affairs, an independent think tank based at the University of the
Witwatersrand in Johannesburg

From:
http://www.sundaytimes.co.za/PrintEdition/BusinessTimes/Article.aspx?id=4017
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