BEE+helps+white+capital+more+than+black+majority,+Nzimande,+S+Times

Sunday Times, Johannesburg, 21 January 2007
=BEE helps white capital more than black majority=




 * Blade Nzimande**

THE overwhelming majority of the workers and the poor generally share the South African Communist Party’s criticisms of the current model of Black Economic Empowerment (BEE).

Our detractors, drawn mainly from some of the biggest beneficiaries of this elitist model of BEE, have criticised our views as implying that we want the wealth of this country to remain in white hands. Ironically, the single biggest beneficiary from the current BEE model is not even our black capitalists, but the white capitalist class itself.

One example of how our wealth is still increasingly accumulated by whites is to be found in research done by Crotty and Bonorchis in 2005 on executive pay in South Africa. This research shows that the remuneration of the top 50 highly paid executives, with few blacks, was R782-million in 2005, while their gains on share options amounted to billions of rands. The chief executive of Edcon Group was in 2005 paid R10.3-million with share-option gains of more than R102-million!

The SACP, in line with the Freedom Charter vision that “the people shall share in the country’s wealth”, has supported BEE; but it must primarily benefit the overwhelming majority of our people. The single biggest challenge for our democracy, and the “contract” we have made with our people, is that of addressing poverty, joblessness, disease and restoration of the dignity of ordinary South Africans. The society we are building must be judged principally on these grounds.

But, what have our concrete experiences with the current model of BEE been? It has been benefiting narrow sections of the black population. The principal reason is that this model is premised on black share ownership in established white capitalist companies, thus favouring those who have access to government or corporate connections and finance.

Our model of BEE is almost an exact replica of the US model. The US BEE model is about incorporating a black minority into the economic institutions dominated by a white majority. South Africa is the opposite of the US reality, yet a white-owned company with about 30% black ownership is regarded as an empowered company — let alone the fact that even that 30% shareholding is through debt sourced from white-controlled banks!

This model therefore encourages all sorts of practices including fronting, co-option of a small elite and creating dependent black capitalists, accompanied by widening poverty for the majority.

This is why the current model of BEE is more akin to parasitic capitalism than genuine empowerment of the overwhelming majority of our people.

Parasitic capitalism by its very nature breeds corruption, driven by patronage and underpinned by an axis of collaboration between sections of a cadre located within the state, emergent sections of capital and established domestic and global capital.

In our work, the SACP is daily confronted by especially small and medium entrepreneurs who cannot gain access to government or big business because they do not have political connections, or are made to compete with “public officials-business people” who during the day decide on tenders but during the night submit business plans.

While we are certainly not arguing that our democracy has already been stolen by this parasitic axis, at the rate at which these practices are taking place, there is indeed a real danger that the power of money may eventually triumph over the needs of ordinary people, millions of whom struggled for freedom and democracy.

What is the alternative? The first task is to use our congresses this year to review BEE and our economic policies completely. For BEE to be truly broad-based it has to prioritise the empowerment of small businesses, co-operatives and other community initiatives. Its thrust must be to realise the vision of the Freedom Charter, including the mobilisation of resources targeted at working-class and poor communities. It has to be based on a new programme aimed at the development of a new growth path, oriented towards, and owned by, the overwhelming majority of the people. Anything short of this is a betrayal of the letter, spirit and vision of the Freedom Charter.

//Nzimande is general secretary of the South African Communist Party//


 * From: http://www.sundaytimes.co.za/PrintEdition/Insight/Article.aspx?id=363340**

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