How+SA+kissed+redistribution+goodbye,+Moeletsi+Mbeki,+S+Times

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=401799**

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