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Economic conversations: Something must break

Opinion
I wish to introduce the readers to my weekly column under the banner of “Radical Economic Conversations,” for which I invite you to engage robustly, and to add to the discourse aimed at lifting the narrative and broadening the understanding, rationale, and objective for a more aggressive implementation of economic transformation programmes in our country.

The intent of the column is not to foster agreements with the views I espouse, but rather to create a platform for differing views to engage and exchange perspectives, with the expectation that in the longer term all of us, as patriots and South Africans, can see the process of reconciliation and transformation, not from black and white, but from patriots and citizens seeking a common goal towards lifting our country to occupy the highest pedestal of winning nations.

When as a country we reach a stage where radical socio-economic transformation is championed by white institutions and leaders alike, we would have crossed the Rubicon, in other words, from a South Africa first! But for now, it is seen as a black thing designed to take from whites!

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Xolani Qubeka. Photo by Simphiwe Mbokazi

Therefore, the desire is to raise the bar in terms of dialogue, confronting issues with undiminished truths and facts, and to bridge asymmetrical spaces in our knowledge of situations confronting us as a nation. The end goal is that all of us wish for a peaceful, harmonious and prosperous South Africa. The opposite is that we will find ourselves sliding down fast towards “Armageddon”, with racial rift tearing apart our social fibre, all for the wrong reasons. Perhaps we are oblivious of that fact that it is the gross inequalities between black and white that are at the core of our problems. How do we drastically reduce these inequalities in all prevailing forms within all facets of our lives?

For now, however, poverty and strife is synonymous to black people. Fact, the concentration of the bulk of South Africa’s wealth is in the hands of a very tiny majority, among which there is a proportion that doesn’t really care what happens to the rest of us, for as long as they and their ilk unabatedly amass billions upon billions from most of us as consumers, the rest can own Spaza shops - a recipe for a revolution!

For substantive change to happen, something must break!

Our narrative on radical economic and social transformation must be grounded on the realities of the current South African racial socio-economic development architecture as a historical perspective that must be corrected. The intended role and contribution of blacks in the broader economy under the National Party was enshrined in Verwoerd’s doctrine of Bantu Education, ensuring that blacks can become obedient cadres of administrators in a white economy.

Verwoerd’s major fear was the resurgence and the spreading of the ilk of Mandelas and Sobukwes as torch bearers for future African generations.

Languishing

At the time when Afrikaners were languishing at the bottom with 2 percent of the economy within the agrarian economy, the National Party had to make space for poor and bare-footed Afrikaners by reducing the capacity and competence of the African majority to administrative functionaries. In today’s language: “The National Party adopted a radical socio- economic transformation agenda for Afrikaners.”

We will be looking at the successes and examples of how successive apartheid governments deliberately used State power to empower Afrikaner businesses and enterprises, and what lessons today’s government could better emulate.

That latitude, space, scope and opportunity to restructure the prevalent apartheid economic architecture must be given to the current democratic government to drive to its fullest potential. Our enjoined futures, black and white, depend on it.

The notion of Black Economic Empowerment as core socio economic distributive government policy has constantly evolved with successes in certain instances, but somehow faltered along the way, because of varying factors. Whilst the BEE philosophy prevails, the narrative has been accentuated and further entrenched through the advent of creating black industrialists as a new philosophical precept, and embedded BEE into the industrial base of the broader economic development.

Read also: #Sona 'should drive economic transformation'

The radical economic transformation narrative should be seen within the context of creating black industrialists. This should therefore put to rest the disruptive narrative of apartheid apologists who, as a deliberate malicious intent, label radical economic transformation as “another programme aimed at benefiting a few connected people”, because it is not.

Its ultimate success, however, is not so much dependent on its perceived correctness by the majority of its intended beneficiaries, but more by its acceptance and appreciation by the majority of white people for truly and fully embracing it.

It is crucial that white people see economic transformation not as reverse discrimination, but more as a key lever to close the wealth gap between black and white citizens, and to broaden the economic cake through implementation of policies and initiatives to equitably distribute new opportunities that would enable South Africa to develop its true potential as a developing nation.

The national dividend from all these measures and interventions would be accelerated inclusive economic growth, increased and expanded middle class as well as a growing fiscus.

While of course its core focus should be on fair and equitable distribution of new opportunities, it is equally fundamental to also curtail monopolistic market dominant behaviour, and to break prevalent cartel collusive behaviour in all key sectors of the economy and allow for the entrance of new local and international players and to foster fair competition.

While I am not an advocate for empowerment through the purchase of shares in large corporations by black people who have to raise loans to attain that, that process nonetheless is adequately catered for through various economic transformation policy instruments which are not necessarily perfect.

Of course, we must applaud those black individuals and investors who took advantage of those prevailed opportunities and made money in the process. They are better placed to continue to diversify their investments through dividend flows from their early bird movers.

Those black investors who took a long-term view of investment decisions coupled with personal sacrifice, perseverance and staying power will attain sustained wealth creation and long-term prosperity. We want to see the emergence of hundreds of wealthy black families who would create new dynasties and home-grown brands that would diversify and Africanise our economy.

Read also: Davies wants empowerment clamp down

While that process must continue, however, our major focus must be in the creation of new entities and scaling-up of existing SMMEs through enterprise and supplier development measures, and through integrating these into the major value chains of large companies.

Varying views

A very close white friend and business partner is of the firm belief that “you cannot empower black people through loans”. In the next article I will be exploring his and many varying views on the subject, taking cognisance of past discriminatory practices. I will also explore how the many successful companies that benefited from the “empowerment of the volk”, and what lessons we can take tackling today’s inequalities, and racially skewed, over-concentration of economic power.

Lastly, the role of cartels and monopolies, untransformed sectors with control and dominance by a few strong, large companies, the recalcitrant behaviour of some of the captains of those industries that inhibit competition and entrance of new players, their stranglehold on major supplier value chains must be challenged.

The notion that black people are corrupt and incompetent, that government’s programmes on economic transformation breed corruption, must be challenged, and the narrative that when corrupt practices are perpetuated by the private sector it is couched as collusion and not corruption must be a subject of public scrutiny and debate. Corruption in general is a national scourge that must be challenged and eliminated in our midst.

Xolani Qubeka is the founder of the Small Business Development Institute and non-executive chairperson of Redisa, who writes in his personal capacity.

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