If we don’t question why we never got black economic empowerment from B-BBEE, we’ll never get economic reformation from whatever comes next.
As said previously, Ministerial adviser Professor Chris Malikane has been playing “bad cop” to Minister Malusi Gigaba’s “good cop” on “radical economic transformation”, with Yonelo Diko giving air-support.
Between them, they’ve tested a range of possible financial policies on the ANC’s electorate ahead of the June policy conference. Shall we nationalise or privatise? Take up arms, or word-wrestle in courts, universities and Parliament? Should we even wait until June, or should the ANC have voted with the EFF on land expropriation without compensation in February?
One of Richard Poplak’s articles has a paragraph every South African should know off by heart:
“‘Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency,” wrote Keynes in 1919. “By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.” This quote is often mangled, and attributed [to] Lenin as, “The way to crush the bourgeoisie is to grind them down between the millstones of taxation and inflation.”
It may be no accident that we’ve been credit-downgraded to junk status, or that we heard rumours of ANC NEC members celebrating that disaster.
In Poplak’s piece, Malikane describes “white monopoly capital” as an “impenetrable membrane in which the entire economy is contained” leaving “nowhere for the black working class to go but down” unless they associate with “a tender-capitalist class linked to government patronage”:
“An economy monopolised by racially exclusive capital leaves only patronage as an engine for economic mobility.”
When we discuss economic policy, “it not possible”, to use Malikane’s words, “to practice political ‘abstinence’”.
Realising the knife cut both ways, Malikane admitted that by speaking at a BLF event, he was opening himself to being implicated with “tender-based black capitalists” and the Guptas.
This destroys his façade as the Moses-figure liberating and leading the disenfranchised to the promised expropriated land of equity. Besides nationalisation and expropriation, there is no way for Malikane to arrive at the Promised Land because he and those he serves have already got there by abusing the BEE they’re hoping to smuggle out of public consciousness and memory, lest everyone figure how they did it.
“If Malikana were serious about demolishing inequality, he’d apply his formidable mind to the Broad-Based Black Economic Empowerment Act,” said transformation consultant from BEE Novation, Lee du Preez. “The other day I saw a tweet by Lianne Levenstein, CEO of EconoServ. ‘Everyone wouldn’t be talking about radical economic transformation if companies implemented -BBEE properly.
“Currently, BEE is wide-open to abuse because, for example, its number for the new entrant threshold — the net-worth at which a business-owner is considered ‘new’ to the economy — is completely unreflective of the South African context. It’s R50-million. For empowering a black person up until he exceeds that net worth, the current BEE code rewards businesses with a lot of points. This is like an emergency medical service at a disaster scene giving facials to patients with minor injuries while those who need life-saving intervention bleed to death.
“If we were serious about transformation, we’d drop the threshold to a lower figure, and give thought to not even rewarding ownership points for BEE to any black business owner exceeding the personal net-worth threshold. Why does someone worth R50-million need Black Economic Empowerment to help him survive unless he’s giving kickbacks to politicians?”
I asked Du Preez what he thinks about the possibility that those politically connected people — a list that could include Malikane and Gigaba — are deliberately driving the economy into a brick wall so they can benefit from the country’s destruction.
“That’s the crisis looming over our economy. Malikane is right when he says it’s not possible to practice political ‘abstinence’ – and that’s why more businesses should enter the fray the way those 81 CEOs did when they signed a pledge to back Pravin Gordhan last year.
“The ‘membrane’ Malikane complains about exists because of his friends’ possible abuse of BEE. Why doesn’t Malikane complain about that, since it’s the problem behind the problem? Is it that he’s protecting President Zuma’s patronage network? Malikane may have played a major role in forming and enforcing the very inequality he now complains of.”
“What the crowd [that Malikane addressed] got was exactly what they came for,” recalled Poplak:
“Praise for the possibilities of Venezuelan and Zimbabwean disengagement from the global capital matrix; praise for the Indian government’s ownership of the mining and banking sectors; calls for our own government to nationalise everything under the African sun.”
This is in line with Zuma seemingly lauding the economic record of Robert Mugabe at the World Economic Forum in Durban and at prior events. The Minister of Small Business, Lindiwe “Ginger” Zulu, has also made noises about land expropriation without compensation — skipping right past the Agri-BEE codes that the Department of Trade and Industry has provided. Why press “reset” on economic policy instead of strengthening and upholding existing measures?
Strengthen existing law, and you’ll highlight all the ways you and your friends have broken it — why we’ve missed broad-based black economic empowerment.
Repeal and replace the law, however, and no one will have to give those sins a second thought.
If we don’t question why we never got black economic empowerment from B-BBEE, we’ll never get economic reformation from whatever comes next. We’ll only get economic deformation. DM