the Black Management Forum Annual Achievement Awards
12 October 2007
Ladies and Gentlemen
The Oxford Dictionary defines Empower as to authorise, license, give power
to, make able. It defines Confidence as a sense of self-reliance boldness.
The formal meanings of empower and confidence is worth exploring in relation
to economic transformation in South Africa. It leads us to ask the profound
question of whether empowerment without confidence, without self-reliance is
sustainable transformation.
So when I was asked to speak on the "progress, or lack thereof, on Economic
Transformation with specific reference to corporate South Africa compliance
with the broad based Codes of Good Practice" I decided I'm going to be a bad
student and not directly focus on the question. Not because it is not
important, but I am concerned that the current discourse on broad based black
economic empowerment, is muddled. So, certainly we have made substantial
progress and I will quote some relevant examples later, but I do think it is
very important that we reflect more deeply- beyond tick box exercises- on this
issue of economic transformation in South Africa.
In an essay entitled the Economic Growth and Prospects of South Africa, a Mr
L.H. Samuels warns that the "real threat to the economic future of the Union is
our failure to recognise the extent to which existing standards are dependant
on the emergence of a labour force with the requisite education and training,
appropriate incentives and opportunities for economic advancement" Now I quote
this because it was written in 1960. This type of thinking, as logical as it
sounds, was ignored and the fact is that in 1994, the democratic government
inherited an economy in deep structural crisis, trapped in a low-growth
equilibrium, economic exclusion and underdevelopment. It came to this as South
Africa had deprived itself of the necessary skills and capabilities by choosing
only from a narrow section of the population. In essence, South Africa has been
in this shortage of skills situation for a long time and this partially
explains certain functions of the economy and the distorting effect on how
people were paid and the need to import skills.
A significant feature of this structural crisis was therefore precisely the
systematic exclusion of the majority of the population. For those who need
reminding, let us remind ourselves again that the structured exclusion of black
people from economic power began in the late 1800s with the first dispossession
of land and continued throughout the 20th century with the first Mines and
Works Act, 1911, the Land Act of 1913, and the raft of Apartheid laws enacted
after 1948. The impact of this systematic disempowerment not only resulted in a
landless black majority with restricted access to skills development, but also
deliberately prohibited black people from generating self-employment and
entrepreneurship. South Africans were systematically deprived of viable
business opportunities. Now, Frantz Fanon, the anti-colonialist writer, once
said that "in the world through which I travel, I am endlessly creating
myself". We have to ask ourselves, as black people as we travelled through this
world of systematic disempowerment, what impact did this have on our world
view; on our confidence, our sense of self-reliance and indeed we should ask
what world did we create for ourselves? And finally, we should ask, as black
managers, how does this inform how we behave now?
Ladies and gentlemen, no amount of revision of our history can eradicate the
reality of systematic and institutionlised disempowerment of communities and
individuals, as the defining feature of Apartheid was the use of race to
restrict and severely control access to the economy by black persons. The
accumulation process was one of restricted wealth creation and imposed
underdevelopment on black communities to ensure that they were, in the main,
suppliers of cheap labour. The underdevelopment of black South Africans took
the form of progressive destruction of productive assets; deliberate denial of
access to skills and jobs; and; the undermining of selfâemployment and
entrepreneurship. In combination these policies restricted and suppressed the
wealth and skills endowments in black communities, thereby structurally
inhibiting their participation in a legislatively race-based economy.
The fact that black communities had little access to technical and scientific
teaching and learning further exacerbated the obstacles in our rapidly
developing industrial process.
Our challenge as a democracy was therefore to find ways of correcting this
appalling distortion in our society and in our economy. This, you will
recognise as leaders and managers, cannot be achieved without a vision. If we
agree with the assertion of Andrew Campbell of the Ashridge Strategic
Management Centre that a "vision articulates a view of a realistic, credible,
attractive future, a condition that is better in some important ways than what
now exists" - Our challenge was to plan and implement a realistic, credible and
attractive future. So let me repeat, government's strategy for Broad-based
Black Economic Empowerment is that it is a necessary intervention to address
the systematic exclusion of the majority of South Africans from the full
participation of the economy. But it is part of a broader vision, a vision that
seeks to liberate us comprehensively from the chains that bound our economic
participation and because of the effect on our confidence - our minds.
However, ladies and gentlemen, we can never predict with absolute accuracy
the implementation of a vision. And currently we have, I think, reached a
crossroad in the discourse on the implementation of economic empowerment and
transformation. It has come to mean different things to different people and we
run the danger of losing sight of the vision.
For instance, I think it is a matter of concern that the dominant discourse
on economic transformation reduces profound structural change in our economy to
anecdotes of individual behaviour. Here's a quote, which I think is
representative of the view that is often printed in our financial magazines:
Writing in NewsWeek, Tom Masland says; "they are the black princes and
princesses of the new South Africa. They wear Armani to the office, drive
late-model Mercedes or BMW sedans and buy vacation villas in Tuscany." Then, in
the Business Day this past Wednesday, the following is written: "The emergence
of the Black Middle Class has important social and political consequences that
have not been properly assessed. Such an assessment reveals that the employment
equity and black economic empowerment policies that are credited with its
emergence may harbour unintended consequences. One such example is that,
through EE/BEE, the success of some individuals is closely tied to government
policy. Such policy cannot distinguish between merit and patronage." So, there
you have it, an example of the dominant discourse - that in essence, black
empowerment is the empowerment of the undeserving few and its outcome is
conspicuous consumption.
Less cynically, Franklin Sonn asks "Isn't it true that as we succeed in
becoming wealthy we often grow more distant from our people and their needs? Is
it not also true that we are far too often found to be negotiating our black
economic empowerment business transactions on the basis of promoting the
aspirations of the rural poor, but once the transactions are concluded, we
sometimes gravitate into the sphere of the wealthy"?
Christine Qunta, in a different vein says: "A more informed debate on BEE
would ask the question: who have been the real beneficiaries of BEE? Of the
R130bn that has been spent on BEE over the past four years, we should ask how
much of this money went into the pockets of black shareholders and how much
went into the coffers of the company and the advisors involved in these
transactions? Anecdotal evidence suggests that when one combines the purchase
price for the shares flowing into companies and the fees for the merchant
bankers, the lawyers and the chartered accountants, who are inevitably white;
it is likely that the major beneficiaries would turn out to be white."
Now, we are entitled to ask, how is it that a necessary policy intervention,
without which our economy will never achieve its full potential, means so many
different things to different commentators?
Perhaps part of the answer lies in whether all of us are forgetting that
surely, black economic empowerment cannot in itself be the only aspect of
economic liberation for black people. Are we not running into a very serious
danger, if we narrow and in some cases, trivialize the debate by
over-emphasizing instances of conspicuous consumption and the pace of change
and under-emphasising the overall vision? Certainly, I do not think that Mr
Sonn or Ms Qunta are trivializing the debate, and I believe they are as
concerned as I am that whilst it is absolutely correct to speak out against the
ill-informed dominant discourse, we must avoid the danger of falling into the
trap of reducing the aspirations of the masses of our people for a better life,
to a debate on the minutia of the implementation of broad-based black economic
empowerment. I believe we will be doing ourselves and the current process of
economic evolution in South Africa, a great disservice if we do, because the
strategy of broad-based black economic empowerment, is not itself a final
solution. It is something to nudge a recalcitrant South Africa and it is
something that must give South Africans sufficient confidence to break certain
patterns and to break from all the negative dimensions of our past.
So, in this intense task we all know that we have made enormous economic
advances in South Africa since the dawn of democracy. We must also know that it
would not have been possible to achieve what we have achieved without the
substantive involvement of black people. We also know that we have not done
enough, yet.
But let me digress for a moment and say, ladies and gentlemen, that keeping
the bigger picture in mind, broad based black economic empowerment has become a
feature of our society and is not going to go away.
Since the release of the codes, earlier this year, we have seen real
progress in private sector activity. For instance during the past few months
construction company Aveng, the shipping company Grindrod, retailer Woolworths
and leading domestic tile retailer Italtile all unveiled significant
broad-based black economic empowerment transactions. In financial services,
Santam and Allan Grey announced innovative transactions. So what we see is that
across the economic sectors black people are becoming owners. Just yesterday
automotive leather multinational Mario Levi announced that they have
established a joint venture with black economic empowerment (BEE) automotive
component supplier Allied Trim Components which will be the first black owned
interior trim component supplier to original equipment manufacturers.
So, the process of empowerment is on the move and gaining momentum as never
before. This empowerment is also taking place not simply in the boardrooms of
the corporate world. There are indeed signs of visible change throughout our
country. And to those who believe that black economic empowerment means Armani
suits for the few, consider this example: Approximately 6 years ago, the area
of Sunnyside in Pretoria, was used as an example by critics of the democratic
government as an example of the decline of the economy. They said what was once
an economically vibrant area would soon become a slum, deserted by the private
sector. They saw this as the microcosm of a future South Africa. Well, a few
weeks ago, the Sunnyside Business Forum announced that the Pretoria shopping
centre Sunnypark - in Sunnyside - is to undergo a revamp to the tune of R300
million.
The report went on further to say that the centre is situated within an
expanding middle class market with shopper support during the week on a steady
increase and a growing demand for key retail brands and facilities in the form
of fashion, entertainment and banking facilities.
The main employers in the area include the Department of Trade and Industry
campus and the newly opened headquarters of the Public Protection Service which
will generate further employment and footfall to the area. Neighbouring Arcadia
represents approximately a further 10 000 employees. The report stated further
that according to a market survey conducted in early August 2007, the average
household income in 2007 for the primary trade area is R8 200 per month, with
the LSM 5-8 proportion of the relevant market increasing from 65% in 2005 to
81% in 2007. The LSM 9 and 10 proportion has increased from 13% to 15% over the
same period of time.
I quoted this in detail because this evidence gives the lie to those who
continue to predict doom and gloom. I quoted the detail because actually this
area undergoing rejuvenation, this area that is growing and this area in which
the economy has been turned around, is occupied, staffed and managed by a
population that is virtually 100% black. There are a number of other such
examples throughout the country.
One of the reasons for this turnaround is that government took a very
conscious decision to invest in these areas and this investment has paid off.
Government will continue to intervene in this way, in all areas of our
competence. In setting appropriate regulation, in developing infrastructure, in
stimulating competition, in deepening industrialisation and so on.
Indeed, in all the work related to the broad based black economic
empowerment strategy and the other areas of intervention the strategy is
"making able" as defined by the Oxford dictionary. But we must pause and ask
ourselves, in as much as government can succeed at doing these things, who is
responsible for fostering a culture of "self-reliance" and "boldness" - the
prerequisites of confidence?
I think here it is useful to refer back to Fanon when he said, "In the world
through which I travel, I am endlessly creating myself". Ladies and gentlemen,
how we create ourselves is determined by us. No amount of transactions will by
itself bring about self-reliance and boldness. The boldness and self-reliance I
am talking about is the boldness and self-reliance of the founder of Tata
Enterprises, Jamsetjie Tata, who in the early 1900's upon arriving by
invitation at the best hotel in India was turned away at the door, because he
was Indian. His response? To build the Taj Mahal Hotel, a bigger and better
hotel than anywhere in India and one from which no-one could turn him away. The
boldness and self-reliance I am talking about is that of the late Bra ABC
Motsepe, who in the darkest days of apartheid, established his own private
school and made an effort to employ the best possible teachers, all with his
own resources.
Let us learn from this, especially those of us who have had the opportunity
to accumulate wealth. Let us ask ourselves, are we a living embodiment of
empowerment and transformation ourselves? Having come through our history
bruised and scarred, but wiser, what are we going to do to provide
opportunities and support to others?
So in conclusion, in endlessly creating ourselves, we must know that there
can be no greater inspiration to our young but to see people like themselves
who are self-reliant and bold. In endlessly creating ourselves let us take
seriously the fact that if people still bear the scars of the past, training
must not be something they must be deprived of. So we must use every chance,
every glimmer of opportunity, every avenue opened by law to embed a culture of
training, everywhere we find ourselves and not only in specialist
institutions.
In endlessly creating ourselves, remember too, the 1 million informal
entrepreneurs in this country and their potential for expansion. So, support
enterprise development, motivate your companies to do so and motivate the
person selling goods on the street corner, identify and strategise with her the
next step in the expansion of her business.
In endlessly creating ourselves, let us not limit our aspirations and our
vision to whether the next tick-box of some compliance criteria or the other
has been filled.
I want to end off by beginning with a quote from another South African
commentator writing in 1960: he says; certain people "tend to overlook the fact
that in Europe, America and elsewhere it has taken Centuries for the white man
to gain his present mastery over scientific facts and to fit him by experience,
acumen and background to govern industrial societies under twentieth century
conditions.
Africans, prodded both by well-meaning and self-seeking peoples seek to run
before they can walk or even crawl. All too frequently their feelings, which in
many instances are still primitive instincts, become inflamed by an unbalanced
picture of colonialism".
My fellow Africans, in endlessly creating ourselves, we do indeed learn not
to be trapped by the racism of others, we do learn that we do not want from
others what we can gain ourselves and we know that we have, we can and we shall
run.
I thank you.
Issued by: Department of Trade and Industry
12 October 2007
Source: Department of Trade and Industry (http://www.thedti.gov.za)
