Is it really so difficult to BEE good?

By Lauren Hermanus (17 Aug 2010)

It is easy to dismiss Black Economic Empowerment (BEE) as a vital component of socio-political transformation, given the lack of trickling down from the top, and persisting stench of cronyism and corruption in the upper echelons of the South African economic pyramid.  Yesterday’s Cape Times reported two BEE related scandals. The first voiced questions directed at the legitimacy of Arecelor Mittal’s BEE deal that secured its new mining rights. The second is the allegation of fraudulent BEE scorecards in Massmart’s supply chain. The Business Day reported, again, on the banks’ protracted ‘victory’ limiting black equity targets to 10%. And, Mamphela Ramphele, black business woman, suitably empowered, publically denounced BEE last week. Not the first and probably not the last BEE controversies to be confronted.

This is not another blog bemoaning BEE and affirmative action. I have had experience of not being black enough to be given opportunities; and not being white enough to not have my race used to undermine by ability when offered opportunities based on ability, qualifications and my contribution to equity considerations. BEE will only be redundant when there are no longer structural barriers to self-empowerment that specifically affect black South Africans.

The systemic need to address these barriers does not negate the need for general social empowerment, broad-based development, or racial integration and it is bigger than flippant political posturing and my hurt feelings.

Inequality is a feature of all capitalist societies, but South Africa’s racially structured inequality is the worst in the world. (Incidentally, this blog is also not a communist rant, though a healthy dose of red – and green – interrogation of our present system would not go entirely amiss). We are faced with three very real challenges:

1. The economic gap between the top and the bottom needs to be reduced;

2. In a country with a large black majority and racist history, the distribution of wealth at the top of the pyramid must reflect the demographics of the base;

3. This must be achieved without exacerbating racial cleavages in SA.

If these challenges seem to you to be irreducibly opposed, then you have realised the complexity of the task at hand.

Socio-economic inequality erodes social capital. It has been correlated with lack of trust among citizens and violent crime. The black – and here I include all non-white South Africans with an expedience I loathe to enforce – middle class grows, but poverty remains a profoundly entrenched reality for this, our country’s majority.

Working towards equality is vitally important, not only because it can and must be ethically motivated. Its importance is strategic. Equality, both real equality and symbolic gestures thereof, is good for political stability, which means that it is good for business and good for communities. Social capital is a public good from which all South Africans benefit.

The government is responsible for creating a more equal society. Holding businesses accountable to legislated standards on equal racial (and other) representation and ownership arguably makes businesses responsible for the delivery of a public good. This is one way of thinking about it.

There is another way: BEE enables businesses to internalise and address a socio-economic problem to which they contribute, in a way that adds to social capital and ultimately makes good business sense.

There are real challenges to the implementation of BEE:

  • Balancing the opposed short-term interests of shareholders and community stakeholders.
  • Effectively communicating the long-term interest in building social capital shared by all parties.
  • Ensuring the effective and transparent communication of BEE projects.
  • Balancing large symbolic deals with grassroots level social enterprise developments.
  • Implementing systems – preferably countrywide – to monitor and report on the effectiveness of real and shared Black Economic Empowerment.
  • BEE must be implemented with care not to stigmatise black South Africans or marginalise white South Africans.

BEE is about ensuring the sustainability of our political and socio-economic gains in South Africa post but not past apartheid. Is business rising to the challenge? Will business rise to the challenge? Inequality will not disappear if we bury our heads. We have to criticise specific BEE failures without undermining the urgent underlying problem. It is time to restart the BEE debate, within the framework of this open-ended list and the context of the deeply interrelated economic, social, environmental, and political sustainability of our system.


Is it really so difficult to BEE good? — 7 Comments

  1. Very insightful – thank-you. The 6 challenges you close with seem critical. I’m not well-informed on BEE, but I am wondering whether the original BEE initiative has developed over-time and been sufficiently flexible to adapt as the outcomes of implementation reveal themselves? Feels like “BEE version 2.1” is essential to ensure the movement that is required!

  2. The missing element is humanity. Empowerment is not a “thing” to be done, but a state of mind. This truth is emerging in countless books: Antjie Krog’s “Begging to be black”; a collection of essays titled “In the balance.” All these things make one point: transformation (empowerment) and reconciliation as two sides of the same coin. If we are not prepared to walk in the shoes of others, we cannot hope to make empowerment a reality for others. Only by seeing life through their eyes, by understanding their perspectives, by understanding their memories and history, and from these their expectations and aspirations, can we make decisions that are relevent to their empowerment. If we don’t do this, we will be doing empowerment to them, and people don’t want that; they want to be part of what is being planned.

  3. Thanks for your comments.

    @Toni: absolutely, BEE and any development measure needs to be dynamic and adapt to the changing needs of the system. What is needed is BEE 2.1, 3.1 etc. If BEE is not able to change then it must be replaced.

    @Mark: All true. There is a long history of doing to development to people, speaking at them, teaching them to be good subjects. Compassion, empathy, allowing the other to articulate his/her difference – these are all necessary if we are to move towards a more ethical way of being in the world.
    What I would caution against is the conflation of reconciliation and empowerment in the political sphere. There is no linear causation between these distinct concepts, though I would concede that they are inextricably linked. Forgiveness has its own ethico-political aporia. For transformation to take place, there must be pragmatic and concrete, and sometimes legislated change out there in world. Changes in our actions can bring about changes in our minds. It does not always flow in the opposite direction. Simone De Beauvoir articulates this idea with style in the context of sexism/racism:

    “Think for a minute. You know a racist Southerner. You know he’s racist because you’ve known him all his life. But now he never says “nigger.” He listens to all black men’s complaints and tries to do his best to deal with them. He goes out of his way to put down other racists. He insists that black children be given a better-than-average education to offset the years of no education. He gives references for black men’s loan applications. He backs the black candidates in his district both with money and his vote. Do you think the blacks give a damn that he’s just as much a racist now as before “in his soul”? A lot of the objective exploitation is habit. If you can check your habits, make it so that it’s “natural” to have counterhabits, that’s a big step… A couple of generations feeling that they have to appear non-racist at all times, and the third generation will grow up non-racist in fact.”

  4. Not sure I agree that there is no causal link nor that forgiveness has its own ethico-political aporia. Charles Villa-Vicenzio makes the link in his “Political Reconciliation in Africa, quoting a number of African case studies post-colonisation, that no reconciliation is possible without adequate socio-economic development: without the latter, the former is threatened, without the former the latter is unlikely to happen. Out of a recognised, and I stress that word, need to form a new society, which is in many respects a political decision, there can be no concrete decisions taken. In our instance, that recognised need does not exist. The need exists, its recognition does not. If there is no recognition of the need we face, how do actions follow? In other words, to reconcile and to transform and both political and economic realities. What separates our need, as distinct from other purely race-based inequalities, is the conflation of three separate transformations, political, economic and social. The first two are underway, the third not. So I would caution against “boxing” development into generalisations and urge that a South African model, yet to be found, is followed.

  5. @ Toni: I wonder what in your view BEE 2.1 would look like? It’s an interesting concept. And what would we replace BEE with, if it doesn’t work, given that the ultimate target of B-BBEE are the poor and the marginalised? It’s a question I have often asked myself, and never arrived at any conclusion. Be interested to hear yours, particularly since, as poor old Barack is discovering, there is no appetite for anything that looks or smells of government intervention or socialism. Trickle-down? Can’t find evidence that it ever worked anywhere, at least not to the extent that we could seriously help 50% of our compatriots who are in distress.

  6. @Mark: First, I do not disagree with you. I think there is causation between reconciliation and economic development. But I believe these links (in the plural) are complex, the causation is nonlinear and caught in a network of feedback loops and dynamic interactions, constantly differing and deferred in this process.

    I also agree that, despite deep connections between the social, the political and the economic, that we must, for the sake of clarity try to separate these issues out, provisionally, subject to change and correction, so that, as you say, the third area of transformation is not forgotten.

    You never know what will bring about forgiveness/reconciliation. You cannot calculate it. In the process of behaving differently, of acting non-racist, of embracing others in their difference in our concrete actions, there is the potential for a shift in attitude. We do not have to know with certainty where we are going to go. What do we know with certainty? Or even more – for a shift in ways of being. One’s understanding of forgiveness is key in where you position this process in relation to other developmental processes.

    This country cries out for political and philosophical re-imagination of our familiar issues and demons. The issue of ‘boxing’ is a difficult one. Ultimately, I think it rests on one’s epistemological commitments. I tend to agree with you that boxing should be avoided. However, the alternatives to boxing…? Another blog, I think. My only caveat: whatever conclusions we produce in this process cannot possibly be simple and must always be open to further engagement.

    Thank you for your thorough responses.

  7. Indeed. My last post for the day – dinner beckons. I agree. Pretty much everything we deal with in this area is “messy” and no absolutes or clear direction is readily available. No one after all, has tried to do what we are trying, assuming that we are indeed trying. Which brings me to reconciliation and empowerment. Can we in South Africa afford to try to find absolute reconciliation, or should we be content to find something that looks like it? Perhaps, deriving from that, will we ever find a model of BEE that works absolutely, or one that moderately works. Are we not leapfrogging into the unknown when we should be stepping on stones across the pond? Perhaps we should be satisfied with a willingness to honestly make something work, as a first step? In my view, that first step, that first attempt has flounded because we simply are not interested in the altered states of mind that changed minds presumably make possible? We are not interested in the “other”. BEE 2.1 is for me, a willingness to journey outside oneself to discover the meanings of Timbuktu, Moshoeshoe, Hintsu, ubuntu and so forth: not the romaticised versions, I hasten to add, but the deeply embedded in Africa versions. Only then does “otherness” have the capacity to widen our horizons and make us see where we reside, what the real challenges are, and what price we have still to pay for a peace that is not guaranteed.
    Happy din-dins.