Saturday, October 08, 2011

South African black business should rise above petty squabbles and build a developmental state.

South African black business should rise above petty squabbles and build a developmental state.

Nyiko Floyd Shivambu

The squabbles encountering black business formations and their white counterparts in the aspiring Developmental State of South Africa is a reflection of the class and racial contradictions that continue to underpin South African society as atavistic remnants of apartheid and its ideologies of white supremacy and African subjugation. In the process of squabbling, what is supposed to be progressive black business is missing the point on what should be its role in the aspiring Developmental State of South Africa. It appears that the contentions of the Black Management Forum breakaway are centred on the emphasis of black inclusion into the colonial economy of South Africa.

All honest people, including conservative analysts should agree that the South African economy bears very vivid features of colonial economies. Colonial economies were positioned by the coloniser, now the imperialist, as suppliers of natural, raw and semi-processed materials and insignificant importers of finished goods and services. 17 years into democracy, South Africa’s top 10 exports to the United Kingdom, European Union, United States and China are natural, raw and semi-processed goods, more especially mineral resources and metals. Conversely, South Africa’s top 10 imports from these countries are finished goods and products, some of which are produced out of the raw materials South Africa exports.

Now this is how colonial economies were designed to do and this is what colonial conquest of the African majority meant. It is therefore a responsibility, actually an obligation of emergent black businesses to overturn this situation by decolonising the South African economy. It is only black business that can reliably decolonise the South African economy because those who were empowered by the past system continue to benefit from the status quo. They have then chosen to co-opt some amongst the black majority to rapaciously reap the fruits of the South African colonial economy through Black Economic Empowerment. What BEE has achieved is creation of shareholder capitalists, instead of the industrial capitalists needed for labour-absorptive industrialisation and diversification of the South African economy.

The democratic dispensation has therefore created predominantly two components of black capitalists, whose contribution to the total onslaught against unemployment and poverty is insignificant. It is the shareholder capitalists, who were co-opted into existing capital by those empowered by apartheid and contract capitalists, mistakenly referred to as tenderpreneurs in other circles. The latter group cannot be referred to as tenderpreneurs because such suggests they are entrepreneurial in their efforts to maximise profits, sometimes at the expense of quality services to the people. The term contract capitalists, is more suitable because not all capitalists are entrepreneurs, and contract refers to the un-sustainability of the manner in which they accumulate wealth and profits.

What South Africa needs are industrial capitalists who will not only initiate businesses to manufacture goods and services, but will create workable, sustainable partnerships with established industrialists from the developed and developing countries to invest in South Africa. This will lead in massive transfer of skills, education and expertise on how most of the minerals are beneficiated and industrialised into finished goods and services. In the process, many job opportunities will be created because almost everywhere, manufacturing and beneficiation are highly labour-absorptive and less skill intensive. Most employees in beneficiation and manufacturing do not need three year diplomas and qualifications, and more than 80% of South Africa’s unemployed population does not have three year diplomas and degrees, despite the fact that they are employable.

These are the issues the progressive black businesses should be debating and fighting about, and additionally lobby government to put in place legislations that will enable domestic beneficiation, manufacturing and industrialisation to thrive. This can happen minimally through amendment of the State procurement policies and requirements, and maximally through substitution of imports on areas the State intends to grow and develop through higher tariffs. These can be complimented by the social mobilisation campaigns of buy-local, such as Proudly South African and what COSATU sometimes does. Import substitution is not alien to the politics of developmentalism, because all the countries that massively developed since the end of World War II had to protect their domestic industries and markets from aggressive foreign competition. A Developmental State should in essence play such a role.

In the case of South Africa, the so many trade agreements which our government signs almost every fortnight should almost emphasise the necessity of local beneficiation, manufacturing and industrialisation. Instead of facilitating questionable BEE deals, the South African government should provide practical support politically and financially to entrepreneurs who have viable plans to form massive manufacturing and industrialisation partnerships with established industrialists. In such a way, the State will be playing a developmental role and contributing to creation of many job opportunities and therefore reduction of massive unemployment and poverty. South Africa needs formidable black industrial capitalists, who will supplement public service in the creation of so many job opportunities.

Importantly and because the 17 year old ANC democratic government has learned bitter lessons, such an environment of massive industrialisation and diversification of the South African economy cannot happen if the State is only playing a facilitating role. The State facilitated all the transformation and redress charters in almost all sectors of the economy and none of the set objectives were ever met. Painfully, no one was held accountable that the ownership and management redress targets agreed upon by all sectors were not fulfilled. Why did South African government waste resources and time drafting and establishing consensus on empowerment charters and Acts of parliament which were never implemented nor complied with by anyone? Is the South African State a banana republic that cannot enforce its own laws?

In the proposed strategy, the State should own and control strategic sectors of the economy, particularly those that provide industrial inputs. In such a way, the State will be able to incentivise new industrialists to invest in South Africa, because of guaranteed access to cheaper and easily accessible industrial inputs, particularly minerals, water and energy. The State should continue its ownership and control of transport and logistics services provided by Transnet currently and in a such a way be in a position to prioritise business that will trickle down to develop South African communities though job creation and therefore poverty reduction. This is important because businesses that undermine their commitments to State entities like ESKOM still use South Africa’s harbours to export coal, which legally belongs to ESKOM. Everyday South Africa’s natural resources are drained through our harbours without meaningful contribution to real development of the people.

State ownership and control of strategic sectors of the economy is not only economically sound, but socially, politically and morally meaningful. The reality of mining in South Africa today is that it brings more suffering and diseases to the people than benefits. It is an understatement to suggest Mineworkers are treated like slaves, because slaves had longer life-expectancy and therefore a possibility to be liberated in a lifetime. The life-expectancy of mineworkers in South Africa is reducing everyday due to unsafe working conditions, occupational injuries and massive spread of diseases. The State should make a long overdue intervention and save humanity, before it is too late. 

This is conclusively an economic development model that can rescue South Africa from the high levels of unemployment, therefore poverty, starvation, diseases, crime and many other social ills. This model should be complimented by massive investment in education and training of all people. Post secondary training and education should be compulsory, and this should include the vocational training of those who drop out at Grades 10, 11 and 12. Subsidisation of labourers will not benefit society, because private companies will in the cause of chasing profits, substitute real employees for government subsidised employees and dump them once the subsidy is finished. There are so many youth developmental programmes the subsidy money can be channelled to, instead of provision of free labour to rapacious accumulators of wealth.

In the process of squabbling and throwing mud at each other, those who refer themselves as black businesspeople should think out of the box and begin to create real wealth and not fight over who is co-opted into the existing wealth which the State should ultimately own and control. They should ask amongst themselves of how many people have they employed in new industries, firms and factories. They should ask themselves of where do all the electronics, fridges and so many gadgets that almost everyone owns come from and how many job opportunities would be created if those were manufactured in South Africa. They should ask themselves why South Africa continues to import food, despite massive agricultural capacity. Only when black business begins to ask these questions will they gain our genuine sympathy, but as things stand, they are embroiled in petty squabbles of who is closer to big business than the other.

Nyiko Floyd Shivambu

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