Eed Policy Can Improve Lives - Weekend Argus

25 August 2018 - Instead of intervening on a racial basis – as BEE does, too often enriching only a small politically connected elite but failing on any meaningful scale to help the poor and the jobless – EED proposes dealing directly with disadvantage itself.

Michael Morris

The most dramatic and effective strategy available to South Africa to overcome the lasting effects of a deep history of racial inequity is, ironically, one that faces the most resistance.

Outrage and incredulity invariably greet the suggestion that the real answer lies in abandoning race itself, as skin colour is only a deceptive indicator of appearances, and using it to mean anything else is as specious as it is intrinsically racist.

How, detractors ask, can South Africa possibly undo the effects of disempowerment, dispossession and deprivation exacted by race alone without identifying the victims, and delivering the redress, by race?

The liberal view – which the Institute of Race Relations (IRR) cleaves to as a matter of principled conviction – is that society is made up of individuals whose worth is not reducible to or definable by any other attribute than what is uniquely innate to them. If people choose to define themselves by race, it is their right to do so, but this is a choice no one else has the right to make for them.

It follows that the IRR rejects transformation or empowerment based on race. But if that cheers liberal hearts, what does it really mean when we confront, as we must, the real, lingering disadvantages in our society, and which conform broadly to race?

It is, in fact, much less of a conundrum than it may seem.

Proceeding from its principled position – coupled with the certainty that if South Africa is to prosper the disadvantage deficit inherited from apartheid and compounded by the failure sufficiently to overcome it since 1994 – the IRR has crafted a detailed alternative which we believe will be at once much more effective and fair, and can at the same time defeat the damaging mythology of race.

Our policy of Economic Empowerment for the Disadvantaged (EED) – which has been mentioned recently in the coverage of the Democratic Alliance’s grappling with alternatives to the ANC’s race-based Black Economic Empowerment (BEE) model – focuses unambiguously on the reality of a country and a society profoundly weakened by disadvantages which continue to burden the majority of the population. By some measures, the burden has actually increased since 1994.

But instead of intervening on a racial basis – as BEE does, too often enriching only a small politically connected elite but failing on any meaningful scale to help the poor and the jobless – EED proposes dealing directly with disadvantage itself.

The effect, in racial terms, would hardly differ from the intended noble objective of BEE. We have argued repeatedly that the primary beneficiaries of a genuine empowerment will be black people, since they make up the greater proportions of the poor, the jobless and the hopeless for whom BEE has indeed been what we unrepentantly call ‘a dismal failure’.

South Africa’s unaddressed disadvantages (after nearly 25 years of race-based ‘transformation) are stark in the data.

Of the 9.3 million unemployed South Africans, 6 million are under 35, and 8.3 million are black. The black unemployment rate is as much as 4 to 5 times higher than that of the white rate.

In an economy in which jobs are shifting inexorably towards high-skills sectors, it is sobering that the labour market absorption rate is 75.6% for those with a degree, falling to 50.3% for those with matric, and just 34 percent, on average, for those with anything less.

Education is the key, here. But the scale of disempowerment is staggering; just under half of children – most of them black – who enrol in grade one will make it to grade 12 and only 28% of people aged 20 or older have completed high school.

These figures illustrate the real divide, and the real task of empowerment.

Under EED, instead of numerical racial targets, the focus would be on doing the things that would improve the lives of poorer people; four ‘Es’ – rapid economic growth, excellent education, more employment, and the promotion of vibrant and successful entrepreneurship.

An integral part of EED would be a system of government-funded vouchers available to all means-tested South Africans earning below a certain amount, which they could use to access education, healthcare, and housing of their choice, giving lower-income families options many middle class people take for granted.

Under an EED policy, the current BEE scorecard would be replaced by one that would reward businesses for the investments they make, the profits they generate, the jobs they sustain or create, the goods and services they buy from other suppliers, the innovation they help to foster, entering into effective public-private partnerships to improve education, healthcare, and housing and maintaining and expanding essential infrastructure, as well as the contributions they make to tax revenues, export earnings, and foreign currency inflows. They would also score by topping up employees’ vouchers.

The inescapable reality is that disadvantage, not race, locks millions out of the economy, the ranks of the middle class – where most South Africans want to be – and the better life they have hoped for since 1994.

Black people in these categories deserve having their disadvantages removed, and their ‘race’ is not the problem.

- Morris is head of media at the Institute of Race Relations.

© 2018 South African Institute of Race Relations
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