President Jacob Zuma recently called for a national debate on black economic empowerment (BEE), stating that it served only narrow business interests.

The Economist, in March 2010, claimed that BEE and affirmative action policies had failed black South Africans.

Instead of redistributing wealth and positions to the black majority, BEE has resulted mainly in a few individuals benefiting handsomely, while leaving the leadership of most big companies in white hands.

The black masses, the intended beneficiaries, have hardly gained.

Largely as a result of the emergence of this new BEE elite, post-apartheid South Africa is still one of the most unequal societies in the world. Although effects of poverty have been softened through provision of welfare benefits to more than one in four South Africans, the gulf between rich and poor has widened, claimed The Economist.

“The richest 4% of South Africans – a quarter of whom are black – now earn more than R560 000 a year, 100 times what most of their compatriots live on,” it added.

Under apartheid, blacks received inferior education and on the whole were restricted to the worst jobs. The Employment Equity Act in 1998 tried to make the workforce “more broadly representative of black people” across the board.

But more than a decade later, whites still hold three-quarters of senior jobs in private business whereas blacks have 12% – the exact reverse of their share in the working population.

Among the 295 companies listed on the Johannesburg Stock Exchange (JSE), blacks account for only 4% of chief executive officers, 2% of chief financial officers and 15% of other senior posts. (Source: The Economist, 31 March 2010)

As whites account for 40% of university graduates, a 12% quota for whites in skilled or top managerial positions is absurd, says the South African Institute of Race Relations think tank.

Its head, John Kane-Berman, argues that BEE, in the way it has been implemented so far, has actually harmed blacks by discouraging self-reliance and an entrepreneurial spirit.

Instead, it has fostered a debilitating sense of entitlement.

Can anything be learnt from former models of empowerment?

The Afrikaner model

The African National Congress, in its Umrabulo journal, debated the role of Afrikaner economic empowerment. It said: “Afrikaner economic empowerment was directed at a narrow ethnic base, and relied on the super exploitation of black people to achieve its chauvinistic ends.

“Nevertheless, a crucial lesson of this history is that Afrikaners were able to unite their own capital, political formations, mass media and civil society in a common effort toward resolving the ‘poor white’ problem.” (Umrabulo, number 22, 1st Quarter 2005)

Achille Mbembe, a research professor in History and Politics at Wits University, in his Steve Biko lecture, said something could be learnt from the Afrikaner model of empowerment.

To a large extent, this was a social movement, and not simply a state-inspired initiative.

It is significant that this was an economic movement with intellectual and cultural foundations.

In order to foster their economic upliftment, the Afrikaners created two structures: Federale Volksbeleggings (FVB) and the Reddingsdaadbond (RDB).

“The role of these two institutions was to mobilise capital; to pool the financial resources of white Afrikaans commercial farmers, entrepreneurs and workers; to regain control of their savings, labour and buying power while promoting self-help at various levels, including language, culture and politics.

“That is how almost every Afrikaner came to have something at stake in the future of South Africa – a home, a job, an education, something they were ready to fight for and to protect,” said Mbembe. (Source: Biko’s Testament of Hope, 2009).

Flip Buys, general-secretary of Solidarity, the largest independent trade union in South Africa, said the broader left wing on the South African political landscape is of the opinion that the key to economic power is state power.

“The Afrikaner economic empowerment process commenced long before they grabbed political power in 1948. They focused on entrepreneurship. Their motto was: ‘We can capture the commanding heights of capitalism through entrepreneurship’,” he explained.

Buys agreed with Moeletsi Mbeki, deputy chairperson of the South African Institute of International Affairs, that some of the top entrepreneurs are erroneously made partners of existing big corporations, instead of allowing them to start their own business.

Entrepreneurs started top companies for the Afrikaners in the 1940s, without state intervention, he added.

Fred du Plessis, executive chairperson of Sanlam at the time, denied that political power helped Afrikaans business to succeed. “The Afrikaner can look back, not because he was privileged to receive state grants, but because he was capable of putting himself forward and fighting for his economic position,” he said. (Cape Times, 8 July 1986).

Professor Hermann Giliomee, extraordinary professor in the Department of History at the University of Stellenbosch, said there are two routes to the empowerment of an economically backward group.

One is the advancement that is driven by the state, which imposes on large corporations the obligation to promote the economic empowerment of a racial group.

In the case of the Afrikaners, economic mobilisation formed part of a general ethnic mobilisation. While the Afrikaner-controlled state, after 1948, massively aided all whites, Afrikaner business increased its market share through serving a niche market.

It received little ethnic patronage from the state or assistance from English corporations.

Afrikaner entrepreneurs such as MS Louw, Anton Rupert and Andreas Wassenaar took as much pride in their individual success as in their corporations, managing to capture a larger share of the market for the Afrikaners as a group. (Source: South African Journal of Economics, volume 76, issue 4: December 2008)

The economic movement

Afrikaners were poorly represented in many white-collar occupations in the 1930s and the early 1940s. In 1939, only 3% of people in prestigious professions were Afrikaners, said Prof. Giliomee.

Of the white population, Afrikaners made up 3% of engineers, 4% of accountants, 11% of lawyers, 15% of medical doctors and 21%
of journalists.

A 1947 study presented this portrait of the urbanised Afrikaner poor: “His poverty, servitude and desperate search for work feeds a sense of dependency and inferiority.

“Feeling unwelcome, he presents himself poorly, he is timid, walks hat in hand and lacks the greater self-confidence of the English work seeker.” (South African Journal of Economics, volume 76, issue 4: December 2008)

Prof. Sampie Terreblanche, author of A History of Inequality in South Africa, 1652–2002, said the Afrikaner share of the non-agricultural private sector was less than 10% prior to 1948.

That increased by nearly 40% from 1948 to 1954/55, said Prof. Giliomee.

Prof. Franklin Sonn, a former rector of the Peninsula Technikon and former ambassador to the United States, said the Afrikaners used well-planned initiatives, programmes and projects in the 1930s and 1940s to uplift the Afrikaner community as a whole.

They further employed the existing social infrastructure to aid the poor Afrikaner.

“It was structured social upliftment within society without using state resources,” he explained.

“The close bond between church and school was also a factor in social engineering.

“The Afrikaners also used the so-called poor white national congresses to spur on the state to action,” added Prof. Sonn.

In 1939, Afrikaner economic and cultural leaders met in Bloemfontein to discuss a comprehensive plan for Afrikaner economic “salvation”.

Rejecting any element of charity, the plan was to mobilise purchasing power and capital to enable them to become economically independent.

One of the speakers at this first Economic People’s Congress (Volkskongres), LJ du Plessis, defined the goal of the congress as to mobilise the people to conquer the capitalist system and to transform it so that it fitted their ethnic nature, said Prof. Giliomee.

The message was that free enterprise was not intended primarily to create wealth for individuals for their own sake, or for a handful of individuals, but to help the Afrikaners as a people to acquire a legitimate share of the economy.

The congress established the finance house, FVB, which would be controlled by Sanlam. Afrikaners were asked to engage in conventional investments in shares in sound Afrikaans enterprises.

Prof. Giliomee said that the Afrikaner Broederbond stated in a circular to its members that all “proper Afrikaners” had 10 duties.

Among these were: Every Afrikaner must become a shareholder in an Afrikaans credit organisation; every Afrikaner must be a policyholder of an Afrikaans insurance company; and every Afrikaner must save and invest in an Afrikaans institution. (Source: South African Journal of Economics, volume 76, issue 4: December 2008)

The 1939 Volkskongres further established the RDB, or Rescue Act Society. The idea was that Afrikaners would pay membership fees in joining branches. Part of the Fund was used for loans to small Afrikaner enterprises.

The RDB’s most important contribution was encouraging Afrikaners to patronise fellow Afrikaner enterprises.

A factor in the Afrikaner’s strong economic upsurge after 1948 could be attributed to the decision by Harry Oppenheimer of Anglo American Corporation to sell the mining house, General Mining and Finance Corporation, at a very low price to a Sanlam subsidiary, Federale Mynbou, said Prof. Giliomee.

Prof. Terreblanche said Afrikaner empowerment was widespread after the National Party came to power in 1948. Where English-speaking people dominated government departments in 1948, it soon changed after that. For example, of the 126 officials in the Department of Native Affairs in 1948, only six were Afrikaans-speaking.

In the first half of the 20th century, the English had power in South Africa and abused it, while the Afrikaners were in power for the second half of the 20th century until 1994.

Thereafter, the black community took control and abused power. The difference is that the English whites constituted 8% of the population, and the Afrikaners 12%.

The black community constitutes 80% of the population.

Unfortunately, the public sector has imploded because of mismanagement and wrong application of BEE, said Prof. Terreblanche.

Entrepreneurship and work ethic

Prof. Johan Tromp, a former vice rector of the Peninsula Technikon, said there were several examples of Afrikaans companies such as Sanlam, Santam, Genkor, Rembrandt, Saambou as well as Volkskas formed by Afrikaner entrepreneurs without state assistance.

When Rupert started Rembrandt, he sold shares to Afrikaners to give them the opportunity to share in his riches. “His purpose was not to hold on to his own riches,” said Prof. Tromp.

“These companies also did not demand that the state play a role in their formation or call for nationalisation.”

Prof. Giliomee, in the article on economic empowerment of the Afrikaner, agreed with Prof. Tromp.

He used as an example Rupert, who stated: “I do not see free enterprise as a means of creating wealth for my own sake. The purpose of my business is to further the nation’s progress and to help Afrikaners to gain their rightful place in industry and their future as employers and employees.” (South African Journal of Economics, volume 76, issue 4: December 2008)

Dirk Hertzog, co-founder of Rembrandt, stated: “Our overriding concern was to prove that, by standing together, we (the Afrikaners) could take our place in the business world with dignity and honour.”

Nic Cronjé, CEO of Golden Arrow Bus Services, said the attitude of the workers and of their leaders during the 1930s and 1940s was a factor in the economic empowerment of the Afrikaner.

“People were just too happy to work, and enrolment on a massive scale was subsequently possible at relatively low cost. Leaders were focused on uplifting ‘their people’, and personal enrichment played no part in 90% of cases,” he said.

“The biggest difference between the two eras was in the attitude of people. Unfortunately, I see examples today of people having an attitude of entitlement instead of merit – like students who want qualifications, but don’t want to study; or workers who demand higher wages, but are not prepared to be productive.”

Final word

Mbembe warned South Africans to refrain from relying on the government to mobilise them and empower them economically.

“For black South Africans, in particular, freedom has to translate into an expanded control over their labour and their lives. It is the role of the state to galvanise them as they struggle to eradicate the legacy of violence that preyed on their vulnerabilities during the years of captivity,” he said.

“But economic justice will not be achieved if blacks do not realise that they must depend on themselves, as individuals and as a collective, in their efforts to rise above their low position in South African society.

“The surest road to a dignified existence is self-respect, self-help, independence of mind, creativity and ambition,” he added. (Source: Steve Biko lecture, 2009)

Fanie Heyns