South Africa: The End of Apartheid & the Emergence of the ‘BEE Elite’

Abstract

Recent South African policy making at the highest level has used the language of the developmental state. It has been used as a means of understanding and defining the purpose of ANC government. This article interrogates that concept, especially using the formation of an elite transcending the publicprivate sector divide and considering the concept of an ‘embedded elite’. In this light, the evolution of Black Economic Empowerment (BEE) policies are drawn out and specific comparisons made between South Africa and Malaysia. While creating an elite may involve enriching a small number of black ANC supporters, it is probably a necessity given the propensities of what remains of the established ‘embedded elites’ of the past. It is questionable however, whether this new elite has the sense of direction in pursuit of an industrialising economic model or a broad social model to carry through envisioned changes. Nor are its instincts necessarily democratic. While under the direction of the ANC the South African social structure is shifting in important ways and different sectors of the black population clearly benefit, the majority are not actively involved in a process of transformation that would offer the possibility of radical improvements.

Notes

1. This essay is related to ideas expressed in Freund, 2004, 2005 and particularly at length in Freund, forthcoming. Some of the material here is taken literally from this latter essay. For a related but somewhat different approach to these issues, see Southall, 2005b, 2007.

2. In considering one of the most economically developed African countries, Colin Leys (1996)applied this sort of approach to Kenya. In practice, the state has largely behaved in a predatory manner but Leys believed that this was not structurally inherent or unalterable. Kenya can be evaluated in this sense in the same light as Brazil.

3. For a classic radical analysis, see the contributions in Amin & Caldwell (1977).

4. From the introduction to Emsley (1996:1).

5. Although the parastatal Industrial Development Corporation was involved with the Sanlamdeal (Hirsch, 2005: 213).

6. The commercial property sector is the latest to enter the lists as of early 2006.

7. For Kebble's amazing empire, see Sam Sole in the Weekly Mail & Guardian, 3-9 March 2006.

8. Thus the Department of Minerals and Energy deputy director-general ‘said the department hadseen an increase in fronting by some mining houses and a systematic dilution of BEE shareholdings once mineral rights had been granted’, Mzwandile Jack in Business Day, 7 May 2006.

9. Thus electricity giant ESKOM has a black CEO trained as a town planner; from a list of publishednames, nine out of ten major division executives are now African; see also Southall, 2007:71-73.

10. Southall, 2004, provides a table where the Financial Mail claims to assess the twenty most important individuals in 2003 in South African business. Of these no less than nine were black: apart from Sexwale, Ramaphosa and Motsepe, three came from the parastatal sector, one from Anglo American and one from one of the cell phone giants. The remaining individual, Saki Macozoma, became notorious in the struggle over the succession to Mbeki when it was revealed that state intelligence was illegally monitoring his telephone in the interests, most likely, of one faction. Thebe Mabanga's list of 100 most important South Africans of the future – the ‘hot 100’ – at the start of 2006 included 28 business figures of whom no less than 22 had names suggesting black African backgrounds, Mail & Guardian, 23 December 2005 -5 January 2006, 15.

11. See Business Day, 21 December 2005.

12. However, this figure rises to over 15% when various types of institutional investors with predominant black clientele are added. Moreover, there are obviously many shares held by individual blacks in companies which are not predominantly owned by blacks. For a short guide to controversial figures, see Southall, 2004a:318-19.

13. By contrast the directors on state-owned enterprise boards were more than 60% black.

14. In an interview taken from research on the local scene in Durban, a prominent independent blackbusinessman who exhibited a real interest in ‘bricks and mortar’ expressed disappointment that it was so difficult to make money from manufacturing compared to financial speculation. Of course, it can be argued that this is the situation prevailing in the business world internationally today.

15. Some of the most remarkable and representative contributions would be Fine & Rustomjee,1996, Gelb, 1991; Legassick, 1974; Lipton, 1986; Marks & Trapido, 1981; Morrell, 1986; O'Meara, 1996; Yudelman, 1984

16. This is the conclusion of Susan Martin with regard to the expanding palm oil sector, ‘EuropeanPlantation Firms and Malaysian NEP since 1970’, unpublished paper, International Economic History Conference, Helsinki, 2006.

17. Emsley (1996:73) refers to more than a 27% investment rate over ‘the NEP period’ where post-apartheid South Africa's figure has barely crept up to 17% at peak so far.

18. For a recent parallel view see Southall (2007:67): ‘… while there is a strong case for arguing that BEE (or some similar programme to correct racial imbalances) is a political necessity, the ANC needs to do more to combine the ‘empowerment strategies’ with a better life for all.’

19. For a thought provoking and wide-ranging assessment of South African social structure, see Seekings & Nattrass (2005).

20. In addition as Ong (2006) points out, Malaysian policies towards non-Malay aborigines and toimmigrant workers, especially those not easily assimilable as Malays, are very questionable.

21. Nonetheless radical critics such as Ong and Jomo K. have emphasised the racialised nature ofaffirmative action in Malaysia and the consequent failure of state policies genuinely to transform the ‘plural society’ of colonial times.