Real economic empowerment

Real economic empowerment

Source: Real economic empowerment | The Financial Gazette May 4, 2017

By Eddie Cross
MUCH of the rhetoric in southern Africa in the years following the transfer of power to the majority surrounds the issue of economic empowerment.
This has several meanings — one is the question of how to transfer power to the previously marginalised majority, another concern is how to take control of the private business sector in all its different forms, another concerns access to resources while another involves how to improve opportunities for employment.
The record is mixed — some success but many failures and some of them very costly.
The Afrikaners were pioneers in Africa in the same way as they showed the world how a small community could fight and almost defeat a super power when they attempted to overthrow the colonial regime of Britain in the Boer War at the turn of the previous century.
A tiny population of Boer fighters kept an army of 500 000 men tied down for some time, forcing them to use ever more extreme methods to suppress the rebellion.
The Afrikaners fought the first guerilla war and many countries in Africa followed suit as they pursued independence and control of their own affairs.
When the Afrikaners won the elections in 1949, they represented a marginalised people with little real economic power.
This was held, by and large by the “Uitlanders” or foreigners and the new leadership recognised that they represented a majority of whites who were at the bottom of the food chain.
“Poor Whites” were a real problem and the new power brokers recognised that they had to have economic as well as political power and that they had no choice but to pursue policies that protected their own people and gave them a sense that they were better off under the National Party.
To accommodate the majority South Africans who were not of full or partial European ancestry, they envisaged a State where people could pursue their own interests in their own areas — they called it Apartheid. But their main focus, as it always is, was on their own people or “volk”.
They were stunningly effective and within a generation, they had created a network of Afrikaner institutions that supported every aspect of their lives in the new South Africa.
They reserved certain jobs for whites and made sure that the majority who took up these openings were Afrikaners.
They fostered their language and Afrikaners took the lead in many fields — it was an Afrikaner Physicist who created the first nuclear bomb for South Africa and an Afrikaner who made the world’s first heart transplant.
Afrikaner intellectuals were soon making their mark in many fields of science and business.
After just 50 years, this tiny minority tribal group had transformed itself into a powerful and feared community with near total control over all aspects of life in South Africa.
When finally they concluded that the South Africa they had created was unsustainable, they took the lead in taking charge of the transition and were totally realistic about their heritage and role in the new dispensation.
They negotiated a new constitution that would protect the fundamental interests of all South Africans, recognising that they could only protect their own interests if they were shared by the great majority of South Africans.
They also accepted that in the new South Africa they could not expect to hold power in a political sense, rather they sought influence with the new power elite in the ANC.
Today the top corporations that were created by the Afrikaner community during the Apartheid era are amongst the largest companies in the world.
The Afrikaner Newspaper group; started as a propaganda arm of the National Party has been transformed into a global media company and is the third largest in its field.
The Old Mutual is one of the largest financial services groups globally; the list is long and prestigious.
They fund the African National Congress (ANC) and you seldom hear of any criticism of the Afrikaner community from the ANC — or anyone else for that matter, as a transition, it was very skillfully managed.
By comparison the crude attempts of the ZANU-PF Party in Zimbabwe after the transition in 1980 have been ineffective and poorly conceived and managed.
The “Fast Track Land Reform” programme has displaced 4800 farmers — the majority white Zimbabweans, but have failed to replace them with people who have made a success of the programme — instead we have thousands of farms that are now derelict and abandoned, stripped of their assets and the occupiers remain poor and marginalised.
They have not even been able to deal with the legal and political aftermath.
The attempt to “indigenise” the economy has been a similar story; they passed a law that attempted to force all significant firms to “cede” 51 per cent control of their enterprise to people who were classified as previously disadvantaged.
It was flatly rejected by every firm in the country and brought all inward investment and any local investment activity to a complete halt.
Zambia tried the same strategy with the Mulungushi Declaration after independence.
All firms employing more than 100 people were required to “cede” majority control to the State.
The Zambian economy simply ran into a brick wall and it took another 40 years for Zambia to reverse the whole strategy and put their economy back on its feet.
The more subtle strategy of ZANU-PF which was to control all aspects of national life in Zimbabwe has similarly failed, the adage that the more you seek control the less you control has certainly been true here.
Today the State, despite all efforts to control and direct economic and political life, has shed all popular support and completely lost control of the economy. Perhaps three quarters of all economic activity here is informal, most foreign trade is illegal and the majority of people in business actively avoid paying taxes.
So how do we empower people who come from poor disadvantaged backgrounds?
If I look at my own case, I was born into a family where my mother, with barely two years of formal school education found herself trying to raise five children.
One was sent to South Africa to grow up and the rest of us had to do with what a secretary brought home.
We had our first boost when the public housing in which we were staying was simply transferred to us by the State and we became home owners.
I will never forget the transformation that wrought in that poor white community in which I lived.
The second key issue was that I was able to attend school, right through to ‘O’ levels, virtually free and the education we got was world class and bore no resemblance to my conditions at home.
When I used my basic education to get a tertiary education — the cost to me was affordable and I was able to work my way through College and University.
My education opened doors for me and the rest was up to me and I was the CEO of a major company before I was 40 years old.
I did not own a jacket until my older brother bought me one for College, when I was 20 years old. African governments have to try to provide these basics for their people — a decent education is fundamental, security of tenure over personal assets like a home are equally empowering. When nations deny these fundamentals to their people, they do the opposite of empowering them — they impoverish them and this is all too common in Africa today.

Eddie Cross is a renowned economist and an MDC-T Member of Parliament for Bulawayo South. 

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