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Empowerment of elites is no way to build equal society
July 15, 2009
By Tseko Nell
Our economy can only thrive on a basis of meritocracy. There is no shortcut. There is a problem of systemic mismanagement and corruption that pervades the public and private sectors.
This results in the denial of equal opportunity to participate in all corporate sectors. The big corporations are interested in employing and paying connected people who will open doors for business and tenders to make a quick buck, no matter how inept those directors are - as long as they have political connections and are black.
On the other hand, we have government officials who are colluding with established business interests and are prepared to take bribes and graft. This short-term outlook results in misallocation of scarce economic resources to non-sustainable deals and programmes.
The massive earnings in these investments are hastily repatriated to London, New York, Paris, Toronto and so on to pay dividends and capital gains to shareholders there.
They are not reinvested in our economy to increase productive capacity and enhanced South Africa's global competitiveness in the supply of value-added services.
When incompetent leaders are appointed to high office, this causes resentment among dedicated professionals. These managers are paid disproportionate bonuses in contrast with meagre pay cheques to the professionals who do the real work of service to the people.
This is the root cause of all strikes, underpinned by unfairness in the allocation of scarce resources. Professionals then opt out of civil service to consult to their previous employer, thereby playing catch-up by earning multiples of their previous salaries for the same output.
Owners of corporations and political leaders should give thought to integrity and professional background in appointments of executives and cabinet ministers.
Dysfunctional appointments and disproportionate rewards result in waste of scarce economic resources and lost productivity in the economy.
The Black Management Forum was founded in 1976 to influence socioeconomic transformation of our country. Many of its luminaries have matured into top executives whose investment decisions affect the working lives of most citizens as well as the economic growth of the country.
Having a presence and a voice in these corporations is important for our economy and country. These emerging black executives have an opportunity to leverage the broader interests of South Africa in a way that will help the country hold its own in the global economic space and free it from the trappings of imperialism and colonialism of a special type.
Some among these elite black leaders sit on as many as 20 corporate boards a person, in South Africa and globally, and earn lucrative allowances for their names being on these boards. If they are up to the challenge of leadership, we should see opportunity to spread directorships and thereby groom other good African executives.
They can promote proudly South African enterprises that can supply consumer goods and services to local, especially rural, neighbouring and international markets. With the background of extensive travel they can promote high service standards and set the tone in business ethics, particularly among top South African firms and society in general, and help protect consumers, the working masses and the indigent from being fleeced by monopolistic pricing behaviour of some of these big multinational corporations.
Is the role of empowerment leaders merely to open doors to executive government leaders who make decisions about the economic and legal framework of South Africa that facilitates business activities and transactions for their corporations? Should they be engaged in collusion to avoid compliance with the very laws that are meant to give citizens an equal opportunity to participate actively in the economic activities of our country?
Some actively promote practices that undermine the authority of the state to assert national interests. Such practices, when unchallenged, undermine meritocracy and the social fabric on which morals are premised.
They demotivate good employees and disincentivise conscientiousness in the execution of civil service tasks by employees. They promote a culture of mediocrity and corruption in public service, thereby undermining service delivery.
A lot of our people lost jobs during the liberation struggle and the anti-investment campaigns against apartheid and have never been able to find work since, as investment has been trickling back only marginally and is at the fancies and whims of the big multinational corporations.
Today our black business leaders sit on boards that preside over the retrenchment of workers who have to support extensive families.
Let us change this consumerist culture of the few comprador elites and build a sustainable economy. Citizens of developed economies have social security because they reinvest earnings in their own economies. Perhaps this can go a long way to alleviate the scourge of crime and corruption if we can lift up downtrodden compatriots by creating jobs through investing in the productive capacity of the economy and provide social and economic security.
Archbishop Emeritus Desmond Tutu warned the following in 2004 in his Nelson Mandela Annual Lecture: "What is black empowerment when it seems to benefit not the vast majority but a small elite that tends to be recycled? Are we not building up resentment that we may rue later?
"We were involved in the struggle because we believed we would evolve a new kind of society. A caring and a compassionate society. At the moment many, too many, of our people live in gruelling, dehumanising poverty. Poverty and unemployment pose the most immediate threat to our safety and security."
Democracy-loving South Africans should revisit that address, it can inspire us to create a socioeconomic legacy.
Nkosi Sikelela iAfrica.
Tseko Nell is the chief economist at the Department of Minerals and Energy. These views are his and not those of the department. Nell can be contacted at 012 679 9074.
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