In the past week Labat Africa, the black-owned investment group led by former rugby boss Brian van Rooyen, released its long-awaited financial statements.
These indicated a staggering jump in profit from operating activities, from a R26m loss to a R113m profit, driven largely by its investments in SA microchip maker SAMES and its cannabis research and retail division, which it intends to sell.
For all its challenges (including a squabble with the taxman and legacy litigation at SAMES) Labat is far from a black firm that “creams it” from dividends while chilling at the beach. It’s a different example of the straw men built up to persuade South Africans that broad-based BEE is nothing beyond a trough for a Veblenian leisure class.
BEE is a diverse but integrated (set of) socioeconomic strategies that goes beyond changes in ownership to include skills development, employment equity, preferential procurement and diverse forms of social and collective ownership of productive assets.
Yet the naysayers intentionally strip BEE of this integrated character to set up a straw man against which a flimsy argument can square up against a vacuous idea; that the financialised and costly put option in the financing of deals is the prevalent, if not the only, form of economic empowerment.
The new discourse frames the critique of equity deals (a view held across the spectrum) as an end-point, a moment to call time on the policy. Yet this discourse obscures the design shifts that have unfolded over the past two decades.
Shifts in policy and practice
The period after the global financial crisis and the interest rate path (as most of the “palace deals” relied on debt) further disincentivised the heavily leveraged buy-ins of the earlier period, giving rise to some policy and programme experimentation in the form of widening worker ownership, some ill-fated attempts at collective and social ownership and shifts in the structure of vendor financing.
To suggest that the sum total of this experience is reducible to the largesse of the handpicked barons in the city or the kulak in the countryside is patronisingly false. The mixed experience, with scattered wins and visible setbacks from which all can learn, is lost in this discussion. So too is the widening of ownership and value creation in niche and new sectors such as information technology, renewable energy and biotechnology, further complicating the pub banter about the “connected 100″.
BEE does not suffer from tactical stasis, or a shortage of tools. Rather it is often plagued by an uneven exertion of political will and economic support to explore its constituent elements. Such as the near-total absence of sector codes issued under section nine across manufacturing subsectors which, while similarly reliant on the state for authorisations and economic rents, exhibit a readiness to change.
That can only be remedied by changes in public regulatory and purchasing decisions. For how else might we further explain that two largely black-owned manufacturers on Lincoln Road in Benoni similarly suffer demand uncertainty, while cheaper imports take up more space in public contracts?
To parade the narrow accumulation of a few as the signifier of the diverse whole of the experience of BEE is to infantilise the discourse and obscure the real discussions we ought to be having.
The white South African liberal dream is of redress without redistribution, change without ethno-national complications and class. Change without change.
Writing on the “biblical” contradictions of the looming takeover by Italy of Abyssinia (Ethiopia) in 1935, William Edward du Bois highlighted that precisely because “economic exploitation based on the excuse of race prejudice is the programme of the white world”, our problem takes on transnational concern.
If a meaningful programme of economic redress in SA from the nightmare of colonialism were to succeed it would present too incendiary an example to contain elsewhere.
• Cawe is chief commissioner at the International Trade Administration Commission. He writes in his personal capacity.
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