There were a few reasons why Afrikaner Economic Empowerment was more effective than Broad-Based Black Economic Empowerment, writes Dr Jantjie Xaba (Department of Sociology and Social Anthropology) in an opinion piece for Mail & Guardian (29 June).
- Read the article below or click here for the piece as published.
Despite its promises, Broad-Based Black Economic Empowerment (BBBEE) has not delivered the same benefits post 1994 as Afrikaner Economic Empowerment (AEE) had done after the Great Depression of 1930. Both programmes relied on job creation, skills development, and welfare services.
However, unlike BBBEE, AEE went beyond this by relying on the Helpmekaarvereniging (Mutual Aid Association) tradition of mobilizing capital that triggered volkskapitalisme (people's capitalism). Since 1994, BBBEE has used similar strategies – within a different political and economic environment with a large, diverse population as its target – yet failed to deliver the benefits to blacks owing to various macro and micro factors.
In my recent doctoral study, I focused on how the four dimensions of empowerment, namely economic, political, social and cultural operated at the macro-level and how they were applied at a micro-level. To compare BBBEE and AEE, I used Iscor, now called ArcelorMittal South Africa (AMSA since 2004) in Vanderbijlpark as a case study by analysing relevant documents, conducting in-depth interviews and having focus groups discussions with current and former workers and managers as well as union officials.
When comparing these two programmes, we have to understand the nature and the role of the welfare state. Under AEE, since 1924, the National Party (NP) established a welfare state with the support from Afrikaner Nationalists that rolled out social services. This was maintained through legislation, fiscal steps, and a large network of parastatals to empower poor whites. Modelled on Keynesianism, these parastatals, including Iscor, were used to support a developmental agenda of the state that comprised of the provision of protected employment, housing, education, and medical services to white employees and their families. In Vanderbijlpark, Iscor Housing Utility and VESCO carried out these functions. Under BBBEE, the ANC formed a developmental state based on a liberal model that combined market-based, private, contributory schemes with minimum government support for social services. Compared to AEE, the impact was very little.
A closer look at the four dimensions of empowerment mentioned above revealed that political empowerment involves a collective struggle to increase control of the poor over resources and regulative institutions, and transformation of existing power relations. Under AEE, Afrikaner Nationalists adopted a political-legal framework to mobilize white Afrikaners and provide the basis for AEE. The Afrikaner Broederbond (Afrikaner Brotherhood) used patronage to systematically appoint Afrikaners in positions of control and ownership in government and parastatals to reduce power and control of English white-speakers and moderate Afrikaners not affiliated with the NP. After 1948, Afrikaner Nationalism remained a powerful political force that determined employment and skills development within the public sector and civil service.
The ANC adopted affirmative action and BBBEE as redress for demographic misrepresentation in appointments and promotions within parastatals. Its cadre deployment strategy was used to appoint blacks and women in senior management positions and as non-executive directors of the Iscor board. However, deep racial divisions overshadowed this policy as white employees at AMSA continued to enjoy more power. Additionally, senior management, middle management, supervisory and skilled positions were still dominated by whites, while blacks constituted between 83 and 96 percent of unskilled and semi-skilled positions.
Economic empowerment seeks to ensure that people have the appropriate skills and access to secure sustainable incomes and livelihoods. Since the depression, macroeconomic policy has focused on public redistributive policies such as taxes, transfers, and government spending. To this day, economic empowerment has been reduced to scorecards, graphs, indices, and scores. From 1924 onwards, with the support of white trade unions, AEE became a project of the nationalist government to roll out welfare benefits, to provide standard employment with regular hours, pensions, and service benefits to poor whites. This combination of racist labour market policies, social welfare, and favourable credit arrangement allowed the white elite to become professional and supervisors and steadily increased their real pay. This resulted in social mobility for many whites as many benefited from career advancement both inside and outside Iscor.
From the 1970s onwards, SOEs were criticized as being too large and inefficient to deal with growing debt. The NP government responded to the crisis by adopting a nation-wide program of privatization of SOEs, including Iscor in 1989. In 1994, the ANC applied the same strategy by adopting the Reconstruction and Development Programme (RDP) to increase spending on social development but later reversed this when it implemented the Growth, Employment and Redistribution (GEAR) strategy. GEAR focused on accelerating fiscal reform, furthering tariff reform, public sector restructuring, and continuing the reorientation of expenditure towards service delivery to the poor. Following the liberalization of trade, the steel tariffs declined from 30 percent to 5 percent, causing major flooding of the South African market by cheap Chinese steel products. This resulted in a reduction in sales volumes and production, as well as capacity utilization.
Under the new economic policy and new management, AMSA's number of full-time workers declined from 14000 in 1990 to 8500 in 1998 and 6000 in 2016. Additionally, AMSA adopted a labour market flexibility strategy in which 50% of its workforce were casuals, part-time workers, and subcontractors supplied by Monyetla Labour Broking, a subsidiary of VESCO. Further, AMSA outsourced non-core functions and services, such as fire detection, catering, security, facilities management, and cleaning services that have benefited white employees and generated precarious work for the majority of African workers.
The role of culture in enabling empowerment has long been debated by social scientists. French sociologist Pierre Bourdieu recognized culture as a form of 'capital', having material benefits and convertible to a wide range of assets such as linguistic services, scientific knowledge, and educational qualifications. In recent debates, social scientists applied social capital to explain how poor people develop bonding, bridging, and linking capital through social networks to foster moral responsibilities and norms, and social values to promote social empowerment.
My study found that under AEE, civil society organisations (CSOs) like the Broederbond, the Helpmekaarvereniging, and the Afrikaanse Christelike Vroue Vereeniging (Afrikaans Christian Women's Association) played an important role in organizing white Afrikaners and articulating their various interests in society, as well as building capacity and awareness of resources mobilization. This highlights the role of people, civil society organizations, and networks as resources to promote empowerment. Leaders of AEE in Vanderbijlpark used the Helpmekaar tradition to provide poor whites with some form of training, bursaries and offer support to establish Afrikaans-owned enterprises.
The Broederbond established Sakekamer (Chamber of Commerce) to facilitate social networks, cooperation amongst white businessmen, and to discover mutual benefits between Afrikaners and those in business and government. Iscor founded Iscor Club with membership restricted to whites only to foster the development of 'community' and promote the development of social capital.
Despite their notorious race policies, the Dutch Reformed Church (DRC) contributed to Afrikaner social empowerment in Vanderbijlpark by preaching and applying the late eighteen-century Calvinist doctrines of the Protestants. The DRC organized the Afrikaner community into a cultural fabric and encouraged principles of hard work, respect for the authorities, and an intolerant attitude towards dishonesty or corruption. In terms of language, white Afrikaners believed that the Anglicisation policies of the British Empire had destroyed their language. Through its Federasie van Afrikaanse-Kultuurvereniginge (Federation of Afrikaans Cultural Organisations), the Broederbond used Afrikaans to develop a homogenous group identity, build nationalism, and foster group cohesion among whites.
Under BBBEE, social empowerment was obliterated due to the lack of alignment between politics, the economy, and CSOs. Compounding this problem was the fact that before 1994, CSOs have been at the forefront of social change, fighting for democratic rights and social justice but post-1994, they were side-lined by the government. Despite the culture of Ubuntu and stokvels in African communities, few organizations except workplace forums existed in the black townships to promote social empowerment. African languages were suppressed at AMSA with English and Afrikaans acting as dominant languages. Religion in Vanderbijlpark was undergoing secularisation with old denominations disintegrating and new charismatic churches on the rise.
It's clear that AEE was more effective than BBBEE because firstly, even though economic empowerment was the ultimate goal, AEE was supported by political-legal and socio-cultural dimensions. Secondly, the AEE macroeconomic policy was underpinned by a Keynesian philosophy where the state, business, and white trade unions formed a social contract to uplift the poor. Lastly, CSOs played a major role in supporting AEE and the development of social capital using language, religion, and nationalism; while under BBBEE, CSOs were alienated from the state and, as a result, could not continue playing a key role in bringing about social change and social justice.
- Photo: A township in Cape Town. Credit: Wikimedia Commons
*Dr Jantjie Xaba is a lecturer in the Department of Sociology and Social Anthropology at Stellenbosch University (SU). This article is based on his recent doctorate in Sociology at SU.