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Race to the bottom?

11th March 2011

By: Terence Creamer
Creamer Media Editor


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“My friendships, my love, my education, my thinking and every other facet of my life have been carved and shaped within the context of separate development,” Steve Biko wrote in one of his columns written under the pseudonym ‘Frank Talk’, which were eventually compiled into the influential black-consciousness book I write what I like.

The essay was published as the policies of ‘grand’ and ‘petty’ apartheid were nearing their zenith, influencing every aspect of private and public life in South Africa, from who one could marry through to ludicrous attempts at creating separate tribal States.


Sadly, apartheid’s shaping influence did not diminish with the advent of democracy, nor have the attendant imbalances been adequately redressed through the formal efforts of government to do so, ranging from employment equity legislation through to black economic empowerment (BEE).

In fact, these efforts are associated with some unexpected and negative outcomes. For instance, it is fair to argue that the policy of BEE has been responsible for diverting corporate energy and focus away from job-creating growth and investment towards efforts that have been primarily geared towards the redistribution of existing assets.


Nowhere has this distortion been more apparent than in the mining sector, which all but missed out on the first phase of the resources supercycle, interrupted only temporarily by the global financial crisis of 2008 and 2009. So, while the Chileans, Australians, Canadians and Brazilians were calibrating their resources industries to this new growth cycle, South African executives were engaged with paper-based transactions, very few of which had expansionary spin-offs.

This digression aside, the main issue is the fact that South Africa, as a whole, and business, in particular, have not dealt decisively with the uncomfortable issue of race, which remains South Africa’s “dominant contradiction”.

This reality is leading to frustration, which, in turn, is manifesting itself in some less-than-helpful proposed legislation, epitomised by the draft amendments to the Employment Equity Act.

As Minister in the Presidency Trevor Manuel noted when tackling Jimmy Manyi’s controversial remarks about Coloureds, it is even possible that the proposed amendments may reflect the fact that “racism has infiltrated the highest echelons of government”.

Arguably, those claiming to want to overhaul the skewed racial composition of the economy have started to eschew logic in favour of chauvinism. Should such bigotry gain popular appeal, the outcome will again be a mismatch between the ingredients needed for sustainable transformation (growth, development and delivery) and the chosen policy instruments (unenforceable and unconstitutional racial quotas).

However, those appalled by the tone and trajectory of the current discourse should resist the temptation of simply dismissing it as idiotic. Unless there is an open and honest dialogue, pent-up racial frustration could well morph into a ‘race to the bottom’, as was the case during apartheid.


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