The demise of apartheid in 1994 left a skewed racial economic hierarchy that placed whites firmly at the top, followed by the category broadly known in empowerment language as “black”, namely Indians, coloureds and Africans. 

 

The ANC government has made Black Economic Empowerment (BEE) a policy centrepiece, but by the party’s own admission BEE has failed to improve the lot of the vast majority of black South Africans.

 

The stated purpose of empowerment is the “economic empowerment of all black people, including women, workers, youth, people with disabilities and people living in rural areas”. It requires the Minister of Trade and Industry to develop and publish Codes of Good Practice, aimed at setting guidelines for the process of BEE in the whole economy. A scorecard is used by the Department to measure compliance with the BEE requirements, and is used for public procurement, public-private partnerships, the sale of state-owned enterprises, when licences are applied for, and for many other relevant economic activities.

 

The PA accepts the need for empowerment, but believes that the nature of the beneficiaries of this empowerment must change dramatically and on a scale previously not imagined.

 

The government’s Black Economic Empowerment policies have drawn criticism from the Development Bank of Southern Africa for focusing “almost exclusively on promoting individual ownership by black people (which) does little to address broader economic disparities, though the rich may become more diverse”. This is a criticism that the PA underwrites, but the PA also has a solution for this problem.

 

Official affirmative action policies (including employment equity, affirmative action and broad-based BEE) have seen a rise in black economic wealth and an emerging black middle class. While there have been positive results from empowerment policy, not enough has been done to truly transform society more broadly, hence these initial steps with regard to empowerment must be expanded upon and grown.

 

In the past, with “BEE as usual”, South African companies have been required to ensure that their company shareholding has had a minimum 26% black-owned representation. At this stage, the PA does not intend to change this figure, though it may become necessary to do so in future.

 

In the past, many companies, particularly large established corporations relying on the state for their continued existence, have sold shares in their companies to black empowerment firms or black individuals at full or discounted rates in order to make themselves compliant. They have also “sold” BEE shares without the exchange of money, with the understanding that the cost of these transactions would be paid for through future dividend payments from the company concerned. In rare cases, shares have been donated to black empowerment partners without these being paid for, in the understanding that these empowerment partners would not sell the share for an agreed period of time in order to ensure that the company’s BEE compliance remains intact. The PA is not in principle opposed to how any of this has occurred in the past, however it would like to add a further dimension to empowerment and insist that this begin to take precedence over all other forms of empowerment.

 

The PA would insist that a People’s Empowerment Partner be established as a matter of urgent concern. This partner would not represent the interests of any individual or isolated group, but all black South Africans. It would be administered with the same sense of efficiency and lack of corruption currently being seen in the administration of pension and child grant payouts (which have been acknowledged as one of the few sectors of the current government system that are working well).

 

This People’s Empowerment Partner would then be the preferred partner to go into BEE deals with all companies in South Africa. Payment for shares can be arranged by any of the means outlined in 3.2.8, depending on the value of the company concerned and the probability that such a company would generate significant future profits.

 

Any profits from such participation in the business sector of South Africa would then be paid towards the People's Empowerment Partner (PEP), which would then divide the amount accrued among all registered formerly disadvantaged voters in South Africa and have it paid out to them on a monthly basis.

 

Only those black people who voted in the most recent elections of the country would qualify for such a payment as the Patriotic Alliance considers participation in the democratic process the ultimate act of patriotism and therefore only a voter should be in a position to enjoy a dividend from his or her share in the running of South Africa. Citizens of voting age who become registered voters can apply to receive their share of the national payout, and these amounts will be paid into an escrow account on their behalf. Once they cast their vote in the next election, the accumulated money will then be paid out to them.

 

Such payments would benefit in the region of 20 million South Africans (and possibly far more depending on voter turnout). Once the system has become fully functional, monthly individual payments could move from a value of a few hundred rand to several thousand rand.

 

The PA firmly believes that the majority-poor voters of South Africa would be best-placed to choose how to spend and/or invest this money. It would rapidly create a consumer class in South Africa that would become the envy of the rest of the world and serve as a catalyst to propel South Africa’s economy forward. The South African economy is currently stagnating, in the hope that the middle class and the very wealthy will be able to invest and spend enough to somehow propel the country forward — despite it being obvious that this alone could never be enough.

 

Foreign direct investment partners would be made to understand that when they begin any new projects, businesses and industries in South Africa, their preferred investment partner would be the South African people as a whole. The PA believes that its people and the state are inseparable. The state (government) is not there to become wealthy by exploiting its people. The people must be made to taste wealth through the state’s work on their behalf.

 

It may be necessary to charge taxes on the money flowing into the People's Empowerment Partner company (to sustain the country in the same manner that all businesses are taxed). But it must be understood that this is not a form of nationalisation but is broad-based black economic empowerment in its truest sense. Every last cent of this money, whether taxed or not taxed, is to be paid out to the PEP’s shareholders, who are the registered and participating emancipated voters of South Africa, all of them people who would not have been allowed to possess the vote more than 20 years ago.

 

Black companies and individuals will not be prevented from buying shares of any percentage in any company, be that company in partnership with the PEP or not. 

 

A company that already has a 26% share with a black partner would not have to partner with the PEP, although nothing would prevent the PEP from being free to buy further shares in such companies if such shares become available, in order to benefit its shareholders, the South African black voting public.

 

If a company already has requisite black ownership, it may not be necessary for the PEP to become involved in ownership of that company. The PEP should not be seen as a barrier to the participation of black entrepreneurs in the market, though the PEP would be a competitor to such entrepreneurs and would be the preferred partner for any new deals.

 

Wealthy black individuals who have already benefited massively would be encouraged and perhaps even be regulated in such a manner that part of their wealth begins to flow to the PEP. This can be seen as a gesture that our first struggle for political liberation has been won, but the struggle for economic liberation still has many miles and many years to go. But the PA will not rest until South Africa becomes a more equal society.

 

The PEP will focus its participation on a number of key industries to start with, particularly those that are sustained on the back of state resources. These would include the mining sector and the energy sector and the participation of elite black partners in such industries would be the first targets of reform in order to ensure that their shares in these companies start to become more equitably shared among all the black people of South Africa. All industries will, however, be considered for partnership with the PEP and will ultimately be owned to some degree by all the people of South Africa.

 

Once the income and inequality gap has been shrunk thanks to this empowerment measure, along with other steps, the restriction of allowing only black voters to participate in this wealth-creation mechanism can also be lifted to allow all registered voting South Africans, including white South Africans, to benefit from the PEP’s ownership of the economy. Part of this will be necessitated by the fact that the world is becoming increasingly mechanised, putting millions of people out of work, regardless of their race. An alternative economic model, such as this will need to be developed in order to ensure that humanity as a whole is not made redundant by the march of technological progress, with only 1% or even less of the world’s population in control of 99% of its economy (the inevitable outcome of an unregulated, unmoderated capitalist system).

 

This wealth-creation mechanism is a virtuous circle that retains a greater percentage of the nation’s wealth within its borders, spurs on consumer choice in relation to spending or saving and creates a platform that can launch thousands of smaller businesses, thereby growing the economy and employment and ultimately the tax base as a whole. Even in the years prior to white people being included in the payouts, the benefits for white-owned businesses and industries will be obvious, as the consumer base will have grown substantially, thereby increasing the revenue streams of all businesses, regardless of their ownership composition.

 

Employment equity:

The PA supports employment equity proposals that place quotas on workplace representation according to South Africa’s demographics.

 

The PA would however introduce a system that deals with such demographics according to regional and not national prevalences.