Righting Wrongs: Affirmative Action in South Africa
Kovacevic, Natasa, Harvard International Review
South Africa has in recent years passed legislation instituting the world's most rigorous form of affirmative action. The Broad-Based Black Economic Empowerment Bill strives for the "effective participation of black people in the economy" in order to achieve the "economic unity of the nation." Although the professed aims of Black Economic Empowerment (BEE) are noble, the program has achieved little success in eradicating poverty, increasing employment, or fostering overall economic growth. Whether the new legislation is government-sponsored discrimination or rightful redress of apartheid injustice, remains a matter of controversy. What is clear is that the initiative is an inadequate approach to extending prosperity. The unfortunate result is the displacement of one elite in favor of another, as income disparity within the black population widens.
BEE is based on redistribution according to race rather than wealth or income. Businesses are expected to fulfill rigorous race quotas in a quest for a "demographically representative" staff. Redistribution legislation has made it more difficult for skilled white workers to find employment domestically, resulting in an outflow of skill. Between 1994 and 2001, the percentage of enterprises that perceived the emigration of skilled manpower as "significant" rose from 2 percent to 33 percent. This disturbing skills shortage in many sectors of the economy is accompanied by slow economic growth rates that barely keep pace with population growth.
Critics worldwide have addressed another pressing concern with BEE policies, namely the perpetuation of a small black elite by the current system without aiding the masses who are most in need. Although BEE professes to promote the "meaningful participation of black people in the economy," it actually fosters a political cronyism that benefits only an elite few. For instance, in 2003, 60 percent of empowerment deals amounting to 25.3 billion South African rand went to the companies of only two black businessmen. Accordingly, wealthy blacks are enriched at the expense of millions living in poverty. In the case of government employment, where racial preferences commonly outweigh skill-based qualifications, black employees certainly benefit, but the masses of poor black citizens who rely on basic government services such as health care and water face exorbitant costs. Thus, while racial preference allows black contractors to charge much higher prices without the risk of losing business, the burden of excessive cost results in fewer public services for those who need them most. …