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Class struggle: South Africa's new, and few, black rich

(Page 2 of 2)



"There have been changes, but it needed a shove," says Lionel October, the deputy director for BEE policy in the ANC government. It is too soon to judge BEE, says Mr. October, since the policy has only been on the books since 2003.

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Large firms such as the mining company Anglo American, the diamond company De Beers, and the massive services industry have mainly had to act on their own initiative to add a few prominent black faces to their otherwise white boards of directors, he says.

"It's not that business did this for ulterior motives, necessarily. It is hard to bring in new people who don't have a track record," says October. "But after a public outcry, when people were seeing the same names, you are starting to get more and more participation."

The program's critics should remember the dramatic circumstances before apartheid, October says, when whites owned 98 percent of South Africa's wealth.

"I think we need to take a step back here, though," he says. "For decades, there was no entrepreneurial class among blacks. It was decimated by the last 40 to 50 years of apartheid. You need to bring in lots of solutions, not just selling ownership of big companies, but also creating opportunities for small black entrepreneurs to be suppliers for big business and for government."

Life under a 'cappuccino' regime

Such calls for patience fall on deaf ears in black-majority townships such as Soweto, where many blacks feel that political freedom has brought them little more than a few changes to the same old white-dominated economy.

Many blacks say they live in a "cappuccino" society, with a lot of black coffee at the bottom, a layer of white foam on top of that, and a sprinkling of cocoa on the very top, for show. Other blacks use BEE as an adjective – he drives a BEE car, wears a BEE suit, lives in a BEE house – almost equivalent to the American term "bling."

Bling is its own motivation, of course, and in the modest store-front consultancy of EmpowermentSA, Mputhi Mputhi gives black entrepreneurs a business plan for how to prepare themselves for the new world of BEE.

"BEE does exist, but unfortunately, it does not exist where it is needed the most," says Mr. Mputhi, a man who is quick to draw a pie-chart to make his point. On a whiteboard behind his desk, there are plans for a new brochure.

"What the private sector has done thus far, is unfortunately maybe a symptom of the free market system .... They only go to the people who have money, and those are people who may not live in the townships," he says. "But there is a lot of black talent out there, and if you see the private sector open up opportunities for them, you're going to see huge numbers of black people move into the middle class."

Free, but still poor

The discourse around the BEE programs also highlights another common postapartheid complaint: That for whites and other races like Asians, who do not qualify for BEE, black empowerment means their own disempowerment.

"Guys get jobs because they are in the right race group, but then they hire someone else like me to actually do the work," says Raj Singh, an ethnic Asian maintenance man at a local hospital in Soweto. "So where's the BEE in that? I'm sorry to sound racist, but that is wrong."

Balfour Makhetha, a shopkeeper in Soweto, says mounting dissatisfaction with ANC programs could foment violence. Mr. Makhetha expanded his small shop after apartheid fell in 1994, but will have to move to a smaller location now that a white-owned shopping mall is moving into his neighborhood. He has tried to take part in BEE programs as a supplier, but has found it impossible.

"It's a good recipe for revolution," he warns. "One day the people will rise. The next revolution is for food. Everywhere around us, the signs are there. The clouds are gathering. We are going to have rain."

Today, Motaung's company, Medupe Distributors, is an 8 million rand (about $1 million) business with six employees. Parked outside her office is a new silver BMW that she and her husband drive to work each day, from the new home they have built in Midrand, a mainly white suburb between Johannesburg and the capital of Pretoria.

She admits that most South Africans are likely to equate BEE with an undeserved handout, but noting the hard work she put into setting up her company, she hopes her fellow black South Africans will be patient.

"Look, [for] a lot of blacks, their lives haven't changed that much" since they gained freedom, says Motaung. But "everybody is reading this the wrong way, like it is reverse apartheid. Compared to other African countries, it is not bad. It may not be the ultimate, but the roots are right."

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