Affirmative Action is chemotherapy for our society

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Affirmative Action is about more than getting the numbers right in individual companies. Although this is critical, the real value of Affirmative Action (AA) is that it holds out potential for broad-based black economic empowerment and economic growth.

AA in its simplest form is about the inclusion of the majority of the population, who have been systematically excluded from all meaningful economic activity. This includes access to professional and managerial occupations.

That AA is necessary in South Africa is self evident. We are dealing with a legacy of racial discrimination that has made us a country with one of the highest income differentials in the world. The effect of this is that we also have, on aggregate, one of the poorest productivity rates per capita when compared to other developing countries.

And it is at this level that AA can make a difference. Far from being just a numbers game, the proper implementation of AA, linked to meaningful skills development and career pathing can only have a positive effect on commerce and industry.

This is because a successful AA programme not only develops well-skilled blacks (and other designated groups), but the exposure that they subsequently get (in terms of key responsibilities in the professions and in management) in turn makes it possible for them to move into their own consultancies; start their own businesses or even partner with the company (through joint ventures and so on). A good AA programme is therefore a good vehicle for successful Black Economic Empowerment (BEE).

The recent Standard Bank BEE deal (announced on 15 July 2004) is a case in point. The deal includes the provision of shares to all black managers and future managers. A few years from now these managers will have equity which may motivate them to stay longer in the company (which is a good retention strategy) and those who want to leave will have the necessary capital (when they sell their shares) to start their own businesses. Standard Bank may lose a few people in this way but it will have helped to create wealth for some black managers. In turn, those black managers who end up starting and running successful businesses will go on to create jobs and add value to the economy.

So, through just one company's BEE programme, the entire nation wins. Multiply this by a thousand companies and you have potential for serious economic growth. But it all started with AA, which got the blacks to become managers in Standard Bank in the first place. Now it has moved full circle into creating entrepreneurs and potential "employers". There is no doubt that companies who embark on genuine and sustainable AA programmes are benefiting themselves and the country as a whole.

Viewed in this light, the importance of AA is easier to see. And quite apart from calls for "sunset" clauses, there should be renewed vigour both in the private sector and at government level to ensure that EE continues apace.

Sadly, to date only 6 900 companies have submitted EE Reports. These reports are not audited and the progress that is supposed to have been shown in top management may turn out to be far less, if one eliminates tokenisms and some multiple-reporting (i.e. where the same black directors appear in several company boards, giving the impression of a lot of black directors).

The lack of enforcement of the EE process by the Department of Labour has put AA and EE in the back seat. Companies were more concerned about AA in 1994 (just before the elections) than they are now, ten years later. In 1994 everyone expected government to enforce AA vigorously, as they should, and when the Department of Labour failed to do this, people focussed on other "priorities". The Commission for Employment Equity Reports on EE progress are a testimony to this. In business, what gets measured gets done!

With AA, the consequences of not getting it done are there for South Africa to see. Brazil, for example, spent the past three hundred years denying that they had racial inequalities and pretending that all the races were equal. In fact they even went on to deny that there are still different races in Brazil (after their extensive policies of racial "assimilation" and "racial purification" of African slaves).

This "colour blind" approach did not work and in fact Brazil is busy instating racial quotas for the admission of Afro-Brazilians to universities and so on. So, from one extreme of pretending that everyone is "non-racial" and that race no longer existed, to racial quotas. Little wonder that Brazil vies, with South Africa, for the title of being the country with the highest inequalities in the world.

Let us not make the same mistake. Let us acknowledge the continued existence of racial discrimination, assess its extent and develop plans and programmes to eliminate it. Then we will live in a non-racial society.

There are no short-cuts to achieving this! AA and dealing with race discrimination is the only way to address race discrimination.

Only two decades ago we had signs in every public place in South Africa designating areas for "whites only". These signs were transmitted into job reservation and employment practices. Now, only 20 years later and just ten years after these policies and practices were stopped, we are told that we should stop talking about race and not see the racial reality of South Africa.

But for the millions who are still confined to the townships, who are chased away (and told to go to Mandela) when they look for piece jobs; who are retrenched every year and so on, race is very much a reality.

If race discrimination is the cancer that nearly destroyed this country, then affirmative action is the chemotherapy that will remove it from our society. It is only then that our true potential and our dream of economic prosperity will start to be realised!

Loyiso Mbabane is a Senior Lecturer at the UCT Graduate School of Business where he also runs an executive short course on BEE. This article appeared in the Sowetan on 29 July 2004.

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