LETTER: Business needs to speak up and the ANC must lose its ideological straitjacket

The ANC's ideological dogmatism was on full display in employment & labour minister Thulas Nxesi's laboured defence of the Employment Equity Amendment Bill (“Left to themselves, employers will not bring equity”, September 15).

Twenty years of race-based policy, of precisely the type the bill aims to amplify, have left the SA economy in tatters. Unemployment is at record highs, as are the national debt and the deficit, which rival figures last seen in the dark days of PW Botha.

The evidence is all around us: ANC governance has ruined the state. SAA has stopped flying. Eskom has lost the ability to supply reliable electricity. The ANC can no longer pay its own staff and the traffic department is unable to issue driver's licences.

At the same time, ANC support is crashing. A variety of pollsters have the party polling under 50%. Its own leaders recognise the prospect of defeat.

And yet there is no willingness to introspect or to consider alternatives. The labour minister and his cabinet colleagues are parroting the same tired refrains of why race-based policy is non-negotiable given the country’s apartheid legacy.

But there is an alternative - indeed there are several. Whichever option is chosen, the essential requirement is to align empowerment policy with the interests of investors, employers, taxpayers, working people and the unemployed. The country urgently needs to move away from the current zero-sum approach, where empowerment cannot be conceived of without sacrifices on the part of business and investors.

Taking into account the current polling, the events of the past months in KwaZulu-Natal, and the evidence around state capture showing how race-based empowerment was used as a fig leaf to enable and conceal corruption, it becomes clear that there is a pressing need to ensure that empowerment policy reaches the disadvantaged.

The Institute of Race Relations (IRR) champions an approach that does just that, in line with the institute's central objectives of promoting freedom and prosperity, as it has done since 1929. The IRR's proposal is called economic empowerment for the disadvantaged (EED). It turns the current approach on its head in two respects.

First, it picks candidates not on grounds of race but rather by established disadvantage. Most beneficiaries will therefore be black. But they will be assisted not because they are black, but because they need help to advance, acquire assets and enter the middle classes.

Second, EED does not serve as a tax on investment or require sacrifices. Instead, it rewards firms for the tax they pay, the people they employ, the fixed investment they contribute, and the exports they promote. These are the building blocks of true empowerment and of every successful society.

To date business has not been bold enough to champion such alternatives in public, even though it concedes the merits in private. However, the ANC is completely opposed. For SA to reform, both must change: business needs to speak up, and the ANC must lose its ideological straitjacket. If they don’t, investment, growth and jobs won’t recover. The ANC may lose and business will see itself discredited.

The IRR will continue to push for effective empowerment policies that can help turn the country's fortunes around, while opposing the myopic policies that keep millions shackled in joblessness and poverty.

John Endres
CEO-elect, IRR

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