[Music] well the pressure is building on black economic empowerment uh it is being exposed as a mirage which was supposed to have supported and helped uh those who were affected um particularly economically by the apartate regime in fact it's done the opposite it's made lives worse for the majority of South Africa's population and only enriched a few we are going to continue along this theme uh today with uh Dr anthia Jeffrey who's got a some some interesting insights it's called the economic empowerment for disadvantage the Eed as a alternative to be a story that's been
on buz news that she wrote which has been extremely well read we're going to pick up on it in a moment antha thank you for joining us uh the whole be story is now suddenly coming into the spotlight I guess helped along a little by although love him or ha him uh the chaotic Donald Trump has certainly Shone a spotlight onto what the anc's been up to in the last 30 years something that it seemed to have been given a free pass on from most people around the world including the United States I think that's
right and and I think that for very many years the narrative was always that there might be the odd problem with be but really the solution was just to to ratchet up the rules and then to implement it more strongly and then it would be even more successful and I I think there has been a reluctance until now to acknowledge the extent to which it's widened inequality as you were saying that it helps perhaps 10 15% of the back population the people who are the best skilled the most credentialed often the best politically connected and
it's harmed the remaining 85% and I think that realization is really beginning to hit home uh there have always been some acknowledgements of that interestingly some of them coming from very senior figures within thec with praven Gordon back in 2010 for example saying that be hadn't worked hadn't made South Africa affir Society had helped the few rather than the many uh and the sacp in 2017 saying that it was the main reason for our Rising guini coefficient because it had so contributed to intra inequality again same picture it's the small group of the top that
benefit the great majority who don't and then the gap between the two of them widens so we now do fortunately I think have a widening recognition that be is not working perhaps it's also uh triggered by the fact that we have yet another year of of meager economic growth at 0.6% of GDP against population grow of 1.3% of GDP so obviously the entire population is is getting poorer year by year on a per capita basis we need to break the mold uh and since be is something that deters investment hampers growth worsens unemployment it rarely
deserves critical scrutiny and we believe the development of an alternative unfortunately it also is benefiting the few who are are incredibly powerful within the decisions or or shaping political decisions how might their minds be changed are they going to have to be bought off by some other policy to to actually give up these wonderful gains and you just think of various sectors of the population who have benefited hugely from be um many of them talking to Gabriel CR recently uh he unpacked your colleague at at the IR he unpacked the cost of be being around
150 billion a year rans a year uh as that's just an extraordinary layer on top of everything else and we all know about this but those who getting the 150 billion are certainly not going to give it up without a fight yes that's right and in the 150 billion he told spart is only in the in the public procurement context and be obviously has many costs beyond that but certainly there are entrenched interests and people will fight to retain the current system because it does work for the few uh and it has made uh a
relatively small number of people extremely wealthy and also had probably given them a sense of power over business so nobody wants to give up that but if we can just make the voice of the ordinary people emerge more strongly perhaps that can be a powerful countervailing Factor because the Institute has been polling black South Africa on be and on some aspects of of our Eed proposal for a number of years um and with the Eed idea we particularly want to do something that will reach down to the Grassroots that will help the most disadvantaged get
ahead by equipping them with better education better Healthcare better housing and international experience shows that you can do that through TX funded vouches so we've been asking people what do they think about vouches and in our last ping in 2024 week there were 92% of black respondents who rarely liked the idea of of schooling VES 83% supported healthc care VES they wanted to have them 80% were in favor of of housing VES and when we asked people if they thought the VES would be more effective than be and helping them to get ahead 81% of
black respondents said yes uh and this is consistent picture that goes back to 2016 when we first began asking this question so if if if the uh political parties could tap into what ordinary South Africans think and want and then provide a very clear message that this is what they would introduce if given the power to rule then perhaps this would help to break the loger uh where people know that the ANC government is not working for them but they they haven't switched ready considerably two Alternatives yet not enough we saw a big shift of
course in the 2024 election but we need a bigger shift still those VES have they been used elsewhere to good effect yes there have been uh India has a very big vulture program uh at Primary School level which is run in all private schools um but there VES also in many other countries um and the idea was really a simple one uh initially the I think the whole assumption was that government must not only fund education which of course makes sense but must also deliver it and when you have state delivery it turns to become
top down centralized bureaucratic nobody RAR gets good service from it and the bureaucrats Who Run It are not affected if the schooling system is not good if anything they like it to be more bureaucrats and more money to solve the problem next year so somebody called James Tuli who I think is quite well known he's now the vice Chancellor of the University of Buckingham has been studying this problem and the fact that in developing countries All Around the World in India in Africa particularly parents have been voting with their children's feet by taking them out
of free but dysfunctional State schools and sending them to private schools very low cost schools here in South Africa we have such a high level of unemployment that it ready is difficult to imagine that many people would be able to afford even lower cost private schools but if they are equipped with tax maned vas then this becomes viable and the the great Merit of the V system as Professor Tuli has pointed out is that it gives everybody an incentive to compete so the idea is that uh you work out how much of the education budget
is going to lwi income households at the moment and being badly spent by bureaucrats and instead you divide it that amount among the lwi income households um and you transfer that amount to households for use only for Education as VES and then parents can choose what school they would like their children to go to and the school uses the vaer money to pay all their operating expenses including teacher salaries and that means that they have a powerful incentive to make sure that they are attracting more pupils which means that they must increase their performance and
we have so many public schools at the moment which are already dysfunctional which are not doing well and our failing Public Schools would now receive a reason an incentive to up their performance whereas the fact that there also now many people with fures there's effective demand as it were in the economy would mean that many other businesses would also be key to start meeting this demand and so you would have an increasing pool of schools that are competing for the VES of of parents uh who have a real choice and uh who know that the
schools that they are sending their children to have incentives to compete with one another have incentives to innovate to push quality Up and Hold prices down and it's worked well in a number of countries where the children at private schools some of them V fed some of them with parents paying generally do better than the public schools and that's why parents move away from the free but dysfunctional public schools to ones that work better and we can Aid that process and rarely help the truly disadvantaged by taking the money away from the bureaucrats and giving
it to the families it's an irresistable idea it makes a lot of sense it's very logical but so too is the argument against be and yet you get some very smart people um like Professor uh pi defos and um you you quoted in your article another professor as well uh who both christe Fest who both said that the whole situation or the whole argument against be is a white right agenda we're hearing a lot of that lately seems whenever one puts a logical suggestion forward you become a white supremacist or a right-winger or something along
that I want to unpack that in a moment moment but just perhaps give us some background of the irr you personally uh have studied at vits at Cambridge University London University you're a lawyer by training and the institute for race relations just remind people what the agenda is well perhaps I should rind Fe that the Institute began its life in 1929 which is almost 100 years ago and and we were formed to oppose racial discrimination to promote racial Goodwill and non-racial M um and we became I suppose particular experts on a part8 because year after
year from 1946 onwards we put out a a yearbook as it were a survey of race rations in South Africa which tracked what was being done in terms of racial laws and what the negative outcome of those racial laws was and we pushed for a non-racial democracy so come 1994 uh people who remember our former CEO the lake John Ken bman may recall that what he said that South Africa most needs now is an open and non-racial democracy not a new form of racial engineering and we were always concerned from the time that the first
employment Equity bill came out in 1997 that this would take us down the path of effectively requiring race classification again because if you're going to treat people differently on the basis of their race you must be able to divide them up into racial groups uh and though we've never put in place the population registration that we're effectively requiring some form of of uh supposedly voluntary racial discrimination with people choosing for them not racial discrimin racial classification with people choosing for themselves what race group they belong to uh but there isn't a box to say well
I'm a South African um and uh of course they're helping people even within thec who said the time must come when we must put away this racial box sticking and just say we're all South Africans we believe that time is absolutely no that more racial classification and the use of race as a proxy for disadvantage simply does allow the the relatively Black Elite to take advantage of the preferences to the detriment of the really poor and uh in a way that as as we've been talking about hubbles growth and means that the unemployment keeps Rising
and and everybody in the country keeps getting poor uh so you could argue I suppose that um we've tried for 30 years to see if if be can work and clearly it hasn't except for a small group who have become rich and powerful and now have an in interest in preserving it but we need to look to the truly poor the most disadvantage and find a better mechanism that will help them and get the economy growing and thriving I I recall I'm old enough to have been reporting at the time that be was brought in
and some of these sweetheart deals that made people like s Raposa and u i remember very clearly Tok seali getting a huge chunk of options in Absa which was worth over a billion Rand it was a gift but nobody really understood how share options worked back then in it was around '97 and so uh it didn't even though you were you were asking is this the right way to do it uh it didn't resonate with business business came back with the argument that but we do need to bring people into the tent and it will
be good for ordinary South Africans or the majority of South Africans if they can see people who look like me becoming very wealthy that argument has is still in the eyes of some people uh not least the thec government who want to create 100 black billionaire industrialists it looks like more of the same doubling down on the on the same old policy from where I said yes whereas of course um if you want to have many more black billionaires then what we need primarily is a growing thriving economy uh in in which uh there are
more and more jobs to be had and in which people are also well equipped with skills through the schooling system um the idea that that you can engineer um a a small group uh yeah it can be done but it's being done at the cost of the wider group and of the economy which is being hobbled all the time so it's not a successful model we need to look beyond that um and as I think we argu back in 1997 if you get the if you have this open Democratic and thriving economy you will find
upward Mobility happening it's growth that will lift all boats and you need to lift all of them not just the relatively few at the top so why hasn't it happened what be brutally honest with us what is the reason why Common Sense was never prevailing over the be philosophy which as you say has worsened South Africa's already terrible Genie coefficient which is the the difference between rich and poor I I think really it's um people have been perhaps unaware of the underlying ideology behind all the anc's interventions including the E which is the national Democratic
Revolution intended R to Hubble business and to take us closer to the point where the state has huge control over the economy and the aim is ready to dellink people from the capitalist economy and make them entirely dependent on the state hence now the emphasis for example on public employment let the state uh employ people and not just in the rather limited way they P now but on a bigger basis and of course it's not the role of the government to create jobs and they're not good at doing it either what we need is a
competitive Innovative thriving private sector that will do a much better job especially than ourc government can do but there's been a tendency to ignore this underlying ideology in the media among other commentators and and um certainly when Isa spoke to business in in 1995 96 about how they saw affirmative action all the the sort of captains of industry that I spoke to said we're absolutely in favor of of of providing a leer to people who've been disadvantaged in the past we want to do everything possible in our particular companies to make it easier for people
to rise into positions of power and influence um but they said the idea of racial quote is is is is just something that's going to be very damaging and we've gone the path of racial quots the moment you introduce them they become very different difficult for business to comply with because we haven't got the skills pull right um and then uh I think big business becomes increasingly wary of speaking up uh because the law is so hard to comply with uh that they don't perhaps want to put their heads about the parish pet and attract
negative attention it becomes a factor in why businesses go along to get along H and at the same time the media um really has been I think given has abdicated some of its responsibility I would say to report accurately on uh what be has achieved and the judges I would say have also failed to do a proper job and maybe this is worth going back to to what the Constitutional Court said back in 2004 in a case which concerned R A of element of affirmative action um and uh we have in section n of the
Constitution a very clear commitment to equality before the law a Prohibition on unfair racial discrimination a clause in 95 that says any discrimination on race is unfair unless the contrary is shown and that was used in the case to say that it's not fair and and the earnest no lies in the state to prove that it is fair that was rejected by di in the Constitutional court on the basis that a remedial action couldn't be presumed to be unfair but he said it would have to satisfy three tests first it would have to Target the
disadvantage and of course we know that be after 30 years is really targeting the the the Black Elite not the truly disadvantage secondly it would have to help them advance and we can see that the great majority are hurt by be because the inefficiency in the state is so declined because so much money as Gabriel says has been wasted in public procurement um and because we're not attracting the investment because the private sector is also hobbled by be and that means less growth Less jobs more poverty so the second test is not being forfill and
then the third one is that it must achieve equality but we're not achieving equ equality we're pushing up inequality as the sacp acknowledged in 2017 because of the inter black inequality in particular we have a higher guine coefficient n at 63 in 2022 compared to 59 in 1994 none of those tests are being made and it all therefore to be easy to get the media to express concern that these legal tests for constitutionality have not been met easy also for the court to start rowing back from there what is seen implent support for circal transformation
and saying we need to look beyond the words to what the outcomes have been it's all very well to have an intent to provide redress but if in practice you are hindering the poorest from getting ahead then we need to think again look back to what our constitution says and make sure that what we're doing is ready in keeping with it and what the Institute is promoting by E would be in keeping with the Constitution and would be effective uh in growing the economy and in helping the most disadvantaged so what we're really appealing for
I suppose is a sea change there has been as you said at the beginning a greater awareness of the problems with ve um some indication from Steven cus a little while ago but we don't know what else would replace it uh and now we really need to focus on what else could replace it and the Eed idea is one such idea uh we believe that it would be that would would meet the need in a very comprehensive way um of course it could be refined we're not saying this is the ultimate idea but it's a
it's a I hope a good starting point and what we rarely need is to recognize failure be need for an alternative look at what the Constitution requires as set up um and move forward unintended consequences and it requires second level thinking two of my favorite areas or my favorite thoughts and one of my favorite people Dr anthy Jeffrey thank you for uh perhaps lifting some scales on some eyes uh anthia is the head of policy research at The Institute for race relations I'm Alec HW from bus news.com [Music]
