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Trickle down redress has not worked

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DA proposes a bottom-up approach

Dear MyPE

Today the Democratic Alliance (DA) released the draft Economic Justice Policy, the second document to be released for discussion ahead of the policy conference to be held on the 4th and 5th of April.

The draft Economic Justice policy is a response to the increasing economic exclusion experienced by the majority of South Africans. Economic exclusion in South Africa is rooted in a past of colonial and apartheid oppression, but years of poor governance and corruption have stifled our ability to overcome that past.

Specifically, 55% of the country survives on less than R992 a month; 29% of working age South Africans are unemployed, 38.5% if you include those who are discouraged and no longer looking for work.

In addition the effects of the migrant labour system and spatial dislocation disrupted the structure of many families and can still be felt today – according to the 2019 General Household Survey 2 out of 3 children do not live with both parents, an important contributing factor is the location of work opportunities in economic centres where many cannot afford to live with their family.

The prospects of the near future do not look promising judging by the outcomes of the education system. In 2017, a total of 1 052 080 learners were enrolled in grade 10, yet only 409 906 learners eventually passed matric last year. This means only 38.9% of the grade 10 learner cohort actually wrote and passed matric two years later.

These are the people and circumstances which redress policy should speak to. However, BEE focuses on the wealthy, politically connected, or tenderpreneurs.

BEE embodies trickle down redress. The idea that transferring assets, positions, and contracts from one elite to another would result in broad-based prosperity. Trickle down redress does not work. And we propose a bottom-up approach.

We need to focus on the drivers of inequality of opportunity which affect the majority of South Africans, and the private sector can play an important role in helping to move towards a more economically just society.

We propose to use the UN Sustainable Development Goals as the objectives we wish the corporate sector to help us to achieve. The SDGs have a number of advantages to the BEE scorecard.

These advantages include:

  • Targeting the vulnerable and excluded as opposed to elites;
  • Companies are able to identify the goals which they are best fit to contribute towards;
  • The SDGs are a global framework enjoying wide stakeholder support. Whereas BEE has been criticized by the EU Chamber of Commerce in SA as the top legislative challenge to doing business in SA;
  • This approach has the potential to drive company profitability. There are growing number of investors looking for SDG commitments.
  • This policy follows an approach which is based on need and disadvantage as opposed to race. Ones race does not change regardless of how empowered you become. BEE has enabled people to benefit on the basis of their race who do not need assistance at the expense of those who do.

This policy will ensure that the disadvantaged benefit from redress.

Regards

Gwen Ngwenya
DA Head of Policy

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