Shooting at straw men will not transform tourism - Polity

David Christianson

Tourism minister Mmamoloko Kubayi-Ngubane may be sincere in her belief that those criticising her decision to disburse coronavirus relief funds only to B-BBEE-compliant enterprises are motivated by a racist agenda.

But her response to her critics is not only confused but fails to address the shortcomings of the B-BBEE paradigm. Kubayi-Ngubane sets up and shoots down a straw man while failing to address the core issues.

Kubayi-Ngubane’s department has a R200-million Tourism Relief Fund to provide one-off grants to small, micro and medium-sized tourism enterprises in order to ensure they survive the coronavirus shutdown. She has made it clear that this relief will be administered in line with the tourism B-BBEE codes of good practice. This effectively excludes small ‘white-owned’ firms in the industry who have never felt compelled either by law (there are exemptions below a certain level) or by the need for government and corporate contracts to have their B-BBEE status certified.

Those who have criticised the minister make two important points.

Some point out that the extraordinary circumstances wrought by the pandemic are too serious for ‘business as usual’. Ordinarily, most opposition to B-BBEE is muted because those excluded can find a way to earn a living outside of its embrace. But with the coronavirus, Kubayi-Ngubane’s critics argue, the very survival of enterprises is at risk. Under such circumstances, insisting that state assistance be race-coded is unconscionable.

Other critics worry about economic recovery once the immediate health crisis has passed. They point out that B-BBEE is a constraint on economic performance. Moreover, the policy in its present form is an obstacle to economic transformation. It divides a poorly-performing group of companies, dependent on state patronage, from a competitive group, a division which serves only to reinforce and deepen social divisions.

Kubayi-Ngubane prefers not to confront either of these arguments. She believes she has unmasked her critics as a corps of racist recidivists and that their views are ‘but an expression of opposition to the emergence of black business in the economy’.

Were it not so dangerous, Kubayi-Ngubane’s accusation would be laughable. The position of the Institute of Race Relations, which she singles out as ‘most revealing’, is that what South Africa needs is a thriving enterprise sector, irrespective of business-owners’ pigmentation. But because the greatest sin of apartheid was to keep black people out of the market, except as providers of labour, the success of entrepreneurs from this demographic is especially worthy of celebration.

Kubayi-Ngubane has confused B-BBEE policy with a growth strategy. This is simply an assertion of an ideological position which has unfortunately become deeply entrenched in state discourse. If B-BBEE were indeed a growth strategy, the past five years, which have seen South Africans become poorer, on average, would condemn it as hopelessly ineffective. But it is not a growth strategy and has never been. This is why it is not an input into the National Treasury’s growth models. Nor is it a (viable) social policy, as growing inequality and rising need in society shows.

B-BBEE has to be seen for what it is: A process of creating a new black elite through state patronage. Some of her peers have been more honest about this than the Minister of Tourism. At the Mining Indaba last October, Mineral Resources and Energy minister Gwede Mantashe said that B-BBEE was widely misunderstood and had to be seen as nothing more than a programme for ‘creating black capitalists’.

Yet Kubayi-Ngubane insists in her reponse that the purpose of B-BBEE is ‘to create an inclusive business sector that adds to the growth of the economy’. This tired old formula is offensive not least for its detachment from reality. The awkward truth is that B-BBEE is neither inclusive nor growth-generating. To anyone concerned about the prospects for economic growth, post-coronavirus, the truth is obvious. It must go. The minister could make a start by refraining from racialising relief efforts in the face of a pandemic.

Written by David Christianson, commissioned by the Institute of Race Relations to write this article.

https://www.polity.org.za/article/shooting-at-straw-men-will-not-transform-tourism-2020-04-23