RADICAL ECONOMIC FREEDOM CHARTER FOR SOUTH AFRICA MOHAMED ADAM Social Justice Movement Pretoria South Africa
Radical Economic Freedom Charter for South Africa Copyright © 2017 by Social Justice Movement of South Africa.
CONTENTS
PART I. ECONOMIC FREEDOM CHARTER 1.
Radical Economic Transformation for South Africa
3
2.
Timeframes for Socio-Economic Transformation
5
3. Inclusive Ownership
7
4.
Funding for Agriculture, Social Housing and Small Businesses
10
5.
Diversity of Ownership in Strategic Industries
12
6.
Funding of Education up to Tertiary Level
13
7. Basic Income Grant
14
8.
Progressive Taxation and Reparations Wealth Tax
15
9.
Procurement Policy
17
10.
Reparations for Apartheid and Colonialism
18
11. Conclusion
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12. Meaningful Change in the lives of the People and Future Generations
22
PART I
ECONOMIC FREEDOM CHARTER
1. RADICAL ECONOMIC TRANSFORMATION FOR SOUTH AFRICA
President Jacob Zuma to create a Ministry of Radical Economic Transformation ( “RET� ) to ensure that a comprehensive policy and timeframes for implementation is in place as soon as possible but no later than the ANC June 2017 conference to adopt the ANC Strategy and Tactics documents. The Minister of RET shall ensure that there are Radical Targets set in various sectors as contained in this proposal. The Minister of RET shall appoint a panel of experts and advisors who will ensure that all elements of Neoliberal Economic Policy are removed from all existing ANC Policy documents and that Pro-Poor
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Radical Economic Freedom Charter for South Africa
Progressive Policies ( “P4� ) are adopted and become the hallmark of achieving Radical Socio-Economic Transformation. This is a very important point. It is my view that this is the single most important aspect of existing government policy which needs to be changed. Sure there are challenges in policy implementation but if we address this first foundational aspect then we will have set the foundation for success later.
2. TIMEFRAMES FOR SOCIO-ECONOMIC TRANSFORMATION
The Advisors and Experts on the Ministry of RET Panel should be selected based on their expertise and ability to deliver. Should any of them not perform then their mandate to be terminated. There should be performance based contracts in place for the senior officials and consultants to be appointed. They should be incentivised on achieving the targets set. They should be paid according to performance achieved in reaching agreed upon targets in the following areas ( and others to be advised by the Ministry of RET from time to time ) Number of People helped out of Poverty in every
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Radical Economic Freedom Charter for South Africa
month and quarter. We propose a 10 year time frame to eliminate poverty. This is not Radical. This means that we need to help 250 000 persons per month to be lifted out of poverty. That is 3 million people a year and 30 million people over 10 years. If we started 23 years ago then by now we could halved poverty or better. This would have had an unimaginably positive impact on society. Millions of lives would have been spared suffering and pain and daily humiliation. Gandi says that “Poverty is the worst form of violence� Mandela quote on Poverty Global Goals on Poverty and Inequality Education is the most important weapon against poverty
3. INCLUSIVE OWNERSHIP
The Ministry of RET shall ensure that policy proposals are implemented for Broad Based BEE as defined in this proposal to ensure that Communities and the wider population of HDIs are empowered. In particular we should aim for the following Targets in Black Ownership over a phased period Current Black Ownership Targets in BEE Scorecards is 30%. In actual practice the actual Black Ownership is less than 10% currently. This is completely unacceptable achievement for a 23 year period of time. At the current rate it would take a fifty year period to reach 15% Black Ownership of the JSE and total economic assets. We need a Radical Intervention and stretch Targets to ensure that the process for inclusive ownwership is speeded up radically. We therefore suggest that his is to be increased to 51% for at least 50% of All Companies on the JSE and in the
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Radical Economic Freedom Charter for South Africa
Small and Medium Business Sectors within a period of Three Years in Phase 1. Thereafter 70% in Phase 2 and 90% in Phase 3. Only Companies who are 51% Black Owned and Black Managed and Black Controlled can be regarded as Black Companies. This target will increase by 10% in each phase until we reach 90% Black Ownership as in clause 3.7 below. Phase 1 is the Three year period commencing in 2017. Phase 2 is the Three year period commencing at the end of Phase 1. Phase 3 is the Three year period commencing at the end of Phase 2. Phase 4 is the Three year period commencing at the end of Phase 3. Phase 5 is the Three year period commencing at the end of Phase 4. The Ministry of RET shall ensure that amendments take place to all sector score cards to ensure that ownership targets in the above 3 phases are implemented. To help achieve this goal the following shall apply All new mining licences and any other licences to be only issued to Black Companies ( with 51% Black Ownership in Phase 1 then 60% Phase 2, 70% Phase 3, 80% Phase 4, 90% Phase 5 ). Goverment Policy shall ensure that all legislative and regulatory tools available to government shall be used to ensure that the targets in this proposal are achieved. All new projects or projects for wealth creation opportunities to be allocated as follows: Phase 1 – 80% to Black Companies Phase 2 – 90% to Black Companies
Inclusive Ownership
9
Preference should be given to new Black operators. Once an HDI has benefited by R 5 million in a “BEE” Transaction that person should be deemed to be “empowered” and may not be counted for future BEE Deals. But they shall always qualify as a Black Company for purposes of Procurement. Community Economic Empowerment ( “CEE” ) should become the norm rather than Black Economic Empowerment ( “BEE” ). In summary CEE means that every member of a given community should obtain an equal number of shares in a given local project. Up to 40% of shares to be made available to Communities in the form of a Co-Operative. Similar principles to apply for Provincial or National Projects. A further 30%% of shares can be allocated to the Management and Founders of the Project. The Balance of 30% of shares can be allocated to Banks or investors. PIC and NEF can take up this block of shares.
4. FUNDING FOR AGRICULTURE, SOCIAL HOUSING AND SMALL BUSINESSES
Government should make funding and training to support agriculture. Before widespread dispossession by colonialists took place there were over a million Black farmers who made a good living from farming. We Propose funding of at least R 100 000 per family to be made available per Black family owning a farm or to be allocated land for small scale farming. This funding to be in the form of soft loans. It has been seen that merely returning the land to their former owners will not address the land question. It is
Funding for Agriculture, Social Housing and Small Businesses
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necessary for both the land and means to be provided for productive enterprises to develop. Support for social housing to be substantially improved progressively from current levels. Further, an amount of R 500 000 per HDI family to be provided in the form of soft loans ( subject to business plans being acceptable to ensure success ) to enable families to start a Small Business and to become selfsufficient.
5. DIVERSITY OF OWNERSHIP IN STRATEGIC INDUSTRIES
The following are all strategic industries and Black Ownership and Participation should be increased to over 60% within a five period as indicated below: The Media Sector – 3 Years The Property Sector – 5 Years Healthcare Sector – 5 years Banking Sector – 5 years Mining Sector – 5 years The shareholding in these entities to be allocated to all HDIs on an equal basis as provided for above with a minimum of 40% to be held in accordance with the CEE Model.
6. FUNDING OF EDUCATION UP TO TERTIARY LEVEL
It is an accepted fact that education and skills development is the path towards prosperity and out of poverty both for the individual and for the development of our nation. Funding to be provided up to tertiary level for all those who cannot afford it ( say under R 750 000 per annum household income ) Those families who earn more than R 750 000 should be provided student loans which can be repaid when they qualify.
7. BASIC INCOME GRANT
The Ministry of RET should implement a Basic Income Grant to be earned by all people in South Africa which should be of a level to have a major dent on poverty. We propose a Basic Income Grant ( “BIG� ) of R 500 per person per month. Disabled or ill people to qualify for an additional amount of R 1000 per person per month. In addition as a form of Reparations all HDIs with a family income of less than R 300 000 per annum shall be entitled to a monthly Reparations Basic Income of R 1000 per person per month. People earning more than R 300 000 per annum shall also be entitled to qualify if they can provide a motivation why they need it.
8. PROGRESSIVE TAXATION AND REPARATIONS WEALTH TAX
To fund the various programmes will require additional taxation. This can be in the form of progressive tax rates and or reparations wealth taxes. In many social democracies income taxes are as high as 70% to fund social needs of society We propose that our income tax levels be gradually increased to fund the RET Programmes outlined herein. Corruption All forms of corruption to be monitored and to be eliminated to the extent possible. Note that Colonialism and Apartheid ( “CA” ) is a far greater form of “Theft
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Radical Economic Freedom Charter for South Africa
and Corruption” then all the “corruption” over the past century. CA is many fold worse. Both forms need to be addressed. Urgent Need for Media Transformation However there is clearly a media bias in South Africa which reports corruption by large White owned companies as “Collusion” and which gives extensive disproportionate coverage of Black “Corruption”. This can only be addressed by ensuring that there is transformation of the Media Industry as a matter of priority.
9. PROCUREMENT POLICY
The Ministry of RET should implement the following Procurement Policy: Phase 1 i.e.Year 1 to 3 – 80% of Procurement should be from Black Companies. Phase 2 i.e. Year 4 to 6 – 85% of Procurement should be from Black Companies. Phase 3 i.e. Year 7 to 9 – 90% of Procurement should be from Black Companies. Phase 4 i.e. Year 10 to 12 – 95% of Procurement should be from Black Companies.
10. REPARATIONS FOR APARTHEID AND COLONIALISM
The SJM, its associates and affiliates and other signatories of the Economic Freedom Charter of the SJM hereby call upon the ANC led Government of South Africa to immediately implement measures by the end of June 2017 to ensure that a fair and equitable amount is paid as compensation to the victims of Colonialism and Apartheid. Our reasonable demand for compensation is the sum of R 500 000 ( Five Hundred Thousand ) per person in today’s money terms. The actual true value suffered by HDI’s is substantially higher. This amount will not eliminate the Wealth Inequality Gap caused by Colonialism and Apartheid nor will it alleviate or can
Reparations for Apartheid and Colonialism
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ever compensate us for the death and pain and suffering caused by Colonialism and Apartheid over the centuries but it represents a good gesture to enable the poor to be able rebuild their lives for a better future. We fully understand that this amount is not affordable at this point in time by the South African government but we propose that we should have an open debate and discussion in society at large as to how we can fairly compensate the victims of Apartheid and Colonialism to ensure long lasting peace in South Africa If we had implemented the CEE Model 23 years ago and used that as the basis for 90% of the JSE to be sold to HDI’s on the basis of the CEE Model then we would have created R 13 Trillion in wealth for HDI’s in South Africa. That amount would have been suffcient to have eradicated Poverty and would have had a substantial reduction in Inequality levels. However it is not too late. We missed an opportunity 23 years ago. Lets not miss another opportunity for the next 23 years by failing to act in a decisive manner today. We must ignore the inevitable negative or no media reaction to this proposal as the media clearly does not have the interest of ensuring that there is radical socio-economic transformation as they act in the best interests of their owners best interests. So they have a clear conflict of interest to ensure that policies of radical socio economic transformation get the media coverage that we should expect.
11. CONCLUSION
There is no reason on earth why this approach cannot be successful. My goals may appear optimistic to some and others may say that I have not taken into account time frames for implementation. Actually to address the serious backlog of 350 years of Colonialism and Apartheid we need Radical Targets and Radical Timeframes if we are truly serious about addressing the serious socio-economic challenges facing us as South Africans. In the past 23 years we have seen an increase in inequality and poverty. We have seen the value of the shares in the JSE increase from R 700 Billion in 1994 to over R 14 Trillion in 2017 representing a 20 Fold or 2000% increase for their White shareholders. We were promised that post 1994 that things will get better for Poverty and Inequality. In fact the same minority group has benefited due to neoliberal
Conclusion
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and market based policies while the suffering of the rest of the Black people has continued unabated. This is clearly unacceptable. The solution is to introduce Pro Poor Progressive policies based on this Economic Freedom Charter which will ensure equitable redistribution of wealth and opportunities so that we have a meaningful chance to have broader economic inclusivity over the next 15 to 20 years. Something must be done today. We cannot wait another 23 years. People are restless and are impatient for the promised Radical Economic Transformation as a reality not as Election Rhetoric.
12. MEANINGFUL CHANGE IN THE LIVES OF THE PEOPLE AND FUTURE GENERATIONS
Conclusion and Benefits for the People of South Africa to alleviate Poverty and to ensure Economic Inclusivity and diversity of ownership of economic assets and means of production. If the ANC accepts the principle of establishing a Ministry for RET then it will give enormous credibility and credence to President Jacob Zuma’s Proposal for Radical Economic Transformation I believe that this can reverse the fortune of the ANC
Meaningful Change in the lives of the People and Future Generations
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and make a meaningful change in the lives of people. It will also have a significant impact on Poverty Alleviation and Economic Inequality as this Economic Freedom Charter contains specifics and Radical Targets and Radical Time frames for implementation. We can succeed. Lets make it happen. The first step is to join and the second step is to get others to join. After that it becomes easy and the momentum will carry us to success.
Dr. M. Adam, Signed on 21st March 2017 on Human Rights Day Chairman, Human Rights Foundation and Chairman, Institute for Economic and Social Upliftment and Executive Director of Social Justice Movement of South Africa Follow us on Twitter at: @ourSJM and @Adamitv and on FaceBook at Social Justice Movement of South Africa