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South Africa’s Black Economic Empowerment Program has Failed

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(NNPA) Oh, it was a great moment when Black South Africans freed themselves from the yolk of Apartheid being administered by the White Afrikaners. However, we must remember that civil rights and political clout without economic empowerment will become borrowed events. The leaders of South Africa have recognized this and are trying to formally do something about it. So far there have been little results. What they have implemented is the Black Economic Empowerment Program.

According to Wikipedia, “ Black Economic Empowerment (BEE) is a program launched by the South African government to redress the inequalities of Apartheid by giving previously disadvantaged groups (Black Africans, Coloreds, Indians and Chinese – declared as Black in June 2008 – who are South African citizens) economic opportunities previously not available to them. It includes measures such as Employment Equity, skills development, ownership, management, socioeconomic development, and preferential procurement. After the end of Apartheid in 1994 and with the advent of majority rule, control of big business in both the public and private sectors still rested in the hands of white individuals. According to Statistics South Africa, Whites comprise just under 10% of the population, meaning that most of the country’s economy was controlled by a very small minority. BEE is intended to transform the economy to be representative of the demographic make-up of the country.”

It sounds like a noble cause but there is just one thing. It is not working. It is poorly implemented and is wrought with corruption, fraud, and misrepresentation. A few colored and Asians are getting the lion’s share of the business while the Black population continues to be left out of the economic infrastructure. Among the 295 companies listed on the Johannesburg Stock Exchange, Blacks account for just 4% of chief executive officers, 2% of chief financial officers and 15% of other senior posts (The Economist). Entrepreneurship is basically void and a start in this area is desperately needed. Even President Jacob Zuma seems to agree. “Instead of redistributing wealth and positions to the Black majority, they have resulted mainly in a few individuals benefiting a lot,” he says, “while leaving the leadership of most big companies in White hands. The Black masses, the intended beneficiaries, have hardly gained.” Well, Mr. President, what are you going to do about it?

South Africa must turn this opportunity into a success. Affirmative Action is written into its constitution so there can be no legal challenges of a direct and aggressive program. That being the case they should look at models that have worked. There has been no more successful model than our Small Business Administration’s 8(a) program. This business development program has made more Black millionaires than all of the other economic empowerment programs combined. South Africa needs to form an agency such as the Small Business Administration and begin working on a program that will work.

In addition to business development there should be a pool of capital set aside for business start up and expansions. Capital is the “life blood” of any business and to try and implement an economic empowerment program without ready reserves becomes an impossible task by itself.

Here again, the SBA lending programs can be emulated or even improved with less paper work.

The South African government must set aside a pool of contracts for participants in the program to compete for. There can be some subcontracting also but prime contracting is the key to business growth. Develop large Black owned businesses and demand that they subcontract to other Black owned firms.

Black should be Black. They must not aggregate all ethnic groups under the label of Black. They should separate and monitor each group. You can’t tell me that the colored, Indians, and Chinese endured Apartheid in an equal manner to Blacks. The typical executive in South Africa makes $80,000 per year. A typical Black makes $800 per year. This disparity is intolerable and must be dealt with immediately. Entrepreneurship and business development are the direct ways to correcting the situation.

Collectively, South Africa is a financially strong nation. It is the only first world nation on the continent of Africa. The problem is the distribution of wealth. Some of the richest families in the world reside in South Africa while the poverty levels rival many third world nations. The crime and violence are rampant and soon, if they don’t address it, it will evolve into rebellion and than full scale revolution. The time for change is immediate and the potential for greatness is obviously attainable, if the leaders would become more accountable and take their people to greatness. There is no other nation on earth with such potential for great change. God bless South Africa.

Mr. Alford is the co-founder, President/CEO of the National Black Chamber of Commerce®. Website: www.nationalbcc.org. Email: halford@nationalbcc.org.

 

National Urban League Announces Blueprint for Quality Job Creation

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“Freedom has always been an expensive thing. History is a fit testimony to the fact that freedom is rarely gained without sacrifice and self-denial.” Dr. Martin Luther King, Jr.

Last Monday, the nation celebrated what would have been the 82nd birthday of the 20th century’s great drum major for justice, Dr; Martin Luther King. Dr. King understood that economic justice was the most crucial question confronting Black people, as well as poor and middle class people generally throughout America. In fact, at his death, he was on the brink of launching a nationwide campaign for jobs and income.

As, America enters the second decade of a new millennium, and the National Urban League begins its second century, our organization is introducing a new blueprint for achieving that goal.

The nation remains mired in a great recession. The National Urban League has seen the impact of this crisis first-hand. Our more than 100 local affiliates across the country are economic first-responders in the ongoing effort to help ease the burden of those most profoundly affected by this recession, serving some 2.1 million citizens in 2010 alone.

During the past two years, much of the work of the Obama Administration and the 111th Congress has been nothing short of heroic. From the American Recovery and Reinvestment Act, to the passage of the Dodd-Frank Consumer Protection Act, the Affordable Healthcare Act, and the extension of middle class tax relief and unemployment benefits, the Administration has taken historic actions to restore America’s economic vitality.

But, the persistent nature of the recession has brought little relief to families either out of work or stretching part-time wages to meet full-time financial commitments. Record numbers of Americans were forced into foreclosure in 2010, and many urban families in communities already long beset by economic stagnation are enduring unemployment rates as high as 20 percent.

That is why the National Urban League is proposing a new 12-point Blueprint for Quality Job Creation. Our plan offers a dozen dynamic and imaginative measures to both rescue those most profoundly affected by the ongoing economic emergency, while also remedying many of the underlying causes behind the recession’s inordinate and seemingly-amplified impact on the communities we serve:

1. Restore the Summer Youth Jobs Program as a Stand-alone Program Employing five million Teens in the Summer 2011.
2. Create 100 Urban Jobs Academies to Implement an Expansion of the Urban Youth Empowerment Program.
3. Develop a Dynamic National Public-Private Jobs Initiative to Create Jobs and Train Urban Residents and Stimulate Economic Growth in the areas of Technology and Broadband, Health Care, Manufacturing, Transportation and Public Infrastructure and Clean Energy.
4. Boost Minority Participation in Information and Communication Technology (ICT) Industries.
5. Reform, Revise, and Reauthorize Workforce Investment Act to prepare and retrain workers for 21st century jobs.
6. Create Green Empowerment Zones.
7. Expand Small Business Lending.
8. Initiate Tax Reform that reduces rates across the board and eliminates tax loopholes.
9. Establish and Promote Multilateral International Trade Policies that expand the market for American goods and services.
10. Enact the Urban Jobs Act (H.R. 5708).
11. Expand the hiring of housing counselors nationwide.
12. Fund Direct Job Creation in cities and states.

We urge the Congress and the White House to adopt these measures without delay.

Marc H. Morial is President and CEO of the National Urban League.

Something is Seriously Wrong with this Picture

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By Kenneth M. Young
Riverside County Superintendent of Schools

On Monday, Governor Brown released his much anticipated 2011-12 state budget proposal. The proposal, which includes closing a roughly $6 billion hole in the current year budget, contains a combination of cuts, extensions of existing taxes set to expire soon, and a complex restructuring plan he hopes will substantially reduce California’s estimated $19 billion state budget deficit in 2011-2012.

However, the proposal would require bipartisan support from California’s deeply divided legislature and success at the polls before it could become a reality—certainly a challenging feat given the state’s economic and political environment.

In unveiling his proposal, the governor noted that “public education has borne a disproportionate share of budget cuts in recent years”. After roughly $18 billion in cuts to education over the past three years this statement seemed to indicate our K-12 public schools might be spared from further loss of funding. But, the “devil is in the details” as they say, and since schools make up roughly 40% of the state budget, the implications of the governor’s comments are tempered by reality. His proposed budget includes over $2 billion in additional funding delays (this comes on top of the roughly $8 billion in school funding that is already being postponed) and requires schools to adopt their budgets by June 30th with complete uncertainty over a highly risky ballot measure. In the unlikely event the measure makes it to the polls, and then in the likely event the voters reject it, further cuts to schools would most likely range between $330 to $615 per student without suspending Proposition 98 — depending where in the overall state budget the governor and legislature ultimately agree they can legally and politically make the cuts needed to adopt a balanced budget.

California’s overall economy, and especially that of the Inland Empire, continues to languish in a deep recession. Since California’s schools are largely funded out of the state budget, the negative impact of the economy has had a disproportionate effect on the financial stability and educational ability of our public school system.

By law, our schools have become overly dependent on funding from a state budget that is subject to increasing demands from diverse sectors of society, extremes in economic cycles and polarized political positions. This is no way to run a modern state or a high-quality education system. We must remove the restraints on local cities and communities that currently prevent them from choosing to make public education among their top priorities. They can legally do so when it comes to building their local schools, but they cannot do so when it comes to the operation of those schools they helped build. Something is seriously wrong with this picture.

Recent Shooting in Redlands

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By Renea Wickman –

As a parent I cannot think of anything worse than the loss of a child or loved one, murdered. Equally, I cannot imagine my child or loved one murdering another child or any human being.

No parent wishes their child to be murdered or to be a murderer.

The indescribable pain of parents, families and friends that have lost a loved one at the hands of a youth, criminal, racist or the criminally insane can never be mended or ever made whole, the pain never goes away. There is nothing that will ever bring their loved one back, and that is the devastating reality.

Semi-automatic and automatic assault weapons, hand grenades, ammunition that penetrates bulletproof vests and weapons used by peace officers, the United States Armed Forces, including the National Guard, that are available to youth, criminals, racists and the criminally insane, will always result in senseless murders like those that very recently happened here in Redlands and Arizona.

I believe in our great Constitution and the second amendment and will protect it with my own life. However, I do not believe our forefathers intended or desired that our civilized society include youth, criminals, racists and the criminally insane the right to bear arms to the same degree of availability as reasonable civilized law abiding and productive citizens, any more than we would allow our underage youth the availability and right to purchase and drink alcohol and blind individuals the privilege of a drivers license.

Moreover, in part of his response to the Redlands shootings, our own Police Chief Bueermann cited that “racial tensions” are running high.

Yet, our fine city has a Human Relations Commission whose mission is “… promoting goodwill and better relations among all people.”

Does this commission plan to involve itself in seeking solutions?

It’s time that we faced the facts that the entire City of Redlands, its leaders, all Redlands citizens need to come together and work with our youth – all of them. We have the talent and leadership right here in our city that can tackle both the combined problems of gang violence and racism.

Oppressive Taxation

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(NNPA) Blacks in America pay their taxes without protest nor demands for equal representation. We do this to a serious fault. We get nothing in exchange for giving our few and precious capital resources. It is, in effect, colonialism. Our federal and local governments tax us in a manner that is supposed to provide services and fair trade. However, the many billions of dollars spent by our federal and local governments are denied to our businesses. Our unemployment doubles or triples that of Whites because of this. Our businesses cannot grow at a representative rate and, thus, we cannot create jobs for our population. Our quality of life does not have a chance under such a system. We must start demanding more and refusing to go along with this economic exploitation.

The Illinois Black Chamber of Commerce has done an analysis of how this system works. The State of Illinois is about to raise its state income tax from 3 percent to 5.25 percent. This will have a greater impact on the exploitive system against a certain segment of the population – us. The following is their take on this and the National Black Chamber of Commerce endorses their analysis.

The effect of an Illinois Income Tax increase on the Black Community Illinois is considering increasing the Income Tax rate from 3 percent to 5.25 percent. This document is an attempt to estimate the effect on this increase on the Illinois Black Economy.

Assumptions
1. Governor’s Estimated 2011 Illinois State Income Tax Receipts: $8.6B
2. Total Illinois Households – 4.8M
3. Total Black Households – 676,000 or 14 percent
4. Total Average Income per Household - $56,000
5. Average Income per Black Household - $35,000
6. Yearly State Income Taxes paid by Black workers @ 3 percent – $774-$860M or 9-10 percent
7. Yearly State Income Taxes paid by Black workers @ 5.25% – $1.35B-$1.50B

Economic Effects of Increased Taxes on the Black Community
If the Illinois State Income Tax rate increases from 3 percent to 5.25 percent, the Black community would pay an additional $580M to $645M in state taxes every year. This means the Black community that is already financially stressed would lose approximately $600M in purchasing power every year or $2.4B in four years.

What are Blacks getting for this investment?
The majority of this $2.4B is going to pay other people’s bills. Even though Blacks contribute approximately 10 percent of State Incomes Taxes, a larger percentage of sales taxes and a much larger percentage of lottery purchases, the State of Illinois does very little business with Blacks likely less than 1 percent of spend.

Conclusion
Martin Luther King once said that “Of the good things in life the Negro has half; of the bad things he has a double share”. That still holds true today for our people.

If jobs come from small business and the State and others are not doing business with our businesses, where are our jobs supposed to come from? Unless the State starts to do business with Blacks in proportion to our population this is a bad financial deal for Blacks. The Illinois Black Chamber of Commerce says that there should be NO TAXATION WITHOUT PARTICIPATION. We urge our Representatives to look at this deal carefully. Taking $2.4B from working Blacks to subsidize others is not going to help us rather it will damage an already fragile community.

Yes, the state legislature should vote against this tax increase unless the state will set aside the $200 million in procurements for Black owned businesses. That is the only way to make this taxation representative of the Black population of Illinois. This is just Illinois. We should do such an analysis for each and every state in the nation. Likewise, we need to do it for the federal government as well. Why are our economic indicators the lowest of all ethnic groups in the nation? A big contributor to that fact is right here. Our levels of government are economically sucking on us like the British did the 13 colonies – that led to a revolution. Let’s correct this so we don’t have to do anything drastic. The change must come or we will continue to just lay in the abyss.

Your legislative Black caucus should start understanding this and hopefully, one day, our Congressional Black Caucus will have a clue about this situation and start progressive action. Kudos go to the Illinois Black Chamber for this analysis. Each Black chamber should do such an analysis and share it throughout their respective state. The time for ECONOMIC EQUITY has come!

Mr. Alford is the co-founder, President and CEO of the National Black Chamber of Commerce. Website: www.nationalbcc.org. halford@nationalbcc.org. www.twitter.com/nationalbcc www.nbccbids.com

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