VZCZCXRO1561
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSA #0505/01 0711442
ZNR UUUUU ZZH
R 111442Z MAR 08
FM AMEMBASSY PRETORIA
TO RUEHC/SECSTATE WASHDC 3770
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE

UNCLAS SECTION 01 OF 02 PRETORIA 000505 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON PGOV SF
SUBJECT: SOUTH AFRICA'S BLACK MIDDLE CLASS:  GROWING FAST, 
DISILLUSIONED, IN DEBT 
 
¶1.  (SBU) Summary:  South Africa's black middle class is 
growing rapidly, but definitions of "middle class" vary 
widely and the group may be smaller than many assume.  Middle 
class blacks support the economic policies of Thabo Mbeki and 
have a strong attachment to the ANC.  However, they are not 
active in ANC branches or in community organizations, and 
they tend to be increasingly disillusioned about politicians. 
 They have taken on high levels of debt in order to "catch 
up" with white peers.  Few are entrepreneurs.  Few have 
social contact with white peers outside of the workplace. 
The existence of a healthy black middle class will contribute 
to the long-term stabilization and normalization of South 
Africa.  End Summary 
 
------------------------------- 
Who Are the Black Middle Class? 
------------------------------- 
 
¶2.  (SBU) South Africa's black middle class is growing 
rapidly and supports the economic policies of Thabo Mbeki, 
but is not active in ANC branch politics, according to 
Professor Lawrence Schlemmer, a retired sociologist and 
Director of MarkData, a market research firm that conducts 
surveys for private companies, government departments, and 
political parties.  Schlemmer recently met with Deputy 
Economic Counselor, Economic Officer, and Economic Specialist 
in Cape Town. 
 
¶3.  (SBU) According to Schlemmer, blacks are now 18-20 
percent of what he called the "core middle class" of South 
Africa.  He defined this group as salaried professionals, 
middle managers (including those in the public and parastatal 
sectors), owners of capital- or knowledge-intensive small- or 
medium-sized firms, and others in like occupations, earning 
at least 12,000 rand (about $1,500) per month.  As recently 
as 2004, Africans were only 12 percent of the core middle 
class, he said.  While still small, the number of core middle 
class blacks has exploded by almost 15 percent per year in 
recent years. 
 
¶4.  (SBU) Schlemmer attributed the expansion of the black 
core middle class to brisk economic growth and aggressive 
affirmative action policies, especially in the public sector. 
 He warned, however, that growth would be slower in the 
future, as government has already hit many of its affirmative 
action targets, and skills deficits will make it harder for 
employers to find qualified black candidates for core middle 
class jobs. 
 
--------------------------------- 
Lies, Damned Lies, and Statistics 
--------------------------------- 
 
¶5.  (U) Although the term "black middle class" is ubiquitous 
in South African media and public discourse, it has no 
standard definition.  As defined by Schlemmer, the core 
middle class had 1.6 million adult members of all races in 
2003, and somewhat fewer than 2 million total members today. 
If Schlemmer is right that 18-20 percent of this group is 
black, then fewer than 400,000 blacks today qualify as core 
middle class.  In contrast, one widely-publicized estimate by 
the UCT/Unilever Institute puts the size of the black middle 
class at 2.6 million persons (out of a total adult black 
population of about 25 million).  However, this estimate has 
been criticized as overly broad because it includes, for 
example, college students and other potential members of the 
middle class, as well as people who own middle class consumer 
goods like microwave ovens.  According to the market research 
firm Market Tree Consultancy, the black middle class has 
doubled in size since 2003 to over 3 million adults today 
(out of a total middle class adult population of 7.5 
million), but only if "middle class" includes persons earning 
Qmillion), but only if "middle class" includes persons earning 
at least 2,250 rand (about $300) per month.  (Market Tree 
also reports that 52 percent of blacks earning 8,000 rand 
(about $1,000) or more per month are employed in the public 
or parastatal sectors.)  Using a different definition of 
"middle income," Standard Bank estimates that the 
"middle-income" proportion of black households grew from 15 
percent of all black households in 2000 to 26 percent in 
¶2006.  All everyone agrees on is that the black middle class 
has grown rapidly in the past 5 or 6 years, especially if the 
term is used to include holders of lower-end jobs in 
government, retail and the service sectors. 
 
--------------------------------------------- -- 
The Political Profile of the Black Middle Class 
--------------------------------------------- -- 
 
¶6.  (SBU) A detailed 2005 survey (supplemented by follow up 
research) showed that core middle class blacks are firmly 
pro-Mbeki and endorse his approach to economics, Schlemmer 
 
PRETORIA 00000505  002 OF 002 
 
 
said.  "They support empowerment.  They support a private 
economy.  These are Mbeki's priorities, too," he said.  At 
the same time, Schlemmer found that these blacks are not 
active in ANC branches or in local civil society 
organizations.  "They are just too preoccupied maintaining 
their life styles" to be involved in community activities, he 
explained. 
 
¶7.  (SBU) Schlemmer has also found that core middle class 
blacks are increasingly disillusioned with politicians, whom 
many see as incompetent or corrupt.  "They think Mbeki made 
mistakes on non-economic issues such as AIDS and Zimbabwe," 
he said.  "They think it's incredible that (Health Minister) 
Manto (Tshabalala-Msimang) has kept her job, in spite of her 
views on AIDS and her personal scandals."  Nevertheless, core 
middle class blacks retain a "fervent" sentimental attachment 
to the ANC and support the party at above-average levels. 
 
¶8.  (SBU) Schlemmer saw little or no possibility that core 
middle class blacks would ever defect from the ANC to support 
the white-dominated Democratic Alliance.  "The DA just cannot 
deliver empowerment," he said.  In the long run, however, he 
could see a "market" for two major black parties:  a 
pro-labor party and a party adopting Mbeki's positions on 
economics. 
 
------------------ 
Living on the Edge 
------------------ 
 
¶9.  (SBU) According to Schlemmer, middle class blacks are 
insecure about their status and hence devote much energy and 
money to "catching up" with their more-established white 
peers.  "They borrow money to buy cars.  They borrow money to 
buy garish furniture.  They borrow money to buy flat-screen 
TVs."  As a result, middle-class blacks are heavily in debt 
and have small net worths, he said.  They feel vulnerable to 
interest rate hikes and are anxious about downturns in the 
economy.  Knowing that many black university graduates 
struggle to find jobs, they are anxious about the future of 
their children.  At the same time, blacks in the core middle 
class expect rapid job promotions and they regularly hop from 
job to job, taking advantage of the relative scarcity of 
skilled blacks in an economy committed to affirmative action. 
 
¶10.  (SBU) Schlemmer's research found that the ranks of the 
core black middle class include very few entrepreneurs -- and 
what few there are fail in business at high rates.  He 
thought this situation would improve over time, as more 
middle class blacks build up capital and social networks in 
stable jobs, which they could then put to use in businesses 
of their own.  Sadly, his research shows that middle class 
blacks have little social contact with whites outside of the 
workplace.  "Whites and blacks eat different food.  They go 
to different restaurants.  They root for different sports 
teams.  They even drink different beer.  There isn't much 
common ground," he said. 
 
------- 
Comment 
------- 
 
¶11.  (SBU) The emergence of black capitalists, managers, and 
professionals is an epochal change in the social and 
political landscape of South Africa.  While many white South 
Africans still complain bitterly about affirmative action and 
racial transformation, the fact that growing numbers of 
blacks have a personal stake in mainstream economics will 
contribute to the country's long-term stability and 
normalization.  In fact, if the black middle class does grow 
steadily and develops its own political identity, it may turn 
out to be Thabo Mbeki's greatest legacy.  But whether it can 
mature fast enough to offset the discontent of millions of 
rural and unemployed blacks who have seen only limited 
Qrural and unemployed blacks who have seen only limited 
economic pay offs from democracy is one of the major question 
marks in South Africa's future. 
BOST