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How BEE is killing the economy


Ben Levitas says policy leads to tenderpreneurship squeezing out entrepreneurship

Yet another job summit is about to commence. If they don’t address the elephant in the room, they may as well stay home and avoid all the hot air. Unless BEE or BBBEE in whatever derivation is scrapped in the private sector, there will be no solution to our unemployment problem and endemic corruption disease. For the two are inexorably intertwined each poisoning the other.

The basic building block of any economy, whether it is in India, China, Italy or Argentina, is the family business. These micro-enterprises are what employ the most people in any economy. Mess with this “atomic unit” and you undo the whole structure of the economy. This is what has occurred in South Africa. Communist ministers, though well meaning, but with no understanding of business, have tried to engineer social and economic change in society. It is difficult enough to start a business and just as difficult to sustain one, and the family provides the most resolute foundation structure.

Even families have differences, how much more so two or more partners thrown together to meet an arbitrary and external racial quota criteria.

Basing a tender system on any criteria other than the best price for the same quality, immediately opens the system up to abuse. It is difficult enough to adjudicate technical tenders, but when BBBEE scorecards form part of the equation it is well neigh impossible. So a class of middlemen have been produced, who help meet the BBBEE criteria but at a substantial cost. It has been proven that most state-owned enterprises have paid twice if not thrice the true value of the product or service. So a few well positioned ‘tenderpreneurs” benefit at the expense of the fiscus and all taxpayers are the losers.

South African has in the past produced world class entrepreneurs, amongst others, retail geniuses, industrial geniuses and medical innovators. Has any government official wondered why this font has dried up? Well simply stated, why start up here, invest and struggle only to lose control at some future point? Well, entrepreneurs are still being produced, but are relocating elsewhere, where they are recognized for their talents and rewarded commensurably. They are going to places where they don’t have to undergo bureaucratic gymnastics to include representative samples of the population in their enterprises.

It is a sad denouement of our transformation from “Apartheid” to a society still obsessed with race. Scarcely a political speech whether by the President or by the EFF fails to drag race into the rhetoric.

Race has polarized our society more than at any stage since 1994. The ANC is like a headless chicken running around on its last legs. Never has a political party, that enjoyed such support, close to a two thirds majority, squandered such opportunity to transform the well being of its people.

The well being of all the people is what it should all be about. Now the ANC and EFF only offer populist and simplistic solutions, that are only going to lead us further into the wilderness. So toxic has the rhetoric become, that certain standpoints are taboo. Ann Berstein made mention of “spineless Businessmen have going AWOL” - well do you blame them? No one wants to be labeled a “racist”, counter revolutionary”, a “colonialist” or a ‘reactionary’. On certain topics, and BBBEE is probably one of them, there simply is no middle ground or space for nuance.

The solution to unemployment and turning this economy around is less government interference and fewer policies. Less unionization, as the unions have only protected those fortunate enough to have employment, and the laws that we have protecting workers are serving to make the work force less productive and added to our losing our competitive edge against other countries.



Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER

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