BEE-Necessary Evil Or Glamorized Economic Injustice?

Administering economic justice after forty years of oppression is indeed a heavy task. BEE policy has become central to administering justice in a legislative environment. However, since its conception, the authenticity and relevance of Black Economic Empowerment (BEE) has come under scrutiny. It has been seen on one hand as an ethically just initiative to compensate previously disadvantaged individuals, and on the other hand as a pragmatic strategy which undercuts the notion of merit.

BEE began as a ruling which propagated the participation of black people in the economic mainstream. This was aimed to allow for black people who were previously deprived of opportunities to assume positions which would rebut the previous lack. However, a ruling which gives a certain percent of employment to black individuals, irrespective of merit implications, can be counter productive. Prof Mthuli Ncube, Executive Director of Wits Business School and President of The South African Business Schools Association (SABSA) explains,

"The core essence of justice is challenged at the thought of a white individual who meets the given criteria, but is shunned because of his skin colour. The question then arises; can previous injustices be set right by the same system?"

Evidently, the BEE debate is a delicate one. In its BEE strategy document, the Department of Trade and Industry states, "No economy can grow by excluding any part of its people, and an economy that is not growing cannot integrate all of its citizens in a meaningful way,"

"As such, this strategy stresses a BEE process that is associated with growth, development and enterprise development, and not merely the redistribution of existing wealth."

Set out in those words, the idea of a broad based policy seems concrete. Whether South Africa is administering this in a 'broad based' manner is the key question. Born out of this debate is the Broad-Based Black Economic Empowerment (BBBEE) Act which is a more integrated policy integrating all previously disadvantaged individuals including disabled, small and medium businesses, rural communities, trade unions and workers.

However, even still, implementation in a just manner is unfortunately an ideal. BEE and BBBEE is great in theory, but in reality some see it as 'cutting the proverbial economic pie in smaller pieces.' (http://www.inside-south-africa.blogspot.com/). What we essentially want moving forward is to grow the pie.

Another criticism is that BEE is only beneficial to the marginal elite. Some believe that it ignores the cries of the average and below average black population. In his article entitled, "BEE Fueling Economic Revolution," (Financial Times, May 2006), Jim Sutcliffe, former CEO of Old Mutual explains that according to the South African Advertising and Research Foundation, "Nearly half a million black adults moved into the middle income bracket in 2006"…"the number of black people in the upper brackets grew 30% and the proportion of blacks in the top income bracket is now 20%, up from close to zero a decade ago."

Sutcliff explains further, "This was perhaps inevitable as businesses scrambled to find what they considered to be bankable and 'connected' partners as a new era dawned." He also mentions that this has lead to a growing culture of entrepreneurship in South Africa which was required. It gave "some of the brightest black brains" the opportunity to open their own businesses and build our nation as opposed to joining the never ending political struggle for justice.

Companies, (both black and white) have according to Sutcliff benefited largely from the BEE policy:

"Empowerment deals such as the ones announced by De Beers, Merrill Lynch and my own company over the past year are increasingly the norm. Beneficiaries will own a growing stake in these companies' South African subsidiaries.

They include employees, customers, emerging businesses as well as strategic black business partners who bring real bottom-line value to the table and are rewarded accordingly," said Sutcliff.

Although, given the above, the gap between rich and poor still stands. It also seems the gap between the black rich and black poor is widening. In this light, others have the perception that BEE was good while it lasted, but it is now time to move on. Ncube elaborates, "We have seen its effects in reparation and restoration, but it is certainly not an indefinite solution." South Africa is synonymous for it's stance in restoring justice, and it would only make sense for us to play the field in a clean and merit driven manner from here onwards.

Also, rewarding individuals on the basis of colour encourages an apathy which breeds mediocrity. Black individuals have been deprived of a holistic quality education. How can they be assisted if they are deprived (yet again), of the prime lesson of hard work? How can we breed a nation which does not settle for mediocrity but instead works to achieve excellence at all costs? This places employers in a particularly tough situation when hiring people who will make a contribution to an organisation, but are not considered BEE candidates. As South Africa sees the change of guard in the reigns of leadership, the question on all our minds remains, what is the next step to administer justice?

After much exploration, the voice of the people is what should dictate the outcome. .Should we not focus on entrepreneurship? How about the rural poor? How are they being catered for? If you have any thoughts on the above issues, please post your comments.
Constructive criticism is valued.