# Regulatory Compliance Category > BEE and Employment Equity Forum >  The law of Unintended Consequences?

## duncan drennan

I think we all often wonder what the impacts of BEE have been, and are going to be, because at this stage things are still a bit unclear (will they ever get clearer though?). In the BEE submission Dave raised the Indonesian case, where the Bumiputras laws apply,




> Former Prime Minister Tun Dr. Mahathir Mohammad has bemoaned the extreme reliance of Bumiputras on their privileges: "We have tried to tell them if you depend on subsidies, you are going to be very weak. But they don't seem to understand. We tell them if you use crutches, you will not be able to stand up. Throw away the crutches, stand up straight because you still have the capacity. I have talked about this thing and as a doctor I know very well the meaning of crutches but somehow or rather they want the easy way out. If I get an AP and I sell it and make some money, it's all right, they say."
> 
> From Bumiputra on Wikipedia


Inevitably we always have 20/20 hindsight (whether we learn from that is an entire issue on its own), so I found an article, "Where BEE damages," on the M&G online quite interesting, particularly this bit,




> What little data there is backs up the theory -- at least in part. The most startling figures I have come across are those quoted by Professor Carel van Aardt of the Bureau of Market Research, using figures produced by South Africa's All Media Products survey.
> 
> Van Aardt produced figures in June 2003 that indicated that the number of African entrepreneurs had fallen by 16% from 1998 to 2002. By comparison, the figures for whites had risen by 5%, while the figure for Indians had shot up by 58%, and that for coloured people by 18%. So everyone other than Africans has become more entrepreneurial.


We've been living in one of the largest and most sustained economic booms that South Africa has seen, and yet we see African exiting, rather than entering the entrepreneurial sector. This probably makes a lot of sense - I'm sure most of us (to some degree or the other) would bet on a safer option when weighing up our possibilities.

Even successful entrepreneurs have exited the sector, "An example is the metamorphosis of Herman Mashaba from entrepreneur to BEE dealmaker. Mashaba made his name as the founder of Black Like Me during the apartheid era, triumphing over policies designed to suppress African business."

Another question that needs to be addressed is whether BEE is focussing on the right issues, "Perhaps because of a focus on BEE, government support for small business, however well-intentioned, has been lacking. The Finscope Gauteng pilot study found that only 8% of small businesses in the province were using government support mechanisms."

*Only 8%* - that means two things, either, 
people don't know what support mechanisms there are and how to use them (I don't),  or(and)the government is not advertising those mechanisms and seeking to employ them as a front line attack on redistribution of wealth.

Like most things, the road less travelled (which is often the long way around) tends to have a longer lasting impact. I would love to be able to gaze into a crystal ball and see what the current policies have brought us 20 years down the line, and what kind of real impact they will have had.

I really want things to get better - everyone should have the same opportunities - and I hope that whatever road we end up travelling down leads us towards that.

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## Dave A

> Another question that needs to be addressed is whether BEE is focussing on the right issues, "Perhaps because of a focus on BEE, government support for small business, however well-intentioned, has been lacking. The Finscope Gauteng pilot study found that only 8% of small businesses in the province were using government support mechanisms."
> 
> *Only 8%* - that means two things, either, 
> people don't know what support mechanisms there are and how to use them (I don't),  or(and)the government is not advertising those mechanisms and seeking to employ them as a front line attack on redistribution of wealth.


Or, more cynically, the government is not advertising those mechanisms as they are tacitly reserved for insiders and the connected.

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## duncan drennan

> Or, more cynically, the government is not advertising those mechanisms as they are tacitly reserved for insiders and the connected.


Feeling a bit grumpy this morning?

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## Dave A

Each year I have some kind of personal behavioral theme based on what I think my business needs. Some years ago it was "Ruthless delegation" and was accompanied by extraordinary growth.

This year it's "Grumpy Dave" - the purpose is to drive up efficiencies and productivity. Folk were somewhat in cruise mode last year.

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## duncan drennan

> This year it's "Grumpy Dave" - the purpose is to drive up efficiencies and productivity. Folk were somewhat in cruise mode last year.


The Chinese year of the Grumpy Dave  :Rofl:

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