BBBEE wrong

[Blurock]

Let's face it, BEE is not going to save our economy and will not uplift Black people as dreamed up by the ANC. BEE is ruining our economy as new investors are looking for opportunities in countries with less restrictions on their money and their business. It is clearly racial discrimination and is polarizing society to the extent that businesses are closing or jobs are being cut.

I can understand the frustration of workers who get paid the minimum, while the top dogs (Black and White) walk away with the loot. How can we justify a CEO of a listed company earning R60 million p.a. and the workers get R6000 pm? (R72k p.a.= 0.12% of R60 mil) Office workers may get R20 - R30k or up to R360k p.a. That is only 0.6% of the CEO's package. This happens in state owned entities as well aka Eskom, Transnet etc. Just look at the inflated packages of snr municipal managers vs workers. Our wage gap is the legacy of English and British colonialism where colonies have been exploited to the maximum. This is unsustainable and leads to discontent and mistrust and may well end in anarchy.

What may work is the Scandinavian socialist/capitalist economic model of social democracy. https://en.wikipedia.org/wiki/Nordic_model
In 2019, all five of the Nordic countries ranked in the top 10 on the World Happiness Report. Clearly, they must be doing something right?

Consider a cap on the wage gap so that the R60 mil of the CEO is also shared by the workforce who are mostly living on the breadline. Should these people earn a better wage, it will increase their buying power and will be a great stimulus to the economy.
Economics teaches us that wealth is created by the flow of money. Money lying idle in the bank is not generating wealth or prosperity, only interest to the holder. This is also seen in China (a communist country) where workers started earning more due to an increase in demand from globalization. Poor workers from rural areas could for the first time buy TV's, fridges and other consumer goods that improved their lives. Today there are many Chinese millionaires benefiting from their communist/capitalist economy, because of increased trade.

Does our govt have the courage to admit that BEE is wrong and is not creating prosperity? Will they consider another economic model?
When will they scrap tribalism and give rural families ownership of their land and their homes. This will give them the opportunity to get loans to educate their children, get access to funding for small business or other entrepreneurial activities. What a boost that would be to our economy.

[ians]

Let's face it, BEE is not going to save our economy and will not uplift Black people as dreamed up by the ANC. BEE is ruining our economy as new investors are looking for opportunities in countries with less restrictions on their money and their business. It is clearly racial discrimination and is polarizing society to the extent that businesses are closing or jobs are being cut.

I can understand the frustration of workers who get paid the minimum, while the top dogs (Black and White) walk away with the loot. How can we justify a CEO of a listed company earning R60 million p.a. and the workers get R6000 pm? (R72k p.a.= 0.12% of R60 mil) Office workers may get R20 - R30k or up to R360k p.a. That is only 0.6% of the CEO's package. This happens in state owned entities as well aka Eskom, Transnet etc. Just look at the inflated packages of snr municipal managers vs workers. Our wage gap is the legacy of English and British colonialism where colonies have been exploited to the maximum. This is unsustainable and leads to discontent and mistrust and may well end in anarchy.

What may work is the Scandinavian socialist/capitalist economic model of social democracy. https://en.wikipedia.org/wiki/Nordic_model
In 2019, all five of the Nordic countries ranked in the top 10 on the World Happiness Report. Clearly, they must be doing something right?

Consider a cap on the wage gap so that the R60 mil of the CEO is also shared by the workforce who are mostly living on the breadline. Should these people earn a better wage, it will increase their buying power and will be a great stimulus to the economy.
Economics teaches us that wealth is created by the flow of money. Money lying idle in the bank is not generating wealth or prosperity, only interest to the holder. This is also seen in China (a communist country) where workers started earning more due to an increase in demand from globalization. Poor workers from rural areas could for the first time buy TV's, fridges and other consumer goods that improved their lives. Today there are many Chinese millionaires benefiting from their communist/capitalist economy, because of increased trade.

Does our govt have the courage to admit that BEE is wrong and is not creating prosperity? Will they consider another economic model?
When will they scrap tribalism and give rural families ownership of their land and their homes. This will give them the opportunity to get loans to educate their children, get access to funding for small business or other entrepreneurial activities. What a boost that would be to our economy.

Excuse my ignorance ... but everyday I skim through complaints about the BBEEE ...the government ...how some rich white people people gave billions and not the blacks ...how white cant feed hungry people ...etc etc etc... and at the same time they say we can only watch and smile... its doesnt help getting angry etc etc ... it makes you wonder about the donations handed over by these rich white people ...what is in it for them... they certainly wouldn't be doing it unless there was something in it for them... the black rich dont have to do anything to get contracts... or fight for land they took when white privilege was a way of life for a minority.

There is no law preventing people supporting small business... or helping other whites who need help....only the greedy selfishness of people who live above their means or have to prove they are better than the Jones.

I hear contractors complaining all the time about bad workmanship ...i do it myself ... until i realised why the workmanship is so bad... you cannot expect a qualified artisan to do the work cheaper than the price of materials.

Customers are the real problem... expecting to get work done at a labourers rate ...but expecting a qualified person with many years experience to actually do the job.

If your quote is R10 000 and the material cost is R8000 and the labour cost is R2000 ...dont squeal like a stuffed pig when the workmanship looks like crap and you have to keep calling the person back to repair the job... you get what you pay.

By the way you forgot to mention the unions... anyone know what the union bosses earn in comparison to the "workers".

Its about time a real union with the workers interest at heart ... simple things like the environment we are expected to work in... the aircon in the office stops working ...they down tools and walk out the building ...real workers are expected to work in environments so uncomfortable that it should be classified as unsafe... fat boy who collects union fees arrives in his aircon BMW and shouts the odds ...tells everyone to strike "no work no pay" while his fee and salary is in the bank month after month.

One day when people stop looking down at the real men in the world who create the 6-7 digit bank accounts for the boss man ...when office staff (overhead) earn twice what a worker (income generator )earns things will start improving.

When you look at how much people are prepared to pay for a person to remove a drain plug from a vehicle or a "technician" with 3 days training in comparison to a qualified artisan with years of training... you start to understand why a labourer is dropped off to do a "hit and run" job.

The whole system is screwed up.

[Justloadit]

And after calling these unskilled workers repeatedly and not solving the problem they call you and complain that your fee is expensive. Had they called in the first place, they would have saved themselves 10 times what iy had cost them.

Quick story in an apartment block where there was some plumbing work done. A tank was installed for a water reservoir to supply water when there is a mains water incoming issue. There was a booster pump.
Funny thing was that every time that the water mains had a issue the complex had no water. They kept on calling the same plumber/electrician, and paying out call out fees for more than a year.
Finally one of the renters was so fed up that he decided to sue the landlord if the problem was not fixed and that he better get a qualified plumber out and pay the going rate.
Took the qualified 5 minutes to figure out that the original installer had swapped the intake and out going pipes to the booster pump. In other words, when there was mains water, it would feed the booster pump directly, and when the mains dropped away, the tank was full, but the pump was sucking from the top of the water tank, instead of the bottom. How much did it cost, not only the tenants, but the landlord, trying to save a buck.

I hear these stories all the time.

Had another one, solar installation. 400Km away, after inspection, the PV supply cable was nicked and open circuit during installation by a "qualified" installer who knows what he is doing. Got an earful before going out about the crappy equipment we supply. Yep ain't going to get paid for that call out unfortunately.

[Blurock]

I agree with you guys. Ethics is a big problem in business these days because we live in a gangster state where everyone sucks up to the government as they believe that they will get something out. The rich do not care because if you have money, you can change tack. Look at Bossassa and others. Fed the crooks and sucked up to them until they were caught our themselves. ...and who went to jail?!!

It is time for people to stand up for what is right and not give in to unreasonable and crooked demands. How noble is BEE when it prevents white children from getting food parcels? How noble is BEE if our black workers are being penalised for working for a white firm? The minister has made it clear that no aid will be distributed to white firms! This impacts directly on the livelihood of our black workers and their families!

[Blurock]

This article says it all.
12 FEBRUARY 2011
South Africa: Only a matter of time before the bomb explodes
by Moeletsi Mbeki: Author, political commentator and entrepreneur.

I can predict when SA’s "Tunisia Day" will arrive. Tunisia Day is when the masses rise against the powers that be, as happened recently in Tunisia. The year will be 2020, give or take a couple of years. The year 2020 is when China estimates that its current minerals-intensive industrialisation phase will be concluded.

For SA, this will mean the African National Congress (ANC) government will have to cut back on social grants, which it uses to placate the black poor and to get their votes. China’s current industrialisation phase has forced up the prices of SA’s minerals, which has enabled the government to finance social welfare programmes.

The ANC inherited a flawed, complex society it barely understood; its tinkerings with it are turning it into an explosive cocktail. The ANC leaders are like a group of children playing with a hand grenade. One day one of them will figure out how to pull out the pin and everyone will be killed.

A famous African liberation movement, the National Liberation Front of Algeria, after tinkering for 30 years, pulled the grenade pin by cancelling an election in 1991 that was won by the opposition Islamic Salvation Front. In the civil war that ensued, 200000 people were killed.

The former British prime minister, Margaret Thatcher, once commented that whoever thought that the ANC could rule SA was living in Cloud Cuckoo Land. Why was Thatcher right? In the 16 years of ANC rule, all the symptoms of a government out of its depth have grown worse.

Life expectancy has declined from 65 years to 53 years since the ANC came to power;
In 2007, SA became a net food importer for the first time in its history;
The elimination of agricultural subsidies by the government led to the loss of 600000 farm workers’ jobs and the eviction from the commercial farming sector of about 2,4-million people between 1997 and 2007; and
The ANC stopped controlling the borders, leading to a flood of poor people into SA, which has led to conflicts between SA’s poor and foreign African migrants.
What should the ANC have done, or be doing?

The answer is quite straightforward. When they took control of the government in 1994, ANC leaders should have: identified what SA’s strengths were; identified what SA’s weaknesses were; and decided how to use the strengths to minimise and/or rectify the weaknesses.

A wise government would have persuaded the skilled white and Indian population to devote some of their time — even an hour a week — to train the black and coloured population to raise their skill levels.

What the ANC did instead when it came to power was to identify what its leaders and supporters wanted. It then used SA’s strengths to satisfy the short-term consumption demands of its supporters. In essence, this is what is called black economic empowerment (BEE).

BEE promotes a number of extremely negative socioeconomic trends in our country. It promotes a class of politicians dependent on big business and therefore promotes big business’s interests in the upper echelons of government. Second, BEE promotes an anti-entrepreneurial culture among the black middle class by legitimising an environment of entitlement. Third, affirmative action, a subset of BEE, promotes incompetence and corruption in the public sector by using ruling party allegiance and connections as the criteria for entry and promotion in the public service, instead of having tough public service entry examinations.

Let’s see where BEE, as we know it today, actually comes from. I first came across the concept of BEE from a company, which no longer exists, called Sankor. Sankor was the industrial division of Sanlam and it invented the concept of BEE.

The first purpose of BEE was to create a buffer group among the black political class that would become an ally of big business in SA. This buffer group would use its newfound power as controllers of the government to protect the assets of big business.

The buffer group would also protect the modus operandi of big business and thereby maintain the status quo in which South African business operates. That was the design of the big conglomerates.

Sanlam was soon followed by Anglo American. Sanlam established BEE vehicle Nail; Anglo established Real Africa, Johnnic and so forth. The conglomerates took their marginal assets, and gave them to politically influential black people, with the purpose, in my view, not to transform the economy but to create a black political class that is in alliance with the conglomerates and therefore wants to maintain the status quo of our economy and the way in which it operates.

But what is wrong with protecting SA’s conglomerates?

Well, there are many things wrong with how conglomerates operate and how they have structured our economy.

The economy has a strong built-in dependence on cheap labour;
It has a strong built-in dependence on the exploitation of primary resources;
It is strongly unfavourable to the development of skills in our general population;
It has a strong bias towards importing technology and economic solutions; and
It promotes inequality between citizens by creating a large, marginalised underclass.
Conglomerates are a vehicle, not for creating development in SA but for exploiting natural resources without creating in-depth, inclusive social and economic development, which is what SA needs. That is what is wrong with protecting conglomerates.

The second problem with the formula of BEE is that it does not create entrepreneurs. You are taking political leaders and politically connected people and giving them assets which, in the first instance, they don’t know how to manage. So you are not adding value. You are faced with the threat of undermining value by taking assets from people who were managing them and giving them to people who cannot manage them. BEE thus creates a class of idle rich ANC politicos.

My quarrel with BEE is that what the conglomerates are doing is developing a new culture in SA — not a culture of entrepreneurship, but an entitlement culture, whereby black people who want to go into business think that they should acquire assets free, and that somebody is there to make them rich, rather than that they should build enterprises from the ground.

But we cannot build black companies if what black entrepreneurs look forward to is the distribution of already existing assets from the conglomerates in return for becoming lobbyists for the conglomerates.

The third worrying trend is that the ANC-controlled state has now internalised the BEE model. We are now seeing the state trying to implement the same model that the conglomerates developed.

What is the state distributing? It is distributing jobs to party faithful and social welfare to the poor. This is a recipe for incompetence and corruption, both of which are endemic in SA. This is what explains the service delivery upheavals that are becoming a normal part of our environment.

So what is the correct road SA should be travelling?

We all accept that a socialist model, along the lines of the Soviet Union, is not workable for SA today. The creation of a state-owned economy is not a formula that is an option for SA or for many parts of the world. Therefore, if we want to develop SA instead of shuffling pre-existing wealth, we have to create new entrepreneurs, and we need to support existing entrepreneurs to diversify into new economic sectors.

Mbeki is the author of Architects of Poverty: Why African Capitalism Needs Changing. This article forms part of a series on transformation supplied by the Centre for Development and Enterprise.

[Blurock]

What would have happened if Moeletsi Mbeki instead of his brother became president of South Africa?
I have the greatest respect for this man. His analysis of our financial and political environment was spot-on and we are now experiencing what he predicted 10 years ago. If you have not read his article posted in the previous thread, I urge you to do it now.

[Blurock]

So the (unfortunate) prediction made by Moeletsi Mbeki in 2011 was right on the button. If you have not read his book yet, do it now.

South Africa: Only a matter of time before the bomb explodes
by Moeletsi Mbeki: Author, political commentator and entrepreneur.

The country is basically bankrupt and state coffers are empty. The tax base is shrinking. It is reported that about 73% of the R529bn in personal income tax collected in 2019 was paid by a mere 529 230 individual taxpayers, many of whom are skilled, mobile and likely to emigrate as services deteriorate. That is the reason why the ANC is now looking at other sources of income; land expropriation without compensation, NHI (to take money from the medical aids), prescribed assets: compulsory investments in state entities by pension and investment funds. Several state-owned enterprises – think Eskom, SAA and the SABC as the most topical examples – have required inordinate amounts of money from the government to stay afloat, and the SA Revenue Service seems to be lagging on its tax collection targets.

Blatant Elite Enrichment, also known as BEE, has ruined South Africa by enabling corruption and elitism. I am all for black entrepreneurs being successful and for black managers to be recognized and advanced. However, no entrepreneur, not qualified in racial terms, will risk investing in a new business (creating jobs) where there is so much uncertainty and where he/she is not in control of the business that they have started.

The ANC's racist policies have rather encouraged the people with knowledge or the means to start a business to emigrate and to look elsewhere. Imagine if Elon Musk had started his business in South Africa!

[Marq]

More like an implosion rather than a bomb explosion.

[Blurock]

Blatant Elite Enrichment

In an article by Anthea Jeffrey, she comments that the SACP/ANC alliance is committed to a national democratic revolution (NDR) aimed at so crippling the capitalist economy that South Africa can in time be pushed into socialism and then a communist nirvana. Its many NDR interventions are the main reason why poverty and inequality have increased so greatly since 1994 – and especially within the black population.

Much of the fault lies with the race-based employment equity and black economic empowerment rules that enrich a narrow and politically connected elite while impoverishing and greatly harming the black majority.

These rules, along with the destructive cadre deployment and tenderpreneurship they have spawned, have spread dysfunctionality across the public service, triggered the collapse of many municipalities, crippled Eskom and other SOEs, facilitated corruption way beyond ‘Zupta’ state capture, prompted an exodus of capital and skills, reduced growth to rates far below those in other emerging markets, and increased the number of jobless black people (on the expanded definition) from 3.2 million in 1994 to 10.3 million today.

Credentialed group (Blatant Elite Enrichment)

Like other race-based rules across the world, South Africa’s policies benefit only the most skilled and credentialed group, which comprises roughly 15% of the black population. By contrast, the remaining 85% of black South Africans have little prospect of ever gaining access to BEE deals, management posts, or preferential tenders at inflated prices. They are, however, continually harmed by all the adverse consequences of these rules.

[Blurock]

Pepuda Bill

Telkom CEO Sipho Maseko recently spoke about how BEE can actually be harmful to local businesses and noted just how easy it is to get around loopholes, that end up harming local businesses and the economy.

This unfair practice of discrimination against minorities may however come to an end as the ANC government is updating the Promotion of Equality and Prevention of Unfair Discrimination Act, colloquially referred to as Pepuda. The scope of the Pepuda Bill proposes to prohibit not just unfair, intentional discrimination that is related to 18 listed criteria, but even discrimination which is fair or unintentional. The Bill demands the “elimination” of all discrimination – irrespective of whether it is fair or unfair – as part of the general obligation to promote equality.

The Pepuda Bill runs counter to long-standing ANC policy on race, whereby “Race-based black economic empowerment (BEE), employment equity, and preferential policies will no longer be treated as examples of ‘fair’ discrimination. Instead, all these policies will have to terminated in keeping with the general obligation to promote equality by ‘eliminating discrimination’.”

[Justloadit]

And if it is like any of the elite court actions, it will take years before actually happening.

[Blurock]

And if it is like any of the elite court actions, it will take years before actually happening.

Agreed, the dysfunctional government has lost all credibility. The acting Secretary General actually declaring that they love the man who bought South Africa to its knees by facilitating state capture, stealing trillions and then disrespecting the judiciary with contempt of court. This is scandalous and he should actually be tried for treason as an enemy of the people.

[Blurock]

The IRR released a statement yesterday has tabled three proposals that it believes would quickly revive the economy.
These proposals are:

• Protect property rights;

• End all race-based policies; and

• Implement Economic Empowerment for the Disadvantaged.

The statement said: “…instead of race-based policies, South Africa must implement an effective, non-racial empowerment policy. Our proposal, Economic Empowerment for the Disadvantaged (EED), would give businesses an incentive to grow and create jobs, while also empowering those South Africans who most need it and putting an end to the perpetual enrichment of a greedy elite.”

https://dailyfriend.co.za/2021/07/20/irr-tables-three-proposals-to-savetheeconomy/

[Blurock]

taken from Biz News Insider:

There is much good being done by South Africans – often in spite of official directives rather than because of them. Take the example of Anthony Krijger, an entrepreneur from Westville in KZN, who wrote:

As a company we’ve been doing exactly what Mike du Toit suggests.

We’ve trained in-house when we’ve needed new warehousemen, forklift drivers, drivers etc. All our labour started life with us as being totally unskilled. We started by sending them on a course learning to drive a forklift. We’ve trained drivers by funding their driving lessons and test with the agreement that if they pass the company pays for everything. If they fail, they owe the money back. But when they pass ultimately, we refund them all their costs.

We pay to train staff on various computer and IT courses as most don’t come to us with the required skills. If there are courses that employees wish to go on, the company encourages this and pays for the course, so long as it is relevant. The results are that we’ve grown with our staff, although we are still a small family business. We have a really low (actually non-existent) staff turnover and we try to make our workplace a place where staff look forward to going to, seeing as they almost spend more time at work than leisure time with their families.

The galling thing is that in spite of this, we are still seen by authorities as a “white” non-BEE business rather than a family business that aspires to ensure staff get ahead with their careers and create a comfortable and pleasant work environment that is totally non-discriminatory in any way whatsoever.

[adrianh]

I suppose the government would say that it is all good but that there is still no ownership. By analogy: "We own a huge mansion in Camps Bay and our servants are well treated" - The government wants part ownership for the non-white workers (for free)

I am just speculating about the possible reasoning of the government.