BEE policy fatally flawed

Regarding “B-BBEE head Tshediso Matona defends economic redress amid legal challenges”, January 23.

Broad-based BEE commissioner Tshediso Matona has called for stronger laws to enforce and monitor BEE. BEE’s objective to enhance the participation of black people in the SA economy is admirable, and there have no doubt been successes, but it is doubtful that this policy benefited its intended constituency overall.

Why is this? Was there insufficient buy-in? Was business recalcitrant? No. Even with the best will in the world, the present policy is dangerously flawed. These are three inherent faults in BEE as the government implements it now.

The policy inevitably inculcates an attitude of entitlement. There may well be a moral case for such forced redress, but there is no doubt that forced preferential treatment weakens motivation.

This consequence operates independently of any other factors, and it is a weak foundation on which to build a broader economy. Due to price preferences of up to 30% afforded to the beneficiaries of this policy, it was inevitable that politicians would hijack the process, which they have done in the form of cadre deployment.

This intrusion of politics has, ipso facto, served to exclude more deserving beneficiaries. It was likewise inevitable that criminal gangs would muscle in on the (no doubt well-intentioned ) distortion of market prices, and seek to extort “their share” of the benefits violently.

These deleterious effects of BEE are not due to a defective application of the policy, but are inescapable consequences of the policy itself. Yes, the constitution enjoins action towards broad demographic representivity. Indeed, we all desire this. However, to effectively accomplish inclusive participation in the economy this injunction should be interpreted as exhortative and not mandatory.

Willem Cronje

Cape Town