BEE USED AS LICENCE TO ENTRENCH MONOPOLIES
BEE is being used by big business as a licence to entrench monopolies and has not been significantly effective in transforming society as compliance often means buying the retention of the status quo.
This is according to Professor Simon Roberts at the University of Johannesburg, who was speaking during the discussion forum of the recently launched Transformation Audit 2016 report, titled Opportunity for Change: The private sector’s role in inclusive development.
Addressing the small crowd as part of a four-person panel this week, the former chief economist and manager of the policy and research division at the Competition Commission said that many companies were not having sleepless nights over BEE.
“You can’t blame white monopoly capital for carrying on doing what they are doing. It’s like saying if we adopt good [soccer] referees and people dive [in a soccer match] why are they diving? They are diving because they want to win the match. They are diving because they get away with it. But who writes the rules? It’s companies. BEE was a compliance process, it’s a rulesbased process. You buy compliance with BEE. You actually buy the status quo, if you do this then you carry on as before. This came up in many competition cases, SAB used it all the time: ‘We are doing BEE so let us carry on monopolising the whole economy,’” he said, adding that SAB was merely playing by the rules like any other monopolising multinational company.
Roberts said that the BEE structure allowed monopolies and also negatively affected the creation of black industrialists as some companies did not see the need to create black industrialists if they were already complying with BEE codes.
He also warned that changing ownership would not change the structure of the economy.
Another panellist and co-author of the audit document, Mzukisi Qobo, who is also an associate professor at the University of Johannesburg, said the ruling ANC had run out of ideas on solving the country’s problems.
“There are also defects in the current political arrangement, ie, the fact that the ANC which is in government has run out of ideas about social and economic change. There’s no clear economic policy thinking that speaks to the complexity of the challenges that we face,” he said, pointing out that business leadership in the country had also proven to be content with minimalist short-term programmes such as corporate social investment and that it lacked imagination and creativity.
Qobo did not spare Nedlac, the body comprising government, business, labour and community organisations, and said the institution needed revamping and was, in its current form, not helpful in navigating the country forward.
He also said difficult questions needed to be asked about the current political leadership and its suitability.
Panellist Christopher Woods, who is an economist at Trade and Industrial Policy Strategies, raised eyebrows when he proposed that using 30% of government revenue for direct cash transfers to individuals earning less than R9 600 could help tackle challenges faced by the country’s social welfare system.
He said transfers of lump sums would encourage people to either further their studies or start businesses.
Though he admitted that it was a proposal that would probably never see the light of day, Woods said the core principle was the question of what was more viable.
Roberts supported the principle behind Woods’ proposition, suggesting that government should consider giving individuals around R200 000 in exchange for a specific period of national service.
“If you give people R200 000, they may choose not to go to university, they may choose to go and start a business,” Roberts said.