BEE must shape up – experts

SYMBOLIC: JUSTIFIED POLICY DIRECTION FOR SOCIETY, BUT AFFIRMATIVE ACTION MUST HELP ECONOMY

‘Reality of economic empowerment is as important; start skills development.’

Affirmative action in the form of black economic Empowerment (BEE) needs a reality check, warn economists. Racism accusations flared up this week after medical aid giant Discovery launched its banking facility last week, announcing a BEE share scheme amounting to 10% of its equity. While minority rights activists, such as AfriForum CEO Ernst Roets, vowed to call the corporation to task, experts differed on whether BEE was a justified policy direction for society and the economy.

Iraj Abedian, chief executive at Pan-African Investment and Research Services, said SA’s history necessitated some form of BEE, but it is equally important to scrutinise whether it amounted to real growth to the economy.

BEE share schemes which took decades to become revenue streams for its beneficiaries did not address immediate needs.

“The reality is there is a symbolic role BEE is playing,” saidAbedian.

“Coming from a history where marginalisation was designed for disempowering the majority, that recognition is important. But that is just the symbolic side of it. The reality of economic empowerment is just as important.”

Discovery responded to Twitter criticism of their BEE scheme, stating the company was simply complying with BEE legislation. The Association of Black Securities and Investment Professionals’ Stephen Seaka concurred.

“The Discovery Bank’s decision is in line with the financial sector transformation code. This provides that banks should sell 10% of their equity to black people,” he said.

“This is less than other industries, in which the general rule is 25%. Discovery is complying with long established policy that saw other banks sell their stakes into black hands. ”

Efficient Group economist Dawie Roodt said BEE has largely benefitted a select few black people and had only resulted in further inequality and has fuelled racial tensions.

Trade union Solidarity and AfriForum have protested recently, saying BEE policies were discriminatory against poor whites.

Skills development, focused on the youth – especially girls – was key to a more equal society, suggested Roodt, as an alternative to BEE. “BEE is sensitive but we really need to ask what we can do to uplift the poor? We need to find sustainable answers. Research has shown we need to start with skills development. Not education.” –