Monday, January 14, 2013

December 10, 2012


Today I visited the Apartheid Museum in Johannesburg which has been one of my favorite and most rewarding experiences so far in Africa. My visit happened to coincide with a mini exhibit dedicated to Nelson Mandela and through pictures, stories and media described his life and the effect he’s had on South Africa. As mentioned in an earlier blog, upon being elected the first black president of South Africa, Mandela implemented the Truth and Reconciliation Commission for the purpose of reconciling years of racial injustice and violence among a torn country. This was followed by the Reconstruction and Development program issued to help alleviate poverty, unemployed and increase the overall standard of living for the disenfranchised of South Africa. After his five year term racial tensions still soared, the poverty line stagnant and unemployment increased roughly 3%. Even the most altruistic and capable of leader struggled to bring South Africa out of its economic slump and away from its racially torn past.

I bring this up because I think it is important that BBBEE not be thrown out or forgotten. There is a general consensus that the program has generally failed to achieve its stated goals, and as previously mentioned, it has become synonymous with laziness and nepotism. This new definition of BBBEE is at the hands of the ANC and should not be discredited because of their ineptitude to administer the program properly. The recent aim to cut down on corruption and fronting is certainly a step in the right direction and in my opinion a final test to see if the ANC can truly make good on their promises. They first need to remove the perverse incentive to front. If the government will only do business with high scoring BEE recipients, there is therefore a necessity to achieve these scores by any means. The decision is to front which is has been the widely chose method, or to invest in training mainly unskilled workers for promotion and upper management. This requires money, time and a strong risk of ineptitude by putting workers with little to no experience in positions of authority. Its clear to see why fronting has been so widespread.
A reevaluation of the BEE system instead of small additions and amendments needs to be in place in order to refocus it away from macroeconomic policy and towards economic inclusion. It is a difficult balancing act between empowering blacks and not scaring away the existing white population which maintains most of the human capital in the country. These relationships between races need to fostered and encouraged, and what better way than through market forces?



There is a strong need for skilled workers in South Africa, and it is up to the government to help create that supply. Instead of forcing blacks into positions of management, they should prepare them for such and let the demand for human capital soak them up. By no means is this an easy accomplishment but the direction that BEE needs to head.

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