September 1, 2012

Today I met with my Development professor Anthony Black to try and see his views on the recent progress of Broad Based Black Economic Empowerment. The first thing he said to me was that you simply cannot empower anyone; it is up to them to prosper.  This was the first mistake of BBBEE, the idea that handouts and special treatment could act as reparations and rectify a damaged history. Even if the idea proved successful and educated, driven blacks found themselves in positions of influence, power and governance to create better lives, there are only a certain amount of positions available.

Anthony Black, Professor of Development Economics

rest in the same position as before. Many critics have even cited BBBEE as a tool to bolster the ANC and secure votes, projecting the image that they are working hard to secure the futures of the majority.

Of course there are positives to the BBBEE program claims Professor Black. The most important of the scorecard aspects is the emphasis on skills development. This is the area in which there could be positive externalities and hopefully an improvement in the unemployment rate.

For this class I wrote a book review on UNDP’s an Employment Targeted Program for South Africa. One of the most startling facts brought up in the book is the heavy reliance on capital intensive methods over labor. The first inference of a high unemployment rate is that there is an abundance of labor available. It begs the question as to why companies have opted increasingly to go with capital intensive methods in South Africa. Perhaps not the only answer, but many agree that there is a sever lack of skills in the current labor market, especially as capital flight continues. It is more convenient and feasible to employ machines to do work than train a multitude of employees from scratch with little to no education. That being said, incentives such as that in the BBBEE to encourage skills development could greatly increase the participation rate of the unemployed and help match them to job openings.

As the unemployed become skilled and find long term employment, not seasonal and temporary work such as the building of roads, it will also help eliminate the stigma of lethargy associated with the unemployed, lending credibility to the BBBEE program.