Far from helping South Africans, Black Economic Empowerment (BEE) has proved to be ‘one of the biggest obstacles to growth’, having ‘enriched an elite few while keeping millions in poverty’, according to the Institute of Race Relations (IRR).
BEE, the IRR says, ‘disincentivises employment, growth, and investment’, and it is time for an alternative.
Details of such an alternative – ‘a practical non-racial … empowerment policy that incentivises economic growth rather than rent seeking’ – is the substance of the third in a series of policy-solution papers from the Institute, The IRR’s Blueprint for Growth: Breaking the BEE Barrier to Growth, which will be launched with an online briefing next Thursday, 9 May.
This paper represents the consolidation of decades of research into BEE as a policy obstacle to real empowerment and economic growth in South Africa.
The author of the paper, Dr Anthea Jeffery, IRR Head of Policy Research, will join IRR Head of Strategic Communications, Hermann Pretorius, in next week’s briefing for a discussion of the key themes of the paper.
Says Pretorius: ‘South Africa needs to urgently achieve economic growth and upward social mobility. After two decades of BEE, it’s clear that the policy has been a catastrophic failure. BEE has enriched an elite handful of cadres and comrades, but has left millions behind. After twenty years of BEE, South Africa’s unemployment is worse, particularly among black South Africans. We have seen productivity stutter, investment dry up, and corruption skyrocket. At the heart of this crisis lies the comprehensive failures of BEE.
‘Millions of South Africans were made poor by the economic exclusion of apartheid, leading to cross-generational socio-economic stagnation. Two decades of BEE have entrenched poverty instead of empowering the poorest. And the costs have been enormous.
‘South Africa’s pro-poverty forces have used BEE and other race-rigged policies to plunder and capture, with almost no value added to our economy. Instead of a focus on empowerment through economic growth, we’ve seen a wealth-destroying ideology deliberately empowering pro-poverty cronies, cadres, crooks, and comrades to pillage and plunder.
‘This policy failure can be turned around and empowerment policy can be made to work for all South Africans who need help to enjoy the dignity of a job and economic participation. We are weeks away from an election that will allow the setting of a new policy course on empowerment. South Africans must grasp this opportunity. The IRR’s Blueprint for Growth: Breaking the BEE Barrier to Growth puts in place a firm foundation to achieve true empowerment through economic growth.’