Ditching BEE to clear the way for a deal with satellite broadband service provider Starlink would give the government of national unity (GNU) the chance of opting for a non-racial empowerment programme that stands to achieve real transformation in terms of growth and jobs.
So says the Institute of Race Relations (IRR).
In a statement, the IRR says that government and business have a difficult decision to make, one that places the concept of BEE in danger.
“Starlink, the well-known satellite broadband service provider, has been put off by the Independent Communication Authority of South Africa (ICASA) regulatory requirement for 30% equity ownership by historically disadvantaged groups.
“The IRR notes that the Minister of Communications, Solly Malatsi, is looking for policy alternatives. The IRR proposes a non-racial empowerment alternative, Economic Empowerment for the Disadvantaged (EED).”
The IRR points out that its polling has shown that BEE has failed 85% of South Africans by harming the public service, inflating prices and increasing the opportunities for fraud. Even senior members of the Tripartite Alliance have remarked on the failures of BEE.
Says IRR researcher Chris Patterson: “If the Government of National Unity grants Starlink an alternative to the current equity requirements, this would undermine the principal flaw of race-based empowerment policy, which would be a welcome turn of events.”
It is time to take BEE off its pedestal and start looking at genuine non-racial empowerment alternatives.
Patterson adds that, as the IRR’s Breaking the BEE Barrier to Growth paper from earlier this year points out, BEE has eroded state efficiency, promoted corruption, deterred direct investment, increased unemployment, restricted growth, and worsened poverty.
The report states: “These outcomes contradict the government’s stated goal of using BEE to help provide redress for apartheid wrongs. Since BEE is clearly not succeeding in meeting this objective, alternative policies are needed to stimulate growth and help empower the poor in meaningful ways.”
In contrast, an EED strategy would have three core features:
- a non-racial focus in keeping with the Constitution;
- a scorecard that recognises and rewards key business contributions to growth, employment, and upward mobility, and
- a tax-funded voucher element that empowers the poor and helps them meet their core needs for sound education, housing, and health care.
Read Breaking the BEE Barrier to Growth here.