Yes, business is to blame

Original publish date – Tue, 11 Jan 2011 06:42:49 +0000, Keith

We have supported transformation since the day it was genuinely proposed. We have rejected enrichment, and tenderpreneurs, but always felt, and known that economic transformation was needed. Our country’s history was such that the vast majority of the population were denied access to the economy, and a change of government, and allowing all people the vote ensured political transformation, but did nothing for economic transformation. While 80% of the people who have the political power only own 20% of the economy (rough estimates), this country is a powder keg.

Almost every political party or pressure group agrees that economic transformation must take place. The ANC offered B-BBEE. The DA’s policy is “broad-based economic empowerment”. Even Afriforum agrees that some form of transformation must take place. The best thought out is definitely B-BBEE, but not properly implemented.

Unfortunately, not enough economic transformation has taken place. The media, their readers and the general population are more interested in discovering faults with the system, than proposing a better alternative. To generalise, all we have had in the past couple of years are complaints about anyone who become wealthy through government contracts. The companies who have made serious efforts at B-BBEE are ignored or even criticised.

So, why is business to blame? Well, the direction that government is taking with economic policy and jobs is not one that I can fully support. The President, in his recent address spoke about the need for government to create jobs and transform the economy. For many years the B-BBEE act was expected to do that exact job, and for many reasons it did not achieve all that was expected. One big reason is given above. Business did not support it sufficiently. My fear was always that if business did not transform properly and voluntarily, government would step in and start doing the job for them. This is now happening.

I am a strong supporter of a freer economy. The free enterprise economy is more likely to help grow an economy than leaving it in the hands of the government. All governments throughout thew world create laws and the B-BBEE act was not different and no more harsh than any of a thousand laws here and elsewhere. Yet, the B-BBEE act and its codes were more often criticised. Companies did front, companies did ignore the codes, companies did ignore the charters. Every time the President or government made a comment about transformation there is some rude comment or cartoon ridiculing him and our government.

Did those people not realise that economic transformation WAS going to follow political transformation? Did they really think that B-BBEE was going to fall away? Did they think that the level of economic inequity would result in a stable country? Now, by rejecting B-BBEE, and again I’m generalising because many companies have made good and far-reaching efforts, government is moving towards a more controlled economy.

The President now  wants to create more jobs via government. Government already accounts for about one third of the economy. It looks like the President wants government to become an even bigger player in the economy. The free market economy relies on less government, not more, so I would have liked to have seen less government. However since we do need economic transformation, and business made every effort to resist it (and let’s not hold government blameless either), it is no surprise that if government, and the people do not see the positive results of true transformation, it is obvious that they are going to try another approach. This approach is asking government to directly intervene to create those jobs.

Wouldn’t it have been better for the country to have encouraged private enterprise to grow the economy. Wouldn’t it have been better for private enterprise to have taken the initiative? Instead we have a man whom most people love to hate – Julius Malema – accusing white males of dominating the economy. He is of course 100% correct. His proposed solution is incorrect – that of nationalization. From his point of view too little economic transformation has happened so we need an alternative policy.  It would have been nice if business, and government had done the right thing, and rendered Julius’ comments obsolete!

 

You may also like...