Black Economic Empowerment

Imagine you work in a major bank. You have many years experience and qualifications, you work very hard, long hours, and you are good at what you do. One day you are asked to supervise two new employees. They don't report directly to you, but you assign them work. They are both lazy, turning up at 10 and leaving at 3. They don't want to take responsibility for jobs which you have assigned them, and you often end up having to do the work yourself. They have very few qualifications and little experience.

Now imagine that these people earn FOUR TIMES what you earn!

Welcome to South Africa. The black economic empowerment regulations mean that this is not an imaginary scenario, but one which was related to me first-hand by a good friend of mine here.

The way it works is this: BEE is about empowering the blacks who were discriminated against under apartheid - trying to even out the economic iniquities between black and white. Now one can see that in order to even out a patently unlevel playing field, the long term solution is to focus on education, so that young blacks growing up get the same standard of education, and hence the same opportunities. However this is a long-term solution, and in 1994 BEE was put in place as a short-term solution.

It works like this. If a business wants to be "BEE certified" it must meet a target for the number of blacks it employs. For the banks in particular, it's very important to be BEE compliant, for if not the bank will not be eligible for any government contracts. And with the government having a stake in most of the valuable mining concessions, it's clearly good business for banks to be BEE compliant. Because of the huge lack of qualified, skilled black employees, and the demand by employers (due to legislation), blacks with even a modicum of experience can charge a huge premium.

Hence the apparent paradox of a poorly trained, lazy, under-qualified employee earning four times their capable experienced white counterpart.

You can imagine the effect this has on the bank - the morale of qualified and experienced staff reached rock-bottom, and they leave, only to be replaced by more lazy, inexperienced people who think the state owes them a job as recompense for apartheid. Result - the bank loses its edge.

There is more to BEE than this - for example, when Vodafone wanted to buy the remaining 50% stake in Vodacom, you can imagine their surprise when they were told that they would have to pay for 50%, but would only receive about 20% - the rest would be given to a BEE company practically free of charge.

You will often hear from whites here that they don't see a future for their children in South Africa. Almost everyone has plans for emigration or either Australia or the UK. Being intelligent and well-qualified is not enough to get you a job here - you need to be black.