John Dludlu’s most recent column refers (“Let’s talk about strengthening BEE”, June 4).
The 2024 UBS Global Wealth Report indicates there has been good progress in poverty reduction. Since 2000 the “bottom of the pyramid” (wealth of less than $10,000) has halved, whereas the next category ($10,000-$100,000) has more than doubled. In terms of inequality growth (as measured by the Gini index) SA’s inequality has increased by 17.7% since 2008.
Compare this with the December 2020 UN University report on SA inequality, which dived a lot deeper into the theme. Its main finding was that “there is no sign of decreasing wealth inequality since the end of apartheid”.
To argue that BEE has had no role to play in this unfortunate development is naive. BEE does affect factor mobility — in SA’s case capital and skilled labour leaving, leading to lower economic growth, less efficiency, higher unemployment and more poverty.
However, just as BEE supporters have to understand that interventionist measures cause economic harm, BEE critics need to understand that a laissez-faire approach (multigenerational trickle-down economics) will not find a political majority in this country.
Ideally, we can agree on a set of policies that increase factor inflow and contribute to effective broad-based transformation. While not perfect, India over the past 20 years can serve as a guide.
Oliver Drews
Via BusinessLIVE
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