The best weekly financial read in SA. As a subscriber you get online access to the new edition on Thursday morning. Register online with your subscriber number.


Advertising & Marketing
Arts & Leisure
Business
Business in Africa
Companies
Cover Story
Current Affairs
Economy & Markets
FM Focus
Front of the Book
Opinion
People
Personal Wealth Weekly
Property
Technology
Did You Hear?


Top Jobs



  • MX Health Report
  • FM Fund Management
  • Business Continuity
  • Innovations




  • Top Companies 2006
    AdFocus 2006
    Top Empowerment Companies 2006
    Budget 2006
    Top BEE Companies 2005 A Decade of Democracy



  • Corporate Aids Awareness
  • Cida City Campus



    Buy To Let
  • Corporate Governance
    Responsible Trustees
    Strategic Empowerment
    Tenders
    Virtual Books



    AdFocus website



    Help
    Search
    Subscribe
    New Web Users
    Log in
    Advertising Rates
    Advertise
    Online Advertising
    Contact Us - email
    Contact Us
    Career Junction

    Virtual Books
    Marketing in SA
    Business Finance
    HR Management
    Simply Successful Selling
    Intro to Company Law
    Cyberlaw
    Management & Treasury Operations






    Xerox. The OriginalXerox. The Original
    23 December 2005


    Under The Skin

    THE COLOUR OF MONEY



    By Peter Honey


    The road to hell, they say, is lined with empty filling stations. I don't know who "they" are, but I'll have to take their word for it, since I'm staying home this Christmas. Not for me the annual lemming run, with or without fuel shortages. As anyone who lives in Stress City knows, this is the best time to be in Jo'burg: the weather's great and the people are nicer - and scarcer.

    Also, I can confidently inform the faceless "they" that back home the road to hell is still paved with good intentions. That's my conclusion after reflecting on the year past and the one ahead in the calm, familiar seclusion of home and garden. Here's a piece of domestic cogitation you might want to mull over during the next three weeks, while the FM is off the shelves for the customary holiday break.

    It's about black economic empowerment - one of the key issues of SA's modern history, and if we're not careful one that could go on to become the biggest political curse since apartheid.

    How so? Well, empowerment is supposed to deracialise business, and so help normalise society as a whole. This is crucial if we are to weed out the racial inequities that have hobbled the country for generations. But, instead of deracialising the country, the emerging bureaucracy of state control and empowerment codes threatens to erect a new racial edifice that would be as insidious and even more difficult to break down than apartheid.

    Apartheid was always fighting an uphill battle, not only because it faced formidable opposition at home and abroad, but because it was a negative, divisive and ultimately unsustainable construct. Empowerment, by contrast, comes with the label of being positive, unifying and necessary for development. And so it should be. But what's missing from government's formula is transformation with growth.

    The breakdown in municipal services is a classic example. Commentators warned this would happen when the ANC government began turfing out skilled white officials in the mid-1990s. It's not simply a case of there being insufficient skills. There are plenty who used to fill key posts but left or were fired because their colour didn't match the skin ceiling. Now they're selling hamburgers or consulting to their successors for twice their former pay. The ANC government was too proud to learn from the oppressors, as the Afrikaners did from their former British oppressors before they pulled out.

    But there's another dimension to empowerment that must have Hendrik Verwoerd chuckling on his bed of seething coals: the more government tailors empowerment to satisfy its critics, the more it complicates the process. As Institute of Race Relations director John Kane-Berman points out in the institute's latest newsletter, Fast Facts, a new industry to monitor compliance with the empowerment codes is beginning to emerge.

    The requirement that companies must undergo annual verification and earn certificates of compliance with the codes has, according to reports, already prompted inquiries from at least 125 people and companies interested in being accredited as rating agencies. Such agencies, as Kane-Berman says, would be assessing not only the race of company owners but, in order to prevent "fronting", would have to "detect the colour of money and assign a racial identity to shares".

    The prospect of the private sector, including international accounting firms, helping to revive a process of race classification - for that is what it will be - is ironic, to say the least.






    BDFM Publishers (Pty) Ltd disclaims all liability for any loss, damage, injury or expense however caused, arising from the use of, or reliance upon, in any manner, the information provided through this service and does not warrant the truth, accuracy or completeness of the information provided. The publisher's permission is required to reproduce the contents in any form including, capture into a database, website, intranet or extranet.
    © BDFM Publishers 2012


    Member of the Online Publishers Association