Lednum

My study blog

The extent to which the Black Economic Empowerment (BEE) has reduced racial inequalities

Posted by lednum on October 2, 2006

the policies which have been put forward from the BEE have proven to be a major factor in reducing racial inequalites. As in 1999 the Employment Equity Act took place.

Key objectives behind this act are :

-at least 40% of the companies listed on johanessburg stock exchange (JSE) should beblack.

-At least 30% of private sector companies should be black-owned.

-Black people should hold at least 25% of the shares held on the JSE.

Furthermore, the success and lack of succes of BEE can critically outline whether their policies have reduced racial inequalities or not.

The successes and failures of BEE are:

-almost 300,000 blacks becamee middle income earners (between 8,000 pound and 15,000 pound) between 2002 and 2005.

-In 2005 Banking and insurance group Rand finalised a 700 million pound empowerment deal that put 10% of the companies shares in trusts established for black staff members and for poor rural woman and mine workers.

-several high profile black empowerment busineses such as NAIL, african banks and community banks have collapsed.

-Many BEE activities simply enrich  a small number of individuals and do not offer any economic benefits to the black majority, white businessmen give them directorships and shares to confirm to BEE regulations, Eric Molobi, chairman of kaviso trust, and former ANC activist, has been appointed deputy chairman of the imperial group, which has revenues of 3 billion dollars a year.

Moreover, affirmative action policies also outline the factor in hand.

-the employment equity act,1998, set up a drectorate called “equal opportunities” to ensure that organisations “demographically represent” the people of South Africa. The correct balance of a workforce is 75% black,52% disabled.

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