By Alec Hogg
The political paradoxes affecting my beautiful country never cease to astound me. Before 1994, October 10th was a public holiday commemorating the birthday of Afrikaner hero Paul Kruger. It was therefore ironic that the Government Employees Pension Fund (GEPF) chose this day to announce an ambitious social engineering initiative.
GEPF chairman Dondo Mogajane, a former Treasury Director-General who is now the CEO of the Moti Group, used the occasion to unveil the pension fund’s “Transformation Policy.” The focus is on directing its R2.3 trillion in assets towards “delivering positive financial and social service outcomes for South Africa’s previously disadvantaged populations.”
___STEADY_PAYWALL___Given the pre-1994 predominance of Afrikaners in the public sector, a sizeable chunk of GEPF’s assets are actually owned by members of the population group which, by definition, will be excluded from any of this largesse. To wit, the yield on their retirement fund will be consciously sacrificed to support the ANC’s social engineering experiment—announced on Kruger Day, no less.
There are many ways to support people who have not enjoyed equal access to opportunities. Doing so successfully, however, requires more than superficial, first-level thinking. To simply sacrifice growth on retirement savings is a slippery slope, one that could require bailouts from future taxpayers.
The ultimate irony, though, is the unintended consequence of such initiatives. Artificial stimulus rarely leads to more than a temporary advantage. Financial prejudice triggers resilience in those affected, who tend to work smarter and harder to overcome it, thus generating permanent benefit. Ask immigrants. Or the Jews.
Sterkte.
Alec
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