Gerhard Papenfus's open letter to Gwede Mantashe: Why whites, and many others, despise the BEE scheme

Key topics:BEE benefits few, harms the economy, and fosters quick-rich culture.True entrepreneurship requires hard work, value creation, and patience.BEE creates empty wealth, arrogance, and long-term societal damage..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Gerhard Papenfus*.To Mr Gwede Mantashe: Minister of Mineral and Petroleum ResourcesDear Minister During a recent television interview, you made the flagrant statement that certain political parties (which incidentally have a strong 'white' political base), and consequently the supporters of these political parties, "hate" black economic empowerment.Minister, whatever your assumed reasons for white people's, and I quote, "hatred" of black economic empowerment, you are simply wrong. We do not hate the economic empowerment of any race, but we certainly detest the race-based BEE scheme. This is not only because whites are severely prejudiced by it, but also, as a result of its inherent defects, all races are negatively affected; in fact, the entire population and the economy.Except for the politically connected, 'privileged' few who are spectacularly enriched by this scheme, those ‘tenderpreneurs’ who sacrificed their souls for the sake of quick, albeit short-term riches, everyone else is losing out; South Africa Inc. is left impoverished to benefit a few greedy individuals. However, those who benefit now through this scheme will eventually be the biggest losers. No one escapes the eventual outcome of engaging in dishonest activity, and BEE is an inherently fraudulent form of enterprise.Anyone acquiring quick riches, 'making money' without actually knowing how to generate 'real value' out of 'nothing', will eventually face severe consequences. True entrepreneurship entails identifying and fulfilling a need within a particular environment, being subjected to the personal sacrifices of hard work, persistence, patience, the ability to overcome setbacks and push through financial hardship, even bankruptcy in some cases. These are the characteristics of a true entrepreneur, a bona fide wealth generator..Read more:.Majority of South Africans call for end to BEE policy.The immediate punishment of BEE ‘success’ is uncertainty, a deep-rooted discontent, a realisation that you have not earned your wealth through hard work, that you added no value, and that you will eventually be 'found out'. That is why the beneficiaries of the scheme fall prey to spectacular greed, with ever-increasing fear that when the day of reckoning comes, whatever they have gathered will not be enough to protect them against the consequences of becoming rich in an inherently dishonest manner.Those BEE beneficiaries who are gifted shares of businesses, not through hard work, but as the result of political coercion - forcing companies to give in to blackmail for the privilege to be allowed to participate in the mainstream economy - experience the disappointment of realising their shareholding is empty; that it brings no fulfilment. It might bring immediate material benefits, and often spectacularly so, but no deep-rooted satisfaction. That is why shareholding attained in this manner does not bring loyalty and the desire to add value. For any company, this is a burden, causing a continuous drag, which comes at great financial cost. Shareholding, as it is envisaged in BEE legislation, never brings about the personal fulfilment of taking true ownership, which is earned through hard work and sacrifice. It is empty and therefore leaves the BEE beneficiary with nothing other than a constant pursuit of materialistic gains. The BEE model breaks every rule in terms of sustainable wealth creation. You will not find anything remotely resembling this model of enrichment in any business handbook or recognised successful business model, anywhere else in the world. Since the inception of the scheme, hundreds of billions, if not trillions, have been pumped into programmes to elevate individuals to the status of entrepreneurs and so-called industrialists, in record time, side-stepping all natural processes normally required to reach success. In most cases, this was just fruitless and wasteful expenditure. Those BEE ‘tenderpreneurs’ who survive, notwithstanding the breach of business principles, only manage to do so as a result of being perpetually financially propped up to keep them alive. The overall cost to the economy runs into trillions.The highest cost to the economy is perhaps the fact that BEE beneficiaries have set the tone in establishing a culture of not working oneself out of poverty, but scheming oneself not only out of poverty, but to the top of the food chain. They have set an example that belittles the lasting successful combination of hard work, patience, and a moderate lifestyle. This has resulted in the creation of a population that aspires to get rich quickly by piggybacking on the success of others, without any willingness to make sacrifices whatsoever.The cost of losing credible business culture, by far, surpasses the monetary losses incurred as a result of the BEE scheme; this warped mentality has contaminated a population and, in the process, set South Africa back many years. It will be difficult for South Africa to recover from this. For many, the urge for quick riches has become so overwhelming that they have resorted to crime. But then again, BEE in itself is a crime, a form of extortion, a form of expropriation without compensation that amounts to theft.Those who have attained the spectacular riches facilitated by the BEE scheme, instead of hanging their heads in shame, have become arrogant. Their arrogance, however, is misplaced and will be short-lived. These BEE beneficiaries built nothing and contributed nothing. Instead, they perpetrated the biggest heist in history and impoverished a country. Like a parasite, they simply suck the lifeblood from somebody else’s existing accomplishments, whether it is somebody else's business or the taxes levied on the hard-earned money of honest hard workers and real business owners. However, there may come a day when a commercial 'truth' commission will expose the inherent hypocrisy of the BEE ill-gotten gains. If such a commission is not established, society will figure it out anyway. Those now almost drowning in their riches will then find out that they have built their castles on sand.Minister, you simply err when you say that “anyone who opens a debate about BEE today is promoting white supremacy.” Whites no longer harbour a desire for white supremacy. We do, however, detest this new false supremacy simply because we see it for what it is - a fake redistribution scheme bound to fail in due course but dragging the country into the abyss in the meantime. We will not stop calling it out for what it is..*Gerhard Papenfus is the Chief Executive of the National Employers' Association of South Africa (NEASA).

Gerhard Papenfus's open letter to Gwede Mantashe: Why whites, and many others, despise the BEE scheme

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