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November 27, 2007


Kevin Lester

Mr. Radebe did not fully reflect my comments to him. My beef with compliance mentality is actually limited to ownership. I am hardly concerned about clever compliance stuff in the bottom 6 elements of BEE because there is a built in carrot - if you seek to buy credits for any of the bottom six, you'll end up paying a lot of money for a pile of nothing. If you target sustainability, chances are you'll pay once off and reap the rewards.

Ownership if of course a very different proposition. Because of this unhealthy obsession with shareholding, you get some awful models like the "terminal" share models for ESOPs where the workers hang around for 10 years, then get paid out just enough to buy a lounge suite and we call it promoting black ownership of the economy!

As I have said to you before on more than one occasion - we all missed a lesson learnt under Volkskapitalisme - create a black owned bank to rival the big five banks in size, then we're talking real ownership. Not five meaningless collections of 10 percent in each of the big five.

So while run around creating little nebulous shareholdings to chase this rather pointless 25 percent by hook or by crook, answer me this - can we really claim to have promoted genuine and sustainable black ownership of the economy when the prospect of black owned long term insurance house rivaling Sanlam or Old Mutual in size anytime in the next 50 years look decidedly gloomy.

Paul Janisch

Thanks Kevin

I am very glad that you made the latter point about "Volkskapitalisme". It's something you have been speaking about for a while and I did want to blog on it at some stage - I couldn't quite remember the context.

Kevin Lester

Some interesting stuff on Volkskapitalisme:
Highly respected authority: Dan O'Meara: http://www.anc.org.za/ancdocs/pubs/umrabulo/umrabulo22/volk.html
Highly respected SA academic: Herman Gillomee:
Anthony Butler's recent biography of Cyril Ramaphosa that quotes no less that Michael Spicer on the true reasons for the General Mining Deal in the 1960's (published by Jacana) on page 120.
There is so much about Afrikaners Empowerment and the factors that made it such a success, that we don't even know. The consensus seems to be that that the scale of the challenge was different and therefor the to initiatives are incomparable.
To those who buy into this orthodoxy, I have only two replies:
1) have look what Giliome says about education and job creation and link it to recent research like the Unilever Institute's Black Diamonds Report and Business Map's very last data sample on the economic impact of Skills Development and Employment Equity; and
2) Just keep asking the question, will we see a black owned bank of any substance in SA in out lifetimes. Good good people, if Santam/Sanlam and Volkskas could emerge in less that 20 years, why are we so fussed with 25% stakes or less.

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