Pitso Tsibolane, News24 User
The current financial crisis continues to bite. Companies are retrenching workers and individuals are also feeling the pinch. This happens despite assurances from the minister of finance.
Some of the hard hit casualties are BEE deals that have been struck over the last few years. The reason most of these BEE deals are hard-hit is simply due to the fact that they were financed through debt, meaning that their equity exposure is very sensitive to the plummeting share prices at the stock exchange.
In light of the volatile market conditions, banks are also less willing to make loans easily available, making it very difficult for these BEE entities to access money to survive.
According to reports, the minister of trade and industry stated he was asked by some key stakeholders about whether BEE companies would be bailed out should the markets threaten to swallow them up.
The recent bailout of several financial institutions by several Western countries seems to have inspired some businesspeople with hope that when their entrepreneurship fails it is the duty of the tax payers to help them out.
This I find to be extremely worrying. When capitalists play the "high risk - high return" game they should be fully prepared to accept the rewards as well as the losses that come with this game.
When entrepreneurs overreach themselves and take risks, they should be prepared to fall on their swords when tide turns against them. I find it extremely opportunistic as well as reckless by some of these BEE beneficiaries as well as their "key stakeholders" to expect the taxpayer who is also feeling the pinch to bail them out.
When will entrepreneurs be responsible and know that when times are good, it is not time to be buying luxury cars, mansions and smoking expensive cigars, but rather it is time to be preparing for the worst?
As long as the creation of a black elite is done at the expense of ignoring basic fundamentals then these entities will never sustain themselves in the future under less challenging circumstances in any case.
What's in it for them?
How will we morally justify this bailout to workers and breadwinners who are currently being laid off without any government bailout?
How are they supposed to be happy that a few high fliers who already have lots of money to survive the economic turmoil are being "rescued" all in the name of sustaining the idea of a powerful and rich black middle class that does not do anything for them?
What is in it for them? Will these bailed out BEE entities share the fruits of the economic upswing when it does come? Why should they be treated differently, especially because some of these deals are not geared to benefit anyone but themselves as private individuals?
If the government does decide to bailout private businesses, then perhaps these BEE deals are not meant to produce entrepreneurs but merely to ensure a select few simply become rich.
This in my opinion is a sad shortcut to universal principles of hard work and success in business!
Perhaps we would have to ask once more: "What really is the essence of this 'empowerment'".
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