ARCHIVED: Commentary No. 78: South Africa 2000: Stability Achieved - Potential Security Threats Remain

Commentary No. 78 has been archived.

Allister Sparks and Duncan Edmonds

October 2000
Unclassified

Editors Note: In previous Commentaries, (No.44, May 1994; No. 54, March 1995; No. 68, Summer 1996), authors Allister Sparks and Duncan Edmonds concluded with a prognosis of "cautious optimism" for the future of South Africa. For the past several years a superficial, but nonetheless fairly widespread impression that the country has been declining has been evident particularly in the Western press. Does that earlier prognosis remain valid?

Well into the post-Mandela era, the gloomy predictions of what might happen after the great man left are proving false, just as they did after South Africa's first democratic elections in 1994. The country has undergone the smoothest of transitions from Nelson Mandela to Thabo Mbeki; it has now held three peaceful and successful all-race elections, including the local government elections of 1996. - Fall 2000.

Disclaimer: Publication of an article in the Commentary series does not imply CSIS authentication of the information nor CSIS endorsement of the author's views.

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Introduction

Well into the post-Mandela era, the gloomy predictions of what might happen after the great man left are proving false, just as they did after South Africa's first democratic elections in 1994. The country has undergone the smoothest of transitions from Nelson Mandela to Thabo Mbeki; it has now held three peaceful and successful all-race elections, including the local government elections of 1996; its progressive Constitution is bedded down and working smoothly; it has a multiracial Parliament with a big African National Congress (ANC) majority but 10 opposition parties representing the entire cross-section of the population.

Freedom of speech and of the media are guaranteed by the Constitution; South Africa has a freedom of information Act ahead of Britain. It has shown itself to be more gender-sensitive than most developed countries: one-third of its Cabinet and of its 400 MPs are women-including the Speaker and Deputy Speaker of the National Assembly and the President of the upper house, the National Council of Provinces.

Fears of a White counter-revolution have evaporated. The Defence Force is now led by a Black general and the extremists of the Afrikaner far right have all but disappeared, gaining less than 1% of the vote in the last election-as did the Black extremist parties, the Pan-Africanist Congress and the Azanian People's Organization. Even the main vehicle of Afrikaner nationalism, the National Party, which ruled the country unchallenged for nearly half a century, has shrunk from 20% of the vote in 1994 to 6%. It was replaced as the official Opposition in Parliament by the liberal Democratic Party. The recent merger of these two parties to form the Democratic Alliance does not alter the reality that a hundred years after the Boer War which gave birth to it, Afrikaner ethnonationalism is dead.

Social integration, too, has moved with relative smoothness: 28,000 schools as well as all the country's technical institutions and universities have been integrated with fewer than half a dozen racial incidents. Interracial sex and marriage, criminalized under apartheid, are now quite common. And although Whites have fled the central city areas as these have become crime-ridden, a new multiracial middle class is slowly beginning to arise in the suburbs. Crime, rather than racial discomfort, is the chief concern of the White population.

Canadian Interest

Canada has had a significant interest in South Africa since the first Canadian troops to fight overseas participated in the Boer war a century ago. More recently, during the last decade of the apartheid era, Canada was a vigorous advocate of sanctions and other initiatives to assist the ANC in exile which both Mandela and Mbeki have publicly acknowledged. Since 1993 both CIDA and IDRC have provided substantial and increasing support to South Africa. Both within the Commonwealth and in the wider international community, Canada shares a profoundly important interest in the continuing stable development of South Africa where the most fundamental issues of racial, social and economic equity remain at risk. Progress in South Africa represents the best hope for the future of the entire continent.

Potential Security Threats

While a significant degree of stability has been achieved in reducing the political and racial threats to the security of the state, nonetheless, the sober reality in South Africa today is that the country still faces major potential security threats; internally from socio-economic factors and externally from the current disarray in several of its neighbours in southern Africa, notably, Zimbabwe and Angola.

Three Revolutions in One

The new South Africa has its problems, although surprisingly these are not of the order so many people both inside and outside the country predicted at the time of its transition and with the departure of Mandela. The fact is that South Africa is doing well, racially and politically, but has hit problems economically.

Behind this lies a factor no one had anticipated, namely that South Africa must undergo not simply a socio-political revolution of institutionalized racism and political authoritarianism, but has to undergo three major revolutions rolled into one.

Even as South Africa tackles the task of trying to integrate a society divided by 400 years of colonialism and nearly 50 of apartheid, the new government must also undertake a gigantic economic revolution in seeking to transform the country from an isolationist economy under international sanctions to a player in the new global marketplace. It must transform itself from a highly protected, inward-looking economy into an internationally competitive one. This has meant opening itself up to international competition, reducing tariff barriers, abolishing exchange control regulations, and allowing the rand currently to float to a market-related level. These have been courageous and necessary steps, which have exposed the country however to blasts of international financial instability.

When South Africa went to the polls in April 1994, no one anticipated that the winds of financial and market globalization were about to blow 38% of the word's economies into recession, as happened in 1998, causing a flight of capital from emerging markets everywhere and unleashing a series of hedge-fund attacks on their currencies. South Africa survived the crisis better than most, but in six weeks the rand plummeted 20% against the US dollar.

A Manufacturing Exporter

The third revolution coinciding with the other two is just as challenging. South Africa must transform itself from a primary producing economy, based on agriculture and mining, into an export-driven economy based on manufactured goods. Gold, which used to be the mainstay of the economy, is a shrinking asset. In 1980 it provided 17% of South Africa's total national production; today it is 4%.

Other mining activities-South Africa is a leading exporter of bituminous coal, the world's fifth largest producer of natural diamonds, and a great variety of industrially important metals including platinum, chrome, iron, vanadium, copper, nickel and manganese ore-have also been diminished, forcing the mining industry as a whole to downsize. Since the African National Congress (ANC) came to power, a third of the country's 750,000 miners have been layed off.

South African industries, meanwhile, have historically been geared toward import substitution, a pattern intensified by international sanctions during the 1980s. Only a few, such as Rothmans, the tobacco transnational, South African Breweries, the world's fourth largest beer manufacturer, and the wine and fruit-canning industries, were significant exporters. At the same time the new government has withdrawn the fat agricultural subsidies which the apartheid regime paid to its White farming constituents, many of whom are now succumbing to the hard realities of what is an arid climate in many regions. That, too, has resulted in a major retrenchment of unskilled labour.

Conflicting Requirements

What compounds the difficulty is a conflict between the requirements of these three revolutions. On the one hand, the ANC faces the need to deliver more jobs and better pay to its expectant constituents who have been deprived and discriminated against for so long, while on the other hand the harsh reality of competitive participation in the global market is such that it leads to pressure on wages and increased unemployment, at least in the short term.

In seeking to make the transition from primary producer to manufacturing exporter, the government is confronted with the fact that the old economy required an abundance of cheap, unskilled labour, while the new one requires a smaller, highly skilled workforce-and the apartheid regime, as a matter of policy, prevented the Black population from acquiring skills. The purpose of the policy was, firstly, to protect White jobs, but also to attempt the Sisyphean task of reversing the relentless influx of rural Black people to the industrial cities. They were supposed to stay in their own tribal "homelands," which were one day meant to become independent states, leaving the greater part of the country as the White man's land.

The result was that Black people were deliberately given separate and inferior education (most in fact got no education at all). They were barred from the major universities. They were prohibited by law from doing skilled work. Until 1979 they were not allowed to join trade unions, which meant they could not acquire skills by becoming apprentices. They were not allowed to form partnerships or companies. They could not establish businesses, except simple shops selling perishable produce-and even then their trading licences had to be renewed annually. This must have been the only instance in all history where a government deliberately crippled the skills base of its country's working class. Cyril Ramaphosa, the trade union leader who became the ANC's chief constitutional negotiator and is now a prospering tycoon, has described this as the work of all apartheid's crimes against humanity. It is that legacy which is the new regime's greatest liability. A massive though problem-ridden effort is now being made to build up that skills base, with a R40-billion (US$ 6.67-billion) education budget taking up by far the biggest share (21.3%) of the government's total expenditure for the current financial year.

To remedy the educational deficiencies will require at least a decade and herein lies perhaps the most dangerous, if underestimated, potential threat to the security and stability of South Africa in the future.

Growth Picking up

Tough though the economic ride has been, things have begun to improve. In 1999, consumer inflation which reached 25% under the apartheid regime, fell below 5% for the first time in twenty years. Growth is showing signs of picking up, but the toll on employment as been heavy. By the end of 1998, the rand was steady at just over R6 to the US dollar and R10 to the pound sterling, and it has remained there through 1999. The Johannesburg Stock Exchange has climbed back 30% and interest rates have fallen 10% to 15.5%. Best of all, consumer inflation, which reached 25% under the apartheid regime, is now around 5%.

Growth is showing signs of picking up and there are optimistic predictions for next year, but the toll on unemployment has been heavy. This is unquestionably South Africa's number one problem. Half a million jobs have been lost since the ANC came to power, and the unemployment figure now is variously estimated at between 25% and 35% depending on whether the informal sector is included or not. And while there is an emerging Black entrepreneurial and middle-class that is becoming more affluent, the poor are growing poorer. This is a tough proposition for a liberation movement that promised to give its people a better life after generations of oppression and exploitation.

Growth and job-creation are therefore the priorities as Mbeki settles into his role as Mandela's successor. It demarcates the difference between the two men. Where Mandela's whole emphasis was on racial reconciliation, "work and delivery" are Mbeki's battle cries. Where Mandela's Cabinet and senior civil service appointments were made largely with a view to maintaining racial and ethnic balance and softening the blow for the Afrikaners, with the result that he tolerated under-performance in some critical areas, Mbeki has shown himself ready to dump some of the poor Cabinet performers, especially in the critical education portfolio, and has fired a number of departmental heads. Although he lacks Mandela's stature and charisma, Mbeki is in many ways better qualified for the job now at hand with an MA degree in economics from Sussex University. He is intelligent, hard-working and highly skilled in the art of managing tensions within the "broad church" ANC, which contains many jousting factions.

Astonishing About-turn

Mbeki has in fact been the driving force behind the ANC government's economic policy from the outset, and in this he has already been responsible for one of the most astonishing political about-turns in recent times. Throughout its long history, the ANC has characterized itself as a socialist party. It had close links with the Soviet Union while in exile, and it has long had a formal alliance with the South African Communist Party (SACP) and the big trade union federation, Cosatu. Its only economic policy when it came to power was a pledge contained in its Freedom Charter, drafted at a "congress of the people" in 1955, to nationalize what it called "the commanding heights of the economy."

"The national wealth of the country... shall be restored to the people," the Charter read. "The ministerial wealth beneath the soil, the banks, and monopoly industry shall be transferred to the ownership of the people as a whole. All other industries and trade shall be controlled to assist the well-being of the people." The Charter also pledged that "all the land (shall be) redivided amongst those who work it, to banish famine and land hunger." At the time of Mandela's release in 1990, the Freedom Charter was still holy writ. Ironically, too, the ANC inherited a country with more nationalized industry than any other outside the communist bloc. Afrikaner Nationalism had been deeply influenced by Hitler's National Socialism and had founded many parastatal corporations as a way to bring about the economic empowerment of Afrikaners in an economy dominated by the English-speaking sector of South Africa's White population.

Yet the ANC's economic planners, led by Mbeki, quickly recognized the economic disasters that had flowed from nationalization and attempts at centralized economic management, in Africa as well as the Soviet empire. Overnight they switched from Marxism to pragmatism, and today the nationalization pledge is a dead letter. Instead, the ANC government is committed to privatizing the many parastatal corporations established by the apartheid regime. It has opted for an orthodox free-market strategy which it has sold to its followers under the policy of Growth, Employment and Redistribution (GEAR), the line being that to provide jobs and redistribute wealth you must first get growth, and that there is only one way to do that.

Confronting the Unions

It has not been an easy sell, and it is a measure of Mbeki's political skill that he has managed to keep the alliance with the SACP and Cosatu intact, while bluntly telling them that GEAR is "non-negotiable." More than that, he has taken a particularly tough line against the public service unions refusing to countenance a wage demand higher than the 5% inflation rate. Last year when the whole of Cosatu threatened to call a general strike in support of 12 of its public service unions involved in the dispute, Mbeki stood firm, ordering his Public Services Minister, Geraldine Fraser-Maleketi (herself a member of the Central Committee and vice-chairman of the SACP), to end the negotiations and unilaterally implement the government's offer. The unions were outraged, but effectively Cosatu faced an ultimatum either to accept what was on offer or quit the alliance. The consequences of the latter in terms of parliamentary seats and other political opportunities, as well as ongoing insider influence, were too much to contemplate, so Cosatu backed down.

It was a significant victory for Mbeki. Had he been the one to back down, he would have been Cosatu's hostage for the rest of his presidency. As it is, he has established his ascendancy over the union federation and is now likely to move to downsize the entire civil service, which was grossly oversized as the result of a "sunset clause" agreement reached with the old regime at the time of the 1992-94 transitional negotiations to guarantee all existing civil servants their jobs for five years. This will lead to substantial savings for the treasury and almost certainly an improvement in efficiency as well. But most important of all, it demonstrated Mbeki's willingness to get tough even with important political allies if he deems it necessary to achieve the economic growth the country needs.

Looking ahead a few years, the unions represent a very powerful force which can either strengthen or drastically weaken the security of the state. If insufficient progress is made in improving the standard of living of the people and ameliorating the negative socio-economic indicators, the political climate could quickly deteriorate with the unions losing patience and giving up on the ANC, thus providing a strong nucleus for a radical wing which could destroy the equilibrium of the country. The attitudes of the union leaders in this regard should be closely monitored.

Overall, a scorecard of the ANC government's performance since 1994 would seem to justify a better rating than it has generally been accorded by the media, both at home and abroad, with their heavy focus on the country's high crime rate. Indeed even the incidence of violent crime, which the government itself concedes is unacceptably high, has declined marginally but steadily since 1994. But it is in the provision of basic services to people who did not have them before, mostly African people living in rural areas and sprawling shantytowns around the big cities, that the main advances have been made. For many of these people, the quality of life, if not their economic circumstances, has been significantly improved.

The tragedy of AIDS casts a shadow of almost apocalyptic gloom over the entire society. The horrible statistics suggesting death is in the millions which emerged from the recent international conference in Durban have focused world attention on the issue. Although Canada and the United States and other members of the international community are pledging substantial assistance, the outlook remains bleak, indeed terrifying. Yet, we must all go on. As the Economist (July 15, 2000), after its extensive coverage of the conference, concluded: "The message is 'hang in there.' AIDS may be exceptional, but it is not that exceptionable. Good science and sensible public policy can defeat it. There is at least a glimmer of hope."

Water and Electricity

In 1983 a major study of poverty in South Africa, sponsored by the Carnegie Corporation, revealed the startling statistic that the average rural black woman had to walk eight miles every day of her life to fetch firewood and water for her household. The drudgery of this daily toil aside, the water was often polluted, drawn from muddy pools where animals defecated, while the ever-extending search for fuel was causing serious deforestation. It was also a startling feature of apartheid South Africa that while that country generated more electricity than the rest of Africa combined, only one-third of its people received any.

Since 1994 more than 3 million Black people, mostly rural and shanty-dwellers, have been provided with clean tap water within 200 yards of their homes. Over the same time, 1.5 million mainly Black households have been connected to the grid. The parastatal generator, the Electricity Supply Commission (Eskom), is now connecting houses at the rate of 800 every working day and estimates that it will have connected 3 million by 2004, while the Water Affairs Department estimates that it will have 12 million waterless people connected by 2005.

Communications

In 1994 only one quarter of all homes in South Africa had telephones, nearly all of them in White suburbia. In the Black townships, phones were extremely rare and in Black rural areas they were non-existent.

Two years later the government concluded a sophisticated privatization deal, trading monopoly protection for a commitment to deliver to unprofitable Black areas. It sold 30% of its Telkom parastatal to a consortium of Southwestern Bell of the US and Malaysian Telkom, guaranteeing the consortium a five-year monopoly in the fixed-phone business on condition that 75% of all households have access to a clinic, police station, post office, library and community centre in the country. By the end of 1998, 1.3 million connections had been made and 35% of South African homes had telephones.

Housing

In its campaigning for the 1994 election, the ANC pledged to build a million homes during its first five-year term to accommodate the 1 million people living in shacks in the former tribal "homelands" and the rapidly multiplying shantytowns around the cities. In fact the government has fallen well short of its target, a failure for which it has been sharply criticized by opposition parties and the media. Nevertheless, by the end of 1998 it had completed 681,000 new houses accommodating an estimated 3 million people.

Part of the problem is land cost, and the reluctance of banks to grant loans to poor people without collateral to offer, many of whom had embarked on bond boycotts in the past. The government grants a subsidy of R16,000 (about US$2,667) to each beneficiary, but the lion's share of this goes for land purchase. Loans are needed to build the houses, which are mostly single-unit dwellings of a maximum size of 30 square metres. The government has now embarked on a new policy to partially underwrite the bank loans, which it says is speeding up the building program.

Education

The government's record in education-arguably the most important sector of all, given the need to build up the country's skills base-has been spotty.

On the positive side, while school attendance used to be compulsory only for White children, it is now compulsory for all up to Grade 9 (of 12 grades). This means thousands more Black children are now in school. The government has built 10,000 new classrooms since 1994 to accommodate the increased numbers which are growing at 4% a year-although there is still a massive backlog and some classes in rural areas are held under trees.

But the performance rate in the schools has been less than impressive. Many teachers are under-qualified, and the pass rate for the Senior Certificate (school-leaving) examinations has been poor, declining steadily to below 50% as numbers increased, but then staging a slight recovery in 1998. The number of Black students enrolled in universities has increased by 10% since 1994, but the pass rate there is poor too.This is one area where Mbeki has moved vigorously to improve things, dumping Mandela's Minister of Education, Sibusiso Benghu, who was seen as a non-performer, and replacing him with the most conspicuous achiever in Mandela's Cabinet, former Water Affairs Minister Kader Asmal, an educationist who spent his years in exile as a Professor of Law at Trinity College, Dublin. Sharp improvements are predicted.

Labour

Before 1994, South Africa's labour scene was characterized by high levels of conflict, peaking in 1987 when 9 million workdays were lost through strikes. Since then there has been a dramatic decline in strike action, averaging around 1.6 million workdays lost annually with a low point of only 650,000 in 1997. The economic downturn in 1998 produced an upswing which has continued this year, but the figure is still well below the pre-1994 level.

The improvement is attributable to a new Labor Relations Act which came into effect in November 1996. Agreed to by labour, business and government representatives, the law introduced simple but effective dispute-resolution mechanisms, as well as providing for fair labour practices (required by the Constitution) and regulations of strike action.

Crime

Nothing has done South Africa's international reputation more harm than its image as a country with a rampant crime rate. The murder capital of the word, it is sometimes called in the media. Yet official statistics show that while there was a steep increase at the time of transition in 1994, the level of violent crime has come down sightly but steadily each year since then.

The pattern over time is that the crime rate was comparatively low through the 1980s (less than half its present level) when the country was in a state of political turmoil under two states of emergency which gave the police draconian powers. However, it crept up as the decade advanced, then leaped forward in 1990 as the emergency laws were lifted and Black political parties were allowed. It then rose steadily after that, reaching a peak in 1994, after which most categories of violent crime began their slow decline.

Attempted murder, common assault, burglaries of businesses, shoplifting, motor vehicle theft, commercial crime and drug-related crime have all declined. But several categories have increased, notably rape (Interpol estimates that South Africa has the world's highest incidence of reported rape cases), residential burglaries and vehicle highjackings.

Explaining the high crime rate, the Institute for Strategic Studies notes that countries in transition to democracy are often prone to a rise in crime. This, it suggests, is because "authoritarian governance is usually accompanied by policing completely inappropriate for a democratic environment. On the other hand, the new state is often faced with the dilemma that it is required to govern an (often unstable) new society with the same instruments which were used to enforce authoritarian rule."

But even if sophisticated analysis may suggest some modest improvement over time, the horror of South Africa today is that the crime with its accompanying random violence is a fundamentally destabilizing factor severely impacting tourism and new investment, two of the most vital requirements for economic growth and job creation.

Prognosis

In previous Commentaries, (No.44, May 1994; No. 54, March 1995; No. 68, Summer 1996), we concluded with a prognosis of "cautious optimism" for the future of South Africa. For the past several years a superficial, but nonetheless fairly widespread impression that the country has been declining has been evident particularly in the Western press. Does that earlier prognosis remain valid?

Much progress has been achieved, indeed, more than has been recognized by the world community. In these articles we have made a deliberate effort to record the accomplishments to partially balance the negative impressions. Yet South Africa, which is functioning today as a sophisticated modern society, is confronting deeply rooted socio-economic problems, highlighted by horrendous inequality in income distribution, all exacerbated by the ever increasing forces of globalization. These circumstances, combined with unmet expectations of a large majority of the population, create the potential for major social disruption and pose a serious internal security threat to the nation. The external threat, primarily from the instability of several of its neighbours, while less severe, is also present. The required increasing expenditures for both defense and police divert precious resources so urgently needed to redress the socio-economic issues.

It is in Canada's interest to continue to develop and expand both our tangible assistance and our understanding for South Africa. Significant investment opportunities exist, particularly in many aspects of modern technology. At this crucial juncture in its evolution, South Africa both deserves and requires support and above all a deeper appreciation on the part of the world community for the issues at stake.

A balanced perspective is essential. In our opinion, while perhaps more emphasis must be placed on the "cautious" we continue to stand by our earlier positive prognosis. This is a crucial moment in history to go forward, not to retreat in an attitude of uniformed negativity. Just as Canada played an important role in the liberation of South Africa during the last two decades we should recommit our determination to be even more helpful during the difficult but promising challenges of the next two decades.

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