South Africa and Southern Africa

by Dr Greg Mills

Now that South Africa has enjoyed over a year of democratic government since the elections in April 1994, the 'rainbow nation' is expected to focus its attention, not only on the priority of internal nation-building, but on efforts at rebuilding the Southern African region. It is anticipated that South Africa will play a role in this by increased regional economic cooperation and closer integration through a variety of regional institutions. This involvement is expected to have a positive impact on the living conditions of the mass of the population in Southern Africa.

In this new era, away from the confines of the Cold War and the destabilising effects of apartheid, regional relations are now defined on the basis of an interdependent, mutually beneficial and non-hegemonic philosophy. Areas of common interest, whether in the economic or security domains, are seen as the catalyst for the states of Southern Africa to draw closer together and become collectively stronger. The non-hegemonic philosophy is in line with the ANC's position on foreign policy presented in their working document prior to the 1994 elections. This provided an insight into the future commitments and direction of the Government of National Unity. The document placed great emphasis on South Africa's role in the region and the African continent as a whole. In particular, it identified 'a special relationship with the peoples of Southern Africa all of whom have suffered under apartheid'. The focus was to be on balanced regional economic development aimed at transforming the 'exploitative and socially undesirable features of the existing regional economy'.

According to President Mandela, South Africa will, in this quest, have to exercise self-restraint and sensitivity in achieving the necessary balance between giving assistance to the region and regional domination. As Table 1 reveals, South Africa is clearly the most powerful state in Southern Africa. As such it has a strong international voice and will exert a decisive influence on the destiny of the region. Trade with African countries can now take place freely and openly. However, there are still both political and economic factors which inhibit regional prosperity. These include the marginalisation of Africa from the international mainstream, limits on the expansion of intra-African trade (due, among other things, to credit and infrastructural conditions), the continuing military and social insecurity in the region and, most importantly, the problems of transition that face South Africa as the dominant regional actor.

Southern Africa: population and GNP (1992)

South Africa's development challenges

Although a giant on the continent and in Southern Africa-where with under 40% of the population, it produces 80% of the region's economic product-South Africa is still a relatively small player in world terms. It ranks at the lower end of the 'upper-middle-income' countries, below Mauritius, Brazil, Mexico, Gabon, Greece and Portugal. If one takes the figures for economic growth per capita -generally seen as a leading indicator for stable political development-the picture for South and Southern Africa is not at all rosy. As Table 2 indicates, growth in sub-Saharan Africa has lagged well behind that of other regions, both developed and developing. And between 1980 and 1992, South Africa managed only 60% of the growth rate achieved by sub-Saharan countries as a whole.

The low growth rate of sub-Saharan Africa is undoubtedly linked to demographic trends. The population of the region has more than doubled from 294 million in 1970 to nearly 600 million in 1994. It is projected that the figure will rise to 940 million by 2010 and 1.36 billion by 2025. Southern Africa accounts for a consistent 25 % of these totals. As for South Africa itself, the population rose from 22.5 million in 1970 to around 41 million in 1994. The projections for 2010 and 2025 are 58.4 million and 73 million respectively. Although mankind's adaptability, combined with new technologies in areas such as plant breeding and fertilisers, have kept the means of subsistence ahead of population growth in South Africa, there is justification for a Malthusian pessimism about its chances of staying ahead.

Given the decline in the availability of natural resources per capita as a result of this increase in population, some radical changes are necessary if the socioeconomic situation is to be stabilised. Assuming the formula of the Asian countries and other 'success stories' is adopted, this should rely on export-driven growth. Technological skills are, of course, required for this to happen. Yet South Africa has a deplorable lack of technically skilled, educated workers. This is a debilitating legacy of apartheid and of Bantu Education in particular. Although, in the past, the government spent a relatively large amount on schooling by global standards (the 1992-93 figure was 5.4% of GDP), this has been racially biased. In 1992, spending on whites was 3.5 times that on blacks. And the prospects of achieving expenditure parity at the higher level are slight. In South Africa in 1993, an estimated 12.5 million people were defined as illiterate.

Education is related both to skewed income distribution patterns and low productivity ratios in South Africa. While the standard of living indicators for the white, coloured and Asian sectors of the population compare favourably with those of developed countries, the figures for black South Africans (around 75% of the total) are among the worst in the world. Around half of the black population is below the age of 20, living in an environment where there are high expectations but a lack of economic development, and hence of opportunities. In 1990, some 16 million South Africans lived below the breadline figure of R600 (ECU 125) per family per month. Most of these people were living in rural areas.

It is estimated that an annual growth rate of less than 4.0% will not create sufficient jobs to keep pace with the population increase. Around 400 000 people are entering the labour market each year, yet between 1985 and 1989, only 31 000 jobs were created annually. 95% of these were in the formal sector. By contrast, a shortfall of 920 000 skilled workers is forecast by the year 2005, although there will be a surplus of 11.5 million unskilled or semi-skilled workers. South Africa's unemployment rate for 1994 was 32.6%, according to the first-ever offficial figures issued in March. Unofficial estimates (including from Government sources such as the Foreign Ministry) have put the figure at 45-50%. According to the official statistics, about 1.5 million people were employed in the informal economy while some 4.7 million people indicated they were unemployed.

Productivity is an indirect function of skills, technology, capital and labour, taken in combination. Against such a poor educational backdrop, it is not surprising to find that labour productivity has improved only slowly in South Africa- at an average of about 0.4% and 0.5% in the 1970s and 1980s respectively. Wage increases have been much higher - around 10% per annum in the 1970s and 16% during the 1980s. The result, despite abundant labour reserves, was that South Africa became increasingly capital intensive and labour-saving from the 1970s onwards, and unemployment went up. This is an important factor for the South African government as it seeks to encourage investment in areas that ideally should create jobs and simultaneously generate export-driven wealth.

Performance indicators in the world economy

The African burden

South Africa's future ties with the international global economy, which are crucial in seeking to surmount the above mentioned structural difficulties, are inescapably linked to international perceptions of the region. The question that investors ask is-'are these stable and profitable places in which to invest.' In this context, Nelson Mandela has observed that 'South Africa cannot escape its African destiny'. The country does, however, benefit from an increasing tracing relationship within the continent. According to Raymond Suttner, who chairs the South Africa Parliamentary Portfolio Committee on Foreign Affairs, South African exports to the rest of Africa amounted to 31.7% of the country's total exports in 1993. During the first half of 1994 there was a 30% increase in such trade to a projected R5 billion. But this positive situation is still offset to a large extent by South Africa's geographic location and perceptions of the continent as a whole. Africa has been described by some as 'The Third World's Third World' - regarded as marginal in the international economy and incapable of solving its own difficulties. Unfortunately South Africa, if only by dint of geography, is part of that mindset.

Together, South and Southern Africa represent a contradiction of frustration and hope. A prosperous Southern Africa would obviously benefit South Africa as it seeks to expand trading links, partners and profits. Yet as Angola and Mozambique struggle to get back into their independence starting blocks, that vision is some way off. Table 3 gives some indication of the problems facing the region in its efforts to get to grips with life after apartheid.

Without wider regional prosperity, the gains for South Africa are likely to be small, and the extra burdens high. By way of example, the cost of dealing with illegal immigrants to South Africa from the region was estimated at more than R200m in 1994. In the same year, it was projected that these costs would rise to R1bn by the year 2000. This figure has since been revised upwards to an estimated R4bn. This is measured in terms of the costs of clothing, housing, feeding and educating the migrants. Add to this the costs related to smuggling, whether of drugs, vehicles, weapons or general contraband (which alone represents an annual loss of around R1bn in uncollected customs revenue) and it is clear that South Africa cannot afford to ignore the plight of the wider region. The number of official refugees in South Africa is only around 10 000, but illegal migration from neighbouring states rose from 45 000 in 1988 to nearly 100000 in 1993. Estimates of the total number of such migrants in the country vary widely- from 2 million to 9 million (mainly Mozambicans) - but the South African Police Service believes that the latter is the more accurate figure.

This influx has predictably, provoked xenophobic reactions among some South Africans, and this is likely to have political implications for the ANC. In developing a policy response, the government obviously has to be mindful of the impact on their constituencies. They may react to the crisis by strengthening immigration controls, by addressing the root causes or perhaps a combination of the two. In any event, they are likely to favour the cheapest option. It could be that, far being a politically incorrect solution, the idea of a 'fortress South Africa' will become something of a socio-economic necessity. Many initiatives have been put forward by South Africans, neighbouring states and the international community to address some of the insecurities present in the region. These include:

-The so-called 'British' initiative mooted by John Major during his visit last September when he called for new mechanisms to head off conflicts before they become unstoppable;
-The OAU Mechanism for Conflict Prevention, Management and Resolution, formally established at the Tunis Summit in 1994, which focuses on preventive diplomacy and crisis management;
-The Association of Southern African States established as part of the Southern African Development Community (SADC) grouping.
-The Inter-State Defence and Security Conference;
-The SADC sector on Political Cooperation, Democracy, Peace and Security.

All these so-called security mechanisms are designed to work in tandem with the development thrust of regional organisations such as SADC. As the new South African National Defence Force reorganises itself and strives to create a new image externally and domestically, it is likely that this arm of the government will become involved outside the Republic's borders: in peace support missions, disaster relief, training missions, and inevitably, in joint military operations.

South Africa and its neighbours: the socio-economic picture

The RDP

It is clear that something extraordinary is needed for South Africa to break out of the straightjacket. The government's chosen solution is the Reconstruction and Development Programme (RDP) which sets out to transform South Africa and make amends for the years of apartheid. This will be done through the building of some 1 million houses, the electrification of 2.5 million dwellings, the provision of free and compulsory education for all children, the creation of 2.5 million jobs, and the redistribution of 30% of all arable land- all within the next five years.

The management of the RDP is going to be crucial, as South Africa strives to meet short-term demands through consumption while seeking to portray an image of financial rectitude. If one has to borrow heavily, then one must spend wisely and ensure transparency and accountability every step of the way. This will be difficult for a government now largely representative of the very poor, among whom high expectations have created a culture of entitlement.

Given the insecurity affecting both South and Southern Africa, which is largely based on economic problems, the impact of the RDP across South Africa's borders will be central in creating conditions of sustainable economic development in the region. Integration through SADC, the Southern Africa Customs Union, the proposed Common Market for Eastern and Southern Africa (Comesa), and a variety of special bilateral trade relationships could assist in this process. Of course, while South Africa's economic dominance will inevitably shape the region's fortunes, the neighbouring states also have a key role in determining their own future. They are not passive spectators in an international game involving South Africa and the global community. They should be actively seeking to turn their economies into viable trading entities that are attractive to outside investors.

It is clear that South Africa has overcome some big challenges but in many respects, the most difficult ones still lie ahead. It must capitalise on both the domestic and external goodwill generated by the success of its transition, in confronting its own difficulties. In this endeavour, the fortunes of South Africa and the Southern African region are closely intertwined.