South AfricaSouth Africa

Background Foundations of Apartheid Rise of Opposition Sanctioning of the State Transition to Democracy Legacies of Apartheid Implementing Reconstruction and Dev. Prgm Current Situation

BackgroundBackground

First Europeans – French and Dutch settlersKnown as “Boers” or farmers in AfrikaansFled religious persecution in mid-17 centuryDutch East India Co. in Table baySouthern Cape land is rich and fertileNatives: Khoikhoi (SW) & Xhosa (East)Constant fights; Europeans with guns

Background (cont.)Background (cont.)

British came for the location – refueling Est. British East India Company 1806, captured Cape Peninsula from Dutch 1867, diamond found in Vaal River Cecil Rhodes built international diamond cartel Gold found less than 20 years later By 1900, gold and diamonds made up 60% of export

Background (cont.)Background (cont.)

By 1911, gold mines account of 20% of economy and employed 215, 000 people

Tension bet. British and Dutch resulted in a full-scale Boer War until 1910.

British won decisively and Union of SA became a self-governing dominion of British Commonwealth.

Foundations of ApartheidFoundations of Apartheid

1909 Constitution – SA is a segregated democracy; only whites could vote

Bet. 1910-1948, SA ruled by relatively liberal group dominated by English speakers called United Party (UP)

White SA get majority of benefitsBlacks work in mining and domestic

Foundations of Apartheid (cont.)Foundations of Apartheid (cont.)

1948, predominantly Afrikaner National Party (NP) seize control from UP

Imposed “Apartheid” or “Apartness” in Afrikaans; shape history for next 50 years

4 racial groups: whites, coloreds (mixed race), Indian, Africans

Segregation; 1913 National Land Act – illegal for Blacks to purchase land outside designated areas

Foundations of Apartheid (cont.)Foundations of Apartheid (cont.)

Hendrik Verwoerd, a “philosopher” , “.. gives the Native an opportunity to develop what is his own, so he can have pride and self-respect as a Native, instead of being continually humiliated as a failed and imitation white”

Many Acts enacted to enforce segregation Blacks resettled to disguised “homelands” Required to carry passports and travelled hours

each day on cramped buses

Foundations of Apartheid (cont.)Foundations of Apartheid (cont.)

1912, 2 years after country formation, a small group of Blacks formed SA Native National Congress (SANCC) devoted to advancement of native population

Led by missionary-educated lawyers SANCC later became African National Congress

(ANC) Later ANC is joined by colored African Political

Organization, SA Indian Congress, and SA Communist Party

Rise of Opposition (cont.)Rise of Opposition (cont.)

ANC leaders -Oliver Tambo, Walter Sisulu, & Nelson Mandela- supported a large scale passive resistance campaign in 1952; adherence to non-violence

1955, ANC adopted Freedom Charter – “SA belongs to all who live in it, black or white, …. no government can justly claimed authority unless it is based on the will of the people”

NP track Mandela and Tambo, who were practicing law together in Johannesburg

Rise of Opposition (cont.)Rise of Opposition (cont.)

In 1963, 8 ANC members were convicted of high treason and sentenced to life imprisonment

Mandela spend 27 years in prison Notable personalities include: Helen Suzman, white professor who was sole

member of liberal Progressive Party in Parliament Desmond Tutu: Anglican Archbishop of Cape Town Stephen Biko, founder of Black Consciousness

Movement, died in police custody in 1977

Rise of Opposition (cont.)Rise of Opposition (cont.)

Sharpeville Massacre: police shot and killed 69 peaceful demonstrators led some conservatives to advocate violence

1976, security forces shot and killed to children in Soweto igniting a firestorm that led to 500-1000 deaths.

In the 70s, gold prices fell and oil prices hiked hitting SA hard; mining industry hit hard

By 1978, 5.1% of GDP or 21% of budget devoted to defense. SA was isolated.

Sanctioning the StateSanctioning the State

Chase Manhattan Bank refused to roll out SA loans

Sullivan Principles, a code of conduct for firms hoping to advance human rights and equal opportunity in SA

1986, over Pres. Reagan’s veto, passed Comprehensive Anti-Apartheid Act, boycotting nearly all US commerce with SA

1989, SA Pres. Botha suffered debilitating stroke. F. W. de Klerk, president of NP took over.

Transition to DemocracyTransition to Democracy

Before Botha’s stroke, he started covert meetings with Mandela. Bans on ANC lifted in 1990.

de Klerk and Mandela were aligned in short-term aims: saw political violence boiling and were determined to prevent either end of political spectrum from imposing its wished on the country

Agreed to conduct negotiating framework – the Convention for Democratic SA (CODESA)

Transition to Democracy (cont.)Transition to Democracy (cont.)

Nov. 1993, Population Registration Act ended; independent homelands reintegrated

Jan. 1994, all white parliament voted interim constitution establishing SA as a multicultural nation granting citizenship to non-whites.

1994, SA electorate voted choosing a parliament based on proportional representation and electing a Government of National Unity (GNU).

GNU committed to “power sharing” rather than “winner take all”. Any party that won 5% (20%) of national vote was guaranteed representation in the cabinet (deputy presidency).

Transition to Democracy (cont.)Transition to Democracy (cont.)

ANC got 63% of vote in April 1994 election Truth and Reconciliation Commission in 1995 ANC moved to deliver campaign promise of change and

redistribution with Reconstruction and Development Program (RDP)

Started with R2.5B in 1995 and R10B 1996. Est. business plan and build houses for millions of SA.

Pledge to build 1 million houses by 1999 and electrification of another 2.5 million homes.

Slow implementation. Value of Rand collapsed & President Mandela ended RDP in March, 1996.

Transition to Democracy (cont.)Transition to Democracy (cont.)

June 1996, a new macroeconomic strategy called Growth, Employment, and Redistribution (GEAR)

Obj.: 6% growth by 2000, 1.3 million jobs outside agriculture, fiscal deficit of 3% of GDP, privatization, and tariff reduction

Received tremendous opposition from all sides. 1999, Thabo Mbeki became President of SA.

Legacies of ApartheidLegacies of Apartheid

6 million SA blacks are unemployed9 million considered destituteOver 10 million blacks had no access to

running water23 million had no electricity60% black adults never attended schoolInfant mortality: 7/1000 (whites), 80/1000

(blacks)

Key Indicators (1/23/07)Key Indicators (1/23/07)From Economist Intelligence Unit (Source:Country data)From Economist Intelligence Unit (Source:Country data)

2006 2007 2008 2009 2010 2011Real GDP growth (%) 4.9 4.5 5.1 5.5 5.8 5.3Consumer inflation (av; %) 4.6 5.2 4.5 4.3 4.0 3.5Budget balance (% of GDP) -1.5 -2.0 -2.2 -2.1 -1.9 -1.8Current-account balance (% of GDP) -5.0 -4.6 -4.4 -4.0 -3.7 -2.5Com. banks' prime rate (av; %) 10.8 11.0 11.0 12.0 12.0 12.0Exchange rate R:US$ (av) 6.76 7.40 7.85 8.20 8.60 9.00

SourceSource

Remaking the Rainbow Nation: South Africa 2002, Rawi Abdelal, Debora Spar, and Katherine E. Cousins, Harvard Business School.