south africa - international university of japan · in 1992 mr de klerk won a firm mandate for...

Country Profile 2004

South AfricaThis Country Profile is a reference work, analysing thecountry's history, politics, infrastructure and economy. It isrevised and updated annually. The Economist IntelligenceUnit's Country Reports analyse current trends and provide atwo-year forecast.

The full publishing schedule for Country Profiles is nowavailable on our website at http://www.eiu.com/schedule

The Economist Intelligence Unit15 Regent St, London SW1Y 4LRUnited Kingdom

The Economist Intelligence Unit

The Economist Intelligence Unit is a specialist publisher serving companies establishing and managingoperations across national borders. For over 50 years it has been a source of information on businessdevelopments, economic and political trends, government regulations and corporate practice worldwide.

The Economist Intelligence Unit delivers its information in four ways: through its digital portfolio, where itslatest analysis is updated daily; through printed subscription products ranging from newsletters to annualreference works; through research reports; and by organising seminars and presentations. The firm is amember of The Economist Group.

LondonThe Economist Intelligence Unit15 Regent StLondonSW1Y 4LRUnited KingdomTel: (44.20) 7830 1007Fax: (44.20) 7830 1023E-mail: [email protected]

New YorkThe Economist Intelligence UnitThe Economist Building111 West 57th StreetNew YorkNY 10019, USTel: (1.212) 554 0600Fax: (1.212) 586 0248E-mail: [email protected]

Hong KongThe Economist Intelligence Unit60/F, Central Plaza18 Harbour RoadWanchaiHong KongTel: (852) 2585 3888Fax: (852) 2802 7638E-mail: [email protected]

Website: www.eiu.com

Electronic deliveryThis publication can be viewed by subscribing online at www.store.eiu.com

Reports are also available in various other electronic formats, such as CD-ROM, Lotus Notes, on-line databasesand as direct feeds to corporate intranets. For further information, please contact your nearest EconomistIntelligence Unit office

Copyright© 2004 The Economist Intelligence Unit Limited. All rights reserved. Neither this publication norany part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means,electronic, mechanical, photocopying, recording or otherwise, without the prior permissionof The Economist Intelligence Unit Limited.

All information in this report is verified to the best of the author's and the publisher's ability. However, theEconomist Intelligence Unit does not accept responsibility for any loss arising from reliance on it.

ISSN 0269-8153

Symbols for tables"n/a" means not available; "–" means not applicable

Printed and distributed by Patersons Dartford, Questor Trade Park, 151 Avery Way, Dartford, Kent DA1 1JS, UK.

��

��

��

��

�

��

��

��

�

��

��

�

��

��

��

��

��

�

��

��

��

��

��

��

��

��

��

��

��

��

��

� �

!��"

��

��

�

��

��

�#

� �

�

$��

��

��

��

�#

� �

�

$��

��

��

��

��

�!��

�

��

�

��

��

��

�

��

��

��

��

��

��

��

�!��

��

��

��

��

��

��

��

��

��

��%�

&�

��%�

&�

'��

%�(

�

��

��

��

��

��

��

��

��

��

��

��

��

��!

��

� �

��

��!

��

� �

��

�

�&)

��

��

��!

��

� �

��

��

��

��

�

��

!

�

��

��

��

��

�

�

��

!

�

��

��

��

��!��

��!

�

)�

�)

��

�

��

� �

��

��

��!��

��!

�

"��!��

�"��!��

�

��

��

��

��

��

��

��

�

��

�

��

��

�

#��

$��#

��

$��#

��

��

��

��

��

%#��

��#��

��

��

��&

��

%��

��

'��#

��

(��"��#

)� �

��

��

��

�

��#��

��

��

%��

��

!

��

��!

��

��!

��

*

��

�%�

%�

��

!

��

�#��

*

��

��

��

%��

��!

�

��!

�

+��

��

'��#

��

(��"��#

)� �

��

��

��

�

��#��

��

��

'��

��

�

��

��

��

��#

��

��

!��

(�

�

��

"��

��

��#��

!

��!

�

��

��

"��

�

��!

�

��

��

"��

�

+��,��

+��

�,�

�+�

��,�

�

��

��"��

�

��

��

��

��"��

�

��

��

�&��

�

(

#��

(

#��

�

!

�

(��

�&

��

��!

�

�

��

!

�

)

��"

�

�

!

�

(��

�&

��

�#

��

��!

�

�

��

!

�

)

��"

�

"��

�"��

�"��

#

��!

��

��!

��

��#

(�

��

�&��!��

$�#��

��

!��

��#

��!��

�

(�

�

��

"��

��

�#&��

��

��#

&��

��

�

��

�

(��

��

(��

��

��

��

��

��

�

��

�#

��!

��#

!�

�

��

�#

��!

��#

!�

�&)

��

��

)�

�)

��

�

�

�(

�+�

��

,�

�%�

�

��

�%�

�

'�

��

(��%�

�

'�

��

��

%�

�

�'�

��

*

��

�%�

%�

��

%�

(��%

�

�%�

�

�

�%�

�

�

��

��

��

��

��

��

��

��

��

��

�%�

�*

&'�

�� $

�� $

�

-.�

�%�"�

��

"%�%

�%�.�

.%

��-%��.*

��

�"%-.�

%��

�"%-.�

%��

��

��

/�#

0//

1//

2//

3//

/#��

0//

1//

4 �

��

��#��.�

��

��#��

1//3

�� !!"

��

��

��

.��

��

!�

��

��

,��

!�

��

.��

��

��&

��

+�&��

��5��

��

��

��

��

��#�

�

��

��

Country Profile 2004 www.eiu.com © The Economist Intelligence Unit Limited 2004

��

��

��

� � � ��

��

��

� �!��"

#��

��!��$�

%��

%��

��

&��

'��!��

(��

��

� �)�� )�� *)�� )�� +)��

��

��!��$�

'��!��

%��

%��

��

(��

� �!��"

#��

��

&��

��

� + �� + �� +

��

'��!��

��

��

#��

� �!��"

&��

��

��!��$�

%��

(��

%��

,� ,� � � � � �

%��

��

� �!��"

(��

��

#��

&��

��

��

%��

'��!��

��!��$�

�� - ��) .�� .��

��

�� - ��) .�� .��

��

��

��

��

��

��

��

South Africa 1

© The Economist Intelligence Unit Limited 2004 www.eiu.com Country Profile 2004

Contents

South Africa

3 Basic data

4 Politics4 Political background7 Recent political developments11 Constitution, institutions and administration13 Political forces17 International relations and defence

21 Resources and infrastructure21 Population24 Education25 Health28 Natural resources and the environment29 Transport, communications and the Internet32 Energy provision

34 The economy34 Economic structure35 Economic policy42 Economic performance44 Regional trends

46 Economic sectors46 Agriculture47 Mining and semi-processing50 Manufacturing52 Construction52 Financial services55 Other services

57 The external sector57 Trade in goods58 Invisibles and the current account58 Capital flows and foreign debt60 Foreign reserves and the exchange rate

63 Regional overview63 Membership of organisations

71 Appendices71 Sources of information73 Reference tables73 Population73 Labour force74 Government finances74 Money supply and interest rates

2 South Africa


74 Gross domestic product75 Gross domestic product by expenditure75 Gross domestic product by sector75 Prices and earnings76 Agricultural production76 Manufacturing production76 Construction statistics77 Stockmarket indicators77 Banking statistics78 Main trading partners78 Balance of payments, IMF estimates79 Balance of payments, national estimates79 External debt, national estimates80 Net official development assistance80 Foreign reserves80 Exchange rates

South Africa 3


South Africa

Basic data

1,219,090 sq km (Cape Town: 169,580; Free State: 129,480; Gauteng: 17,010;KwaZulu-Natal: 92,100; Limpopo: 123,910; Mpumalanga: 79,490; Northern Cape:361,830; North West: 116,320; and Western Cape: 116,320)

44.8m (October 2001 census)

Population, '000 (1991 official estimates); metropolitan areas:

Cape Peninsula 2,185 Pretoria (capital) 1,080Johannesburg/Randburg 1,916 Port Elizabeth/Uitenhage 854Durban/Pinetown 1,137 Bloemfontein 300

Temperate, warm and sunny.

Hottest month, January, 14-26°C (average daily minimum and maximum);coldest month, July, 4-16°C; driest month, June, 6 mm average rainfall; wettestmonth, January, 150 mm

Hottest month, February, 16-26°C (average daily minimum and maximum);coldest month, July, 7-17°C; driest month, February, 10 mm average rainfall;wettest month, July, 92 mm

Official languages: Afrikaans, English, IsiNdebele, Northern Sotho (Sepedi),Sesotho, Swazi, Xitsonga, Setswana, Tshivenda, IsiXhosa and IsiZulu; otherAfrican, Asian and European languages are also spoken

Metric system

Rand (R)=100 cents; average exchange rate in 2003: R7.56:US$1; exchange rate onNovember 24th 2004: R6.5:US$1

April-March

2 hours ahead of GMT

January 1st (New Year's Day), March 21st (Human Rights Day), Good Friday,Easter Monday, April 27th (Freedom Day), May 1st (Workers' Day), June 16th-17th(Youth Days), August 9th (National Women's Day), September 24th (HeritageDay), December 16th (Day of Reconciliation), December 25th (Christmas Day),December 26th (Day of Goodwill). If any of these days falls on a Sunday, thefollowing Monday becomes a public holiday

Land area

Population

Climate

Main towns

Weather in Johannesburg(altitude 1,769 metres)

Weather in Cape Town(altitude 17 metres)

Languages

Measures

Currency

Fiscal year

Time

Public holidays

4 South Africa


Politics

After centuries of white rule, South Africa held its first all-race election inApril 1994, which was won by the African National Congress (ANC). The party'sleader, Nelson Mandela, became president. The ANC increased its share of thevote in the second all-race election in June 1999. Thabo Mbeki, who had replacedMr Mandela as ANC leader in December 1997, was chosen as the new presidentand formed a national government in partnership with the Zulu-based InkathaFreedom Party. South Africa's third multiracial general election was heldsuccessfully in April 2004 and produced a landslide victory for the ANC, whichnow has the two-thirds majority in parliament that in theory enables itunilaterally to change the constitution. Some opposition is provided by theDemocratic Alliance (DA), but the ANC basically has a free hand, meaning thatthe most significant policy debates are conducted within the party rather thanat the broader level of parliament. This presents the country with an imageproblem abroad; however benevolent and democratic, one-party states areviewed with suspicion, particularly in Africa.

Political background

F W de Klerk, who became president in 1989, set about trying to save Afrikanerinterests while dismantling apartheid structures. In February 1990 he lifted theban on the African National Congress (ANC) and other proscribed organis-ations and released political prisoners, most significantly the ANC leader,Nelson Mandela, who had spent 27 years in prison. In 1992 Mr de Klerk won afirm mandate for change in a whites-only referendum, although it wasMr Mandela's demanding but conciliatory style that dominated the negoti-ations, institutionalised in the Convention for a Democratic South Africa. Themain challenge to the transition process came from the Inkatha Freedom Party(IFP), the ruling party in the defunct KwaZulu homeland, which had beenengaged there in an unofficial war with the ANC since the mid-1980s. The warspread to the huge townships around Johannesburg and Pretoria, which werehit by violence during much of the early 1990s.

Despite threats to boycott the general election in 1994, the IFP did take part atthe last minute. The election, held in April, did not bring the violence that hadbeen widely feared; the turnout in most areas was high and the buoyant publicmood carried the voting over a number of organisational hurdles. The finalresults gave the ANC nearly 63% of the vote, leaving slightly more than 20% tothe National Party (NP) and just over 10% to the IFP. This appeared fair and,most significantly, ensured that the IFP had the 5% of the vote required tosecure cabinet representation. The mainly white liberal Democratic Party (DP)and the Pan-Africanist Congress (one of the historical anti-apartheidmovements) failed to win 5% of the votes; the white Conservative Partyboycotted the election.

The end of apartheid

The 1994 election

A new political era

South Africa 5


Mr Mandela was elected president in May 1994 at the first sitting of the all-raceNational Assembly. A government of national unity (GNU) was formed,bringing together the ANC, the NP and the IFP, which was to govern SouthAfrica through the first five years of its transition. Thabo Mbeki of the ANCand Mr de Klerk were made first and second deputy presidents respectively.Mr Mandela's commitment to national reconciliation resulted in a delicatetruce with elements of the white right wing, and allowed the leader of the IFP,Chief Mangosuthu Buthelezi, to remain in his cabinet post despite controversialoutbursts. The ANC's position was strengthened by local council elections inNovember 1995, at which it won 64% of the vote (it also strengthened itsposition in the local elections in KwaZulu-Natal by performing well in urbanareas). The ANC quickly became the dominant partner in the GNU over the NPand the IFP, and Mr de Klerk led the NP out of the coalition in July 1996. TheIFP also threatened to leave the GNU before the 1999 election, but did not carryout the threat and remained a partner in government with the ANC throughoutits second term in office.

Important recent events

April 1994

The African National Congress (ANC) wins a clear majority in the country's first fullydemocratic general election; the new National Assembly elects Nelson Mandela aspresident, and the three-party Government of National Unity (GNU) coalition isformed.

November 1995

The ANC wins a majority in most local councils in the country's first fullydemocratic local elections.

December 1997

The ANC congress elects Thabo Mbeki as head of the party, to replace Mr Mandela,and Jacob Zuma as deputy head.

June 1999

South Africa's second multiracial general election is won easily by the ANC. TheDemocratic Party (DP) becomes the official opposition. Mr Mbeki is sworn in aspresident and the coalition with the Inkatha Freedom Party (IFP) is renewed.

June 2000

The DP merges with the New National Party (NNP) and the Federal Alliance to formthe Democratic Alliance (DA). The coalition is led by Tony Leon. However, inOctober 2001 the NNP withdraws from the DA and enters into a co-operativerelationship with the ANC, giving the two parties control of one of the mostimportant local authorities in the country, Cape Town.

July 2001

The Organisation of African Unity (OAU) summit in Lusaka approves thepresentation of Mr Mbeki's Millennium Africa Plan (backed by the presidents ofAlgeria and Nigeria and amalgamated with the Omega Plan of the Senegalesepresident, Abdoulaye Wade) to the G8 summit in Genoa, where it receives

The government of nationalunity

6 South Africa


overwhelming support. A high-level liaison officer is appointed to work withcommitted African leaders to develop a concrete plan of action, renamed the NewPartnership for Africa's Development (Nepad). This is presented to the G8 summit inCanada in 2002, committing G8 countries to assisting Africa to achieve the goals setout by Nepad.

June 2002

South Africa's parliament passes the controversial Mineral and Petroleum ResourcesDevelopment Bill. The government—backed by black-empowerment groups, tradeunions and various left-wing political lobbies—regards the legislation as a key part ofits transformation and black empowerment policies. The legislation is designed toensure that "good-quality ore currently in the hands of the big mining houses passesinto black hands" within a decade.

July 2002

Spearheaded by Mr Mbeki, the African Union (AU) is formally launched, replacingthe OAU, which was founded in 1963. The AU will act as the umbrella institutionalstructure for Nepad. Nepad will become a cornerstone of the country's relationswith the outside world, and Mr Mbeki has pinned his hopes on its success. Itssuccess or failure will be increasingly tied to South Africa's ability to make thingswork in Africa, both politically and economically. However, South Africa's failure totackle the debacle in neighbouring Zimbabwe is highly damaging to its efforts toproject a self-help culture from Africa.

August 2003

The government finally announces a plan to deal with the HIV/AIDS crisis.However, implementation remains deficient: by March 2004 only 2,700 suffererswere receiving anti-retroviral treatment, against a target of 53,000.

September 2003

The director of public prosecutions decides to press corruption charges against theformer financial adviser of the deputy president, Mr Zuma. Although Mr Zuma hasnot been charged directly, he is indirectly implicated in the charges. The policeinvestigation is centred on whether Mr Zuma had solicited bribes from a Frencharms contractor, Thomson CSF (now called Thales), one of the main companiesinvolved in a R43.8bn (US$7.2bn) arms deal in December 1999.

March 2004

The government's policy towards black economic empowerment (BEE) moves aheadwith the final version of the charter for the mining industry. Leading industry figuressay that the initiative will reduce the sector's "total value" by 1.5% over the first fiveyears because of the costs of compliance.

April 2004

Elections for the National Assembly are held, attracting a higher than anticipatedturnout among registered voters, of 76.7%. The ANC wins 279 seats, the DA takes 50and the IFP captures 28. The IFP leader, Chief Mangosuthu Buthelezi, retires fromcabinet and his previous post as home affairs minister.

South Africa 7


June 2004

Mr Mbeki's claim to be able to broker a resumption of talks between theZimbabwean government of Robert Mugabe and the opposition fails to produceresults by the end of June. The ANC is under sustained pressure to help to end thepolitical crisis in its neighbour, but Mr Mbeki remains reticent to put pressure onMr Mugabe, despite international investor warnings that the situation is damaging toSouth Africa and the subregion.

September 2004

The NNP, the much-mutated successor to the apartheid-era National Party, effectivelycollapses following the decision of its leader, Marthinus van Schalkwyk, to join theANC. The move leaves the DA as the only significant independent opposition.

Recent political developments

Under Mr Mbeki's second-term (1999-2004) the macroeconomic fundamentalsimproved even further and South Africa became increasingly seen as thepremier credit risk on the continent. Progress has been made in tackling manyof the structural defects that affect social delivery, in particular the financialmanagement capacity of the lower tiers of government, and this will be apriority for the current administration, elected in April 2004, given its strategicshift to a more "Keynesian" policy stance favouring state spending to createjobs. The ANC is more than comfortable with private-sector enterprise and,indeed, many leading figures within the movement have become extremelywealthy from the opportunities on offer. However, its problem is that itsmacroeconomic policies in areas such as trade liberalisation and its justifieddecision not to use the exchange rate as a tool to gain passing competitiveadvantage have left it politically exposed to its core base of support, namelypoor black unskilled labour, which is struggling to find work in a rapidlytransforming economy.

Despite its undoubted achievements—ten years ago a frequently espoused viewwas that the country would degenerate into racial civil war—the reputation ofthe Mbeki administration both at home and abroad is blighted by its failure todeal decisively with the country's HIV/AIDS epidemic and by Mr Mbeki's ownhighly controversial stance on the issue, which has in effect led him towithdraw from any debate on the problem. In the past he has questioned thelink between HIV/AIDS and sexual activity, offering instead the view that thedisease is fundamentally a manifestation of poverty. The high level ofunemployment, variously estimated at between 30% and 60%, depending onhow informal-sector work is counted, is another key domestic challenge for thegovernment, which has moved to an economic policy that emphasises the statein job creation rather than the private sector.

Mr Mbeki's international reputation has also been damaged by his conciliatorystance towards the Zimbabwean president, Robert Mugabe. His leadership rolein the New Partnership for Africa's Development (Nepad, the ambitious pan-African development initiative championed by Mr Mbeki) in 2002 has,nevertheless, made him a significant figure on the international stage. Foreign

Mixed performance in thesecond term

A number of challengesremain

8 South Africa


policy is generally regarded as the president's favourite realm of operation andis likely to remain important in the coming years. At the same time, however,the lack of progress in resolving the conflict in Zimbabwe has dampened EUand US enthusiasm for Nepad, which has yet to really gather speed.

As expected by the Economist Intelligence Unit, the ANC overwhelminglydefeated its opponents in the national election on April 14th 2004. The ANCmanaged to secure a two-thirds majority of the votes, upping its share from66.4% in 1999 to 69.7%. Total votes cast as a proportion of total registered votersresulted in a 76.7% poll but, when the number of eligible voters is considered,only about 58% turned out. The election was generally considered "free andfair", with only a few isolated cases of intimidation and no violence, even inKwaZulu-Natal, which had been a problem province in the past with clashesbetween the ANC and the IFP.

The votes received by both the ANC and the combined opposition have fallensince 1994—the ANC from 12.2m in 1994 to 10.9m in 2004 and the combinedvotes of other parties represented in parliament from 7.1m in 1994 to 4.5m in2004. Opposition parties have, therefore, lost more ground than the ANC since1994. However, between 1999 and 2004 the ANC gained 277,000 votes and theDA 404,000 votes, with the new Independent Democrats (ID) registering270,000 votes (1.7% of the poll). Losers were the New National Party (NNP), theIFP and United Democratic Movement (UDM). The DA consolidated its positionas the main opposition party, obtaining 12.4% of the votes as against 9.6% in1999. The IFP lost ground, polling 7% as against 8.6% in 1999, while the NNP (thesuccessor to the National Party, which ruled South Africa for 46 years from1948-94) almost disappeared, its support falling from 6.9% in 1999 to 1.7%. TheUDM slid to 2.3% from 3.4% in the previous election, but still claimed 9 seats.

National Assembly election results, 2004Votes % Seats

African National Congress 10,878,251 69.68 279

Democratic Alliance 1,931,201 12.37 50Inkatha Freedom Party 1,088,664 6.97 28

United Democratic Movement 355,717 2.28 9Independent Democrats 269,765 1.73 7

New National Party 257,824 1.65 7African Christian Democratic Party 250,272 1.60 6Freedom Front Plus 139,465 0.89 4

Pan-Africanist Congress of Azania 113,512 0.73 3United Christian Democratic Party 117,792 0.75 3

Minority Front 55,267 0.35 2Azanian People's Organisation 41,776 0.27 2Others 113,161 0.73 0

Total 15,612,667 100.0 400Spoilt papers 250,887

Total votes 15,863,554Registered voters 20,674,926

% poll 76.7

Source: Economist Intelligence Unit.

ANC wins two-thirds majorityin 2004

South Africa 9


For the first time the ANC is in control, either singly or as the major coalitionpartner, in all nine provinces. As expected, it easily retained the seven provincesthat it had previously controlled, but emerged for the first time as the singlestrongest party in KwaZulu-Natal and the Western Cape. In KwaZulu-Natal theANC won 38 of the 80 seats but, with the support of the Minority Front, theAfrican Christian Democratic Party (ACDP) and the UDM, was able to lead acoalition with 43 seats as opposed to the 37 of the IFP-DA coalition. In theWestern Cape the ANC won 19 seats but, in coalition with the NNP, was able tocommand 24 seats in the 42-seat legislature. The losers were the IFP inKwaZulu-Natal and the NNP in the Western Cape.

The ANC's strongest performances were in Limpopo (89.2%), Mpumalanga(86.3%), Free State (81.8%), North West (80.7%) and Eastern Cape (79.3%), and itsweakest in the Western Cape (45.3%) and KwaZulu-Natal (47%). The DAperformed best in the Western Cape (27.1%), Gauteng (20.9%) and NorthernCape (11.1%). The support base of other parties tended to be strongly regional—the IFP captured 36.9% of the vote in KwaZulu-Natal, the NNP 10.9% in theWestern Cape and the UDM 9.2% in the Eastern Cape, where it is the officialopposition. The United Christian Democratic Party (UCDP), a relic of Bantustanpolitics, contested the election only in North West Province, where it is theofficial opposition.

Provincial legislatures, seat allocationParty EC FS Gaut KZN Limp Mpum NC NW WCAfrican National Congress 51 25 51 38 45 27 21 27 19

Democratic Alliance 5 3 15 7 2 2 3 2 12Inkatha Freedom Party 0 0 2 30 0 0 0 0 0

United Democratic Movement 6 0 1 1 1 0 0 0 1Independent Democrats 0 0 1 0 0 0 2 0 3New National Party 0 0 0 0 0 0 2 0 5

African Christian Democratic Party 0 1 1 2 1 0 1 0 2Freedom Front Plus 0 1 1 0 0 1 1 1 0

Pan Africanist Congress of Azania 1 0 1 0 0 0 0 0 0United Christian Democratic Party 0 0 0 0 0 0 0 3 0

Minority Front 0 0 0 2 0 0 0 0 0Total 63 30 73 80 49 30 30 33 42

Note. Eastern Cape (EC); Free State (FS); Gauteng (Gaut); KZN (KwaZulu-Natal); Limpopo (Limp);Mpumalanga (Mpum); Northern Cape (NC); North West (NW); Western Cape (WC).

Mr Mbeki has increased the size of the cabinet by one ministry and eightdeputies. Instead of a radical overhaul, the president opted to maintain thestatus quo in portfolios related to service delivery and poverty alleviation. TheMinistry of Arts, Culture, Science and Technology has been split into two, andthe cabinet now represents an unwieldy body of 30 people. The cabinet, likethe ANC, is a broad church, and now also includes members from the NNP, theAzanian People's Organisation and the UDM. Notable, however, was thedropping of two members of the IFP, including that party's leader, Mr Buthelezi.The number of deputies has been increased from 13 to 21. Above all, Xhosasremain the dominant ethnic group in the cabinet, constituting 37% of ministersand deputy ministers. This is likely to continue to be unpopular with the ANC

The ANC now controls all nineprovinces

The ANC gains ground in anumber of regions

The cabinet is appointed

10 South Africa


in other regions that regard themselves as under-represented. Two ministerswere appointed from outside the National Assembly—Mosibudi Mangena andMakhenkhesi Stofile. More than two-thirds of the previous cabinet wereretained, 15 in their same portfolios, and this has led to some speculation thatthere will be further changes during the next five years, as some seniorministers are expected to leave for new jobs.

These may include Trevor Manuel (the minister of finance) and, somewhat lesslikely, Alec Erwin (the minister of public enterprises). Mr Erwin's move from theMinistry of Trade and Industry is particularly significant, as economic policy isshifting towards emphasising parastatals as a major engine of economic growthand job creation. Also important is the move of Maria Ramos, the highlyrespected former deputy minister of finance, to head the sprawling statetransportation company, Transnet, with a brief to radically improve itshistorically poor performance, particularly in terms of mass transit. In turn,Mr Manuel is frequently tipped for appointment to a major internationalposition, possibly within either the IMF or the World Bank.

The "Coalition for Change", under which the DA and the IFP co-operated tofight the 2004 election, is no longer in existence. This is not surprising, since thetwo parties have always had different perceptions about their role in SouthAfrican politics. While the DA aims to form a strong opposition to the ANC, theIFP was prepared to oppose the ANC in KwaZulu-Natal in the hope of rulingthe province, but to broadly co-operate with the ANC at national level. TheANC, by offering the IFP seats in the provincial cabinet, undermined thecoalition, and now both the DA and the IFP lay claim to being the officialopposition in KwaZulu-Natal. The DA's leader, Tony Leon, and senior politiciansadopted an abrasive stance during the election, criticising not only the ANC butalso other opposition parties, notably Patricia de Lille's ID, causing the DA tolose some support (both white and coloured) to the new party.

On August 7th 2004 the leader of the NNP, Marthinus van Schalkwyk,announced his intention of joining the ANC. The NNP fought the April electionunder a co-operation agreement with the ANC, and Mr van Schalkwyk'sdecision is no surprise, as he was rewarded with a cabinet position as ministerof environmental affairs and tourism. He stated that he would advise othermembers of his party to do the same, effectively implying that the NNP shoulddissolve and be absorbed by the ANC. However, the constitution provides forelected representatives to change parties only during floor-crossing periods,which means that provincial and parliamentary representatives will have towait until 2005. The ANC and the NNP have reached an agreement that jointmembership may prevail in the meantime, but with dual members fallingunder the discipline of the ANC. The ANC and NNP leaderships are to embarkon a national campaign to persuade elected members to join the ANC, but itremains to be seen whether other NNP representatives in the various levels ofgovernment will elect to preserve their positions by doing so or to remain inopposition. It is clear, though, that the party that ruled South Africa from 1948to 1994, and that implemented apartheid, has come to the end of anysignificant role in South African politics.

Opposition parties face anuncertain future

The NNP leader joins the ANC

South Africa 11


"Floor-crossing" by opposition members strengthens the ANC's position

In 2003 South Africa introduced legislation to allow elected politicians to "floorcross" to different parties during specified windows of time. In a Westminster-stylepolitical system such a concept is somewhat alien, but is one that clearly benefits theAfrican National Congress (ANC), which is the dominant party by far. At themunicipal level the window opened in September 2004, close on the heels of thedecision of the New National Party (NNP) leadership to submit, in effect, to ANCcontrol. The Independent Electoral Commission reported that three-quarters of NNPlocal councillors had defected in September 2004, most of them to the ANC, leavingonly 60 out of the previous total of 351 still under the NNP umbrella. The DemocraticAlliance (DA) has lost 44 councillors but gained 67, leaving it with a net gain of 23.While important, the shift in local government allegiances needs to be viewed atleast partly as moves by municipal officials to ride the prevailing tide of politics.Much more important will be the opening of the window for parliamentary andprovincial defections in September 2005. At that time, the NNP will almost certainlywither into insignificance at the national level, and may even formally dissolve.

Constitution, institutions and administration

Before the 1994 general election, under the apartheid system, voting wasrestricted largely to whites. With the dawn of a new political era, an interimconstitution was drawn up in multiparty talks and enacted in December 1993by the then white parliament. It provided for an elected Constituent Assembly(parliament) under the executive leadership of the state president, consisting ofa 400-seat House of Assembly (the lower house) elected by proportionalrepresentation and a 90-seat Senate (the upper house) made up ofrepresentatives from the nine provinces, which incorporated the black"homelands" of the apartheid era.

The Constituent Assembly approved a revised version of South Africa'sconstitution in October 1996, which came into force in February 1997. Duringthe drafting, tension arose over federal powers: smaller parties, especially theIFP, were keen on securing their regional power base. The final constitutionultimately created nine provinces (see The economy: regional trends), which,for the first time in South African history, had not only administrative powersbut also political control over a few, relatively unimportant, legislative areas.There are thus nine provincial legislatures, each with a premier and a ten-person executive council. The national parliament comprises a 400-memberNational Assembly (elected on a pure proportional representation system) anda 90-member National Council of Provinces that has significant powers only inareas of provincial competence. Local government is an autonomous sphere ofgovernment with responsibility for providing local services.

The main innovation of the constitution was to introduce a Bill of Rights,guaranteeing a wide range of civil liberties. For the first time, South Africanow takes its legal cues from the constitution itself, turning away from theprevious, British-influenced model in which parliament had supreme authorityto shape the law. Nevertheless, most of the constitution can be altered by the

A new era: the interimconstitution

The final constitution andgovernment structure

12 South Africa


vote of two-thirds of both houses of parliament (except the Bill of Rights,which needs a three-quarters majority). This was one of the main issues in the1999 election campaign. Parliament has, however, lost some of its authority andcredibility, as the ANC's party bosses limit dissent and ensure support forexecutive policy and legislation. This has been most noticeable over the issuesof Zimbabwe, HIV/AIDS and the arms purchase contracted in December 1999,which has attracted allegations of corruption and is still being investigated.

Key institutions and ministries

Constitutional Court

The Constitutional Court functions rather like the US Supreme Court, but with abrief that is limited to constitutional affairs. It has clearly demonstrated itsindependence from the government led by the African National Congress (ANC), ashas the judiciary generally, even though a number of people with a background inthe ANC have taken positions on the bench.

National Economic, Development and Labour Council

The National Economic, Development and Labour Council reflects the consensus-seeking approach to policymaking, which is an integral part of the political process,drawing business, labour and community organisations into interaction with thegovernment (see Economic policy).

Presidency

The president's office is the centre of policymaking and co-ordination in government.It is headed by a former anti-apartheid cleric, Frank Chikane, and is dominated bythe politically powerful minister without portfolio, Essop Pahad, a close confidant ofthe president, Thabo Mbeki.

Ministry of Finance

The minister of finance, Trevor Manuel, is credited with driving the politicallycontentious macroeconomic programme of the government (see Economic policy).His next move is probably to a senior international position rather than higher officewithin domestic politics,

South Africa's shortage of skilled labour weakens the capacity of thebureaucracy at all levels of government. A further problem has been co-ordination and co-operation between different government departments anddifferent tiers of government; attempts have been made through the presidencyto tackle this. These problems are worse in provincial and local governments(outside the three main metropolitan areas).

There is concern over ANC cronyism in connection with senior appointmentsin the civil service and the awarding of government contracts. However, SouthAfrica is generally amongst the least corrupt countries in Africa and iscomparably ranked amongst its peers in terms of income elsewhere in theworld. Most of the cases that the elite criminal investigation unit, the Scorpions,investigate—with an impressive conviction rate of 85%—concern low-rankingcivil servants seeking to supplement low wages. South Africa's generalcommitment to fighting corruption and the lack of widespread corruption

Corruption is not the problemthat it is in the rest of Africa

South Africa 13


among senior politicians is also confirmed in many surveys of corruption. Thelatest corruption rankings from a Berlin-based non-governmental organisation,Transparency International (TI), released in mid-October, appear to give a fairrepresentation of actual trends in South Africa, with the country edging upfrom a score of 4.4 in 2003 to 4.6 in 2004 (where zero represents maximumcorruption and 10 complete freedom from graft). TI also ranks South Africa44th out of 146 countries on its index of corruption. Encouragingly, there is littlepatience shown towards corrupt politicians by the leadership of the ruling ANCparty if and when allegations are proven.

Corruption Perceptions Index 2004, selected countries in Sub-Saharan AfricaCountry 2004 ranking a 2004 score b 2003 score % change c

Botswana 31 6.0 5.7 5.3

South Africa 44 4.6 4.4 4.5Ghana 64 3.6 3.3 9.1

Tanzania 90 2.8 2.5 12.0Ethiopia 114 2.3 2.5 -8.0

Zimbabwe 114 2.3 2.3 0.0Uganda 102 2.6 2.2 18.2Kenya 129 2.1 1.9 10.5

Nigeria 144 1.6 1.4 14.3Sub-Saharan African average - 2.9 d 2.8e 3.6

a Out of 146 countries. b Zero indicates totally corrupt; 10 indicates totally clean. c Between 2003and 2004. d Based on 31 countries. e Based on 24 countries.

Source: Transparency International.

Political forces

The dominant party in South Africa is the ANC, the main party of extra-parliamentary opposition to minority rule since it was founded in 1912. Adefining feature of the ANC has been its commitment to non-racialdemocracy. However, it is a coalition of diverse interests. Differences areapparent between members associated with the movement in exile, such asMr Mbeki, and those who worked in the underground movement and theUnited Democratic Front (UDF), which acted as a domestic political surrogatefor the ANC in the late 1980s.

The ANC has a long tradition of exceptional leaders. Most attention has focusedon Nelson Mandela, who was imprisoned from 1963 to 1990, but many othermembers are also impressive. Mr Mandela's successor, Mr Mbeki, virtually ranthe day-to-day business of government during the final year of Mr Mandela'spresidency. He was one of the architects of the government's growth, employ-ment and redistribution strategy in January 1997, and was elected unopposed tothe ANC presidency at the party's national congress in December 1997.

Since Mr Mbeki's assumption of the presidency, there has been more tension inthe organisation around the leadership than there was during Mr Mandela'sfive years in office. There is a significant minority within the ANC and itsalliance partners who feel that Mr Mbeki has shown poor judgment on anumber of issues. These include, most recently, the handling of the Zimbabwe

The African National Congress

14 South Africa


situation, the HIV/AIDS epidemic, the controversial arms deal and racialreconciliation, on which Mr Mbeki has been more Africanist than Mr Mandela.

However, Mr Mbeki's control over the ANC remains strong, as reflected by thefact that little critical open public debate or discussion takes place on contro-versial policy issues within parliament. This is a significant departure from thehistorical culture of the ANC. Moreover, it seems that Mr Mbeki's power in theANC is unlikely to be challenged in his second and final term in office.

One of the most important non-party political forces in the country is theCongress of South African Trade Unions (COSATU), which emerged in the mid-1980s as a force of political opposition while the ANC was banned. Its mosttalented leaders have been absorbed into the government, leaving COSATUwith a weak leadership. The South African Communist Party (SACP) has lost asignificant proportion of its membership since the ban on the ANC was liftedin 1990, but it continues to provide intellectual arguments for the left. BothCOSATU and the SACP have a number of ministers in the present government,who actively defend the conservative economic framework within which thegovernment operates; this illustrates the complex relationship between andwithin the three organisations.

Tensions between the ANC, the SACP and COSATU have been mounting inrecent years as the ANC's partners have demanded a stronger voice inpolicymaking and criticised the ANC's policies on macroeconomic policy,labour reform and privatisation. However, to date, the issues keeping thealliance together are stronger than their differences, suggesting that the alliancewill continue in its present form. This acts as a drag on the government's desireto reform the labour market, increase the pace of privatisation and keep SouthAfrica open to international economic forces. However, the alliance hasresulted in a much more stable labour environment than before 1994, and hasenabled certain sector-specific accords to be put in place in the quest for globalcompetitiveness.

The IFP was the ruling party in the KwaZulu homeland from 1974, under theleadership of the unpredictable Mangosuthu Buthelezi. Improved relationsbetween the IFP and the ANC, which have had a bloody history, became acritical factor in determining whether South Africa would successfully negotiateits way into the post-apartheid era. The IFP's strong support base in ruralKwaZulu-Natal has allowed it to play a national role, and both Mr Mandela andMr Mbeki have sought to cultivate Mr Buthelezi, who held the home affairsportfolio between 1994 and 2004. However, as the ANC now controls theKwaZulu provincial government, Mr Buthelezi has returned to the backbenchesof the National Assembly, although he still heads the IFP. The future of theparty when Mr Buthelezi goes (he is now in his 70s) is uncertain, not leastbecause its hold on the votes of younger urbanised Zulus has weakened.

The DA is the official opposition party and was formed in June 2000. UntilNovember 2001 the two main parties in the DA were the Democratic Party,which became the official opposition after the 1999 general election, and the

Inkatha Freedom Party

COSATU and SACP: part of astrained alliance

Democratic Alliance: theofficial opposition

South Africa 15


New National Party. The partnership between the DP and the NNP followed amarked shift to the right by the DP in the 1999 election, when it attracted muchof the NNP's conservative support base. The articulate leader of the DP, TonyLeon, led the new grouping. The DA will continue its efforts to develop supportamong the black population, although it is unlikely to have much success:largely whites and the middle classes, rather than poor blacks, have supportedthe party.

The previously influential political groups of the white right (such as theConservative Party and the openly racist Afrikaner Weerstandsbeweging) havebecome completely marginalised. The Afrikaner cause, including the establish-ment of a volkstaat—a white homeland within South Africa—has been promotedsince 1994 by the Vryheidsfront party. However, none of these groupings carriesany significant political clout outside their narrowly based support bases. At theother end of the political spectrum, the radical Pan Africanist Congress and theAzanian People's Organisation performed dismally in the 1999 general election.

Main political figures

Thabo Mbeki

Beginning his second, and constitutionally his last, term of office Mr Mbeki remainsin firm control of the African National Congress (ANC) and the government. Internalcriticism was brushed aside at the ANC's consultative conference in December 2002,where Mr Mbeki was able to consolidate his power—a number of members of theSouth African Communist Party and the Congress of South African Trade Unionswere removed from the ANC's National Executive Committee, leaving the"pragmatists" and Mbeki loyalists in a stronger position. Although Mr Mbeki is underpressure from marginalised elements of society to tackle the country's social ills, hewill remain unyielding to the government's tripartite alliance partners. He willcontinue to exert South African influence in the region, and in Africa generally,through the mechanisms of the New Partnership for Africa's Development (Nepad).He will remain committed to the transformation of society and to Africanisation,and will focus more on bottom-up black economic empowerment during his secondterm in office.

Nelson Mandela

Although the former president has retired from politics, he is still a powerful figure inSouth African and international politics. Having played a key role in bringing aboutnational reconciliation, he remains popular throughout the country among blacks aswell as whites. Mr Mandela, the consummate politician, has combined sharpcriticism of the government's approach to HIV/AIDS with support for Mr Mbeki's re-election as ANC president at the party's national congresses in December 2002 andApril 2004. He has also publicly advanced a much more critical view of Zimbabwe'spresident, Robert Mugabe, than Mr Mbeki has done.

Jacob Zuma

An ANC loyalist elected party deputy president in December 1997, Mr Zuma wasnamed as Mr Mbeki's deputy president in June 1999. The position has becomelargely ceremonial, indicating the growing strength of the president's office in policy

The white right and radical leftare marginalised

16 South Africa


formulation. Mr Zuma was pivotal in bringing peace to KwaZulu-Natal, whichsuffered political violence in the late 1980s and early 1990s. He retained his positionas deputy president of the ANC in the party elections in December 2002. However,his position as deputy president of the country following the 2004 general electionhangs in the balance following allegations of corruption. A police investigation iscentred on whether Mr Zuma had solicited bribes from a French arms contractor,Thomson CSF (now called Thales), one of the main companies involved in aDecember 1999 arms deal. Indeed, his former personal financial adviser, SchabirShaik, is currently on trial for corruption, and during the hearings Mr Zuma is likelyto be embarrassed, even if he is not formally charged.

Trevor Manuel and Tito Mboweni

The minister of finance and the first black governor of the South African ReserveBank respectively have both established strong reputations for competency. Althoughthey work well together on the economy, the two have seldom been on the sameside in a political argument and their relationship is frosty. Both are fiercelyindependent thinkers who have proved to be fast and adept learners, and bothwould admit a tendency towards conservatism in fiscal and monetary matters.Mr Manuel has distinguished himself as one of South Africa's better financeministers, and his fiscal discipline in the face of often heavy pressure from the ANCrank and file has won him the respect of the financial markets.

Alec Erwin

A former communist, he is now the minister for public enterprises, which is a keyrole given that economic policy has shifted towards emphasising state companies asa source of jobs. As minister of trade and industry Mr Erwin oversaw the successfulliberalisation of South Africa's trading environment. He carried much of theresponsibility for restructuring South Africa's manufacturing sector and diversifyingand boosting export earnings. Astute and an eloquent speaker, he will need all hisexperience as a trade union leader to keep restive public employees under control.

Cyril Ramaphosa

A former trade unionist and the ANC's secretary-general from the lifting of the banon the ANC until his departure from representative politics in 1997, Mr Ramaphosawas the ANC's chief negotiator in the constitutional negotiations and co-chairman ofthe Constituent Assembly that drafted South Africa's new constitution.Mr Ramaphosa remains one of the most popular members of the ANC's NationalExecutive Committee. Now a successful businessman on the fringes of politics, he isstill many people's favourite to succeed Mr Mbeki in 2009.

Nkosazana Dlamini-Zuma

Currently the minister of foreign affairs, Ms Dlamini-Zuma is considered by some tobe one of the early contenders to succeed Mr Mbeki after his second term aspresident ends in 2009. Although she certainly has the ambition and drive for thejob, she has alienated key elements of the ANC and its alliance partners. Her role asforeign minister has largely been played out in Africa and she is not well knownbeyond the continent. Ms Dlamini-Zuma is tough and uncompromising, traits thathave served her well in forging peace accords on a continent not known for itsacceptance of women in positions of authority, but she is no diplomat and lacks the

South Africa 17


polish of a presidential candidate. More suitable women candidates are likely toemerge when the race for Mr Mbeki's succession begins in earnest, probably in 2007.

Tony Leon

The leader of the Democratic Alliance (DA), Mr Leon remains by far the most effect-ive opposition leader. Nonetheless, he will continue to struggle to shed the DA'simage as a party mainly for non-black South Africans, despite some modest gains inmore traditional black areas. His style is aggressive and confrontational, and oftenirritates friend and foe alike. Mr Leon will continue with his efforts to develop sup-port among the black population, although they are unlikely to have much success.

Patricia De Lille

A firebrand politician who made the Pan Africanist Congress (PAC) more of apolitical force than it perhaps deserved to be, Ms De Lille started a new, one-person,party during the floor-crossing period of 2003. Her resignation from the PAC to formthe Independent Democrats was a result of her frustration with attempting tonavigate PAC politics while performing effectively in parliament. Her new partyrecorded a creditable outcome of seven seats in the 2004 election, and has somebacking from big business, impressed with her tigerish style and determination tokeep politics as free of corruption as possible. Ms de Lille is a determined, principledindividual who always seemed out of place in the largely ineffective PAC, and shecould make a political impact in coming years if she can gain financial and othersupport for her fledgling party.

International relations and defence

The all-race general election in 1994 represented not just a transformation ofdomestic politics but a shift in South Africa's position internationally. At theregional level, economic and political co-operation is driven by Mr Mbeki'svision of an "African Renaissance". South Africa actively engages with itsAfrican neighbours at both the political and commercial level, both bilaterallyand as a member of regional bodies such as the African Union (AU; previouslythe Organisation of African Unity—OAU) and the Southern AfricanDevelopment Community (SADC). However, South Africa has to tread a fineline. There are mixed feelings among business people and politicians inSouthern Africa about the country's dominant role in the region. These rangefrom hopes that the neighbourhood giant will spark off a region-wide recovery,to fears that South Africa will steal a competitive march on the nascentindustries of other countries.

At the political level, South Africa has had to play a non-intrusive yet firm roleto encourage the peaceful resolution of conflicts in Angola, the DemocraticRepublic of Congo (DRC), Mozambique, Rwanda and Burundi, and, mostrecently, Zimbabwe. Although neither Burundi nor the DRC has yet found alasting political settlement, South Africa's efforts to date show that African-lednegotiations can help to solve African problems—a point that the president willcontinue to make a central principle of foreign policy. However, South Africa'scontinuing failure to broker an end to the political and economic crisis inZimbabwe has cost it dear in terms of the credibility of its foreign policies, as

Mr Mbeki's AfricanRenaissance

18 South Africa


well as its efforts to attract inflows of foreign direct investment because ofconcerns about the ANC's commitment to property rights.

The government won the approval of the OAU conference in Lusaka to presentMr Mbeki's Millennium Africa Plan (MAP) to the G8 summit in Genoa inJuly 2001. Although driven forward by Mr Mbeki, the MAP was stronglysupported by the presidents of Algeria and Nigeria. The MAP was then mergedwith the Omega Plan—which was put forward by the Senegalese president,Abdoulaye Wade—and presented in Genoa. It was agreed there that a high-levelliaison officer would be appointed to work with committed African leaders todevelop a concrete plan of action to be presented to the G8 summit in Canadain 2002. The plan was renamed the New Partnership for Africa's Development(Nepad). It received overwhelming support at the G8 summit in 2002, wherethe group detailed an Africa Plan of Action that commits G8 countries toassisting the promotion of Nepad.

Nepad argues that Africa needs to involve itself much more closely in theglobal economy. To do this it needs to implement a series of reforms, whichwill be supported by the G8 through a combination of external debt relief andimproved trade access to the developed world. Increased financial aid ismentioned, but is deliberately downplayed to emphasise that the thinkingbehind the plan is that responsibility for the success of the plan lies withAfrican leaders. The key reforms proposed by Nepad include:

• the establishment of civil order and more democratic government;

• the prevention and reduction of conflict throughout Sub-Saharan Africa;

• greater respect for human rights;

• increased investment in human resources through health and education;

• policies aimed at diversifying African economies and boosting trade withthe rest of the world;

• measures to enable Africa to adopt new technologies; and

• the combating of the range of diseases that afflict the continent, from AIDSto malaria.

Mr Mbeki has constantly stressed that although his goals may be ambitiousthere is still a strong moral obligation to push such ideas forward and strive topromote African development. Moreover, although many African governmentsmay be recalcitrant, if some countries do adopt Nepad's prescriptions and startto grow rapidly, they will serve as trailblazers for others to follow. Africancountries could then act in mutual support of each other, promote Africanissues on the global agenda and talk to other African leaders from a muchstronger political and economic base. An encouraging development is that anumber of countries have agreed to submit to Nepad's peer review process,which envisages the assessment of each government by a council of Africa's"wise men", including Chris Stals, a former governor of the South AfricanReserve Bank.

New Partnership for Africa'sDevelopment

South Africa 19


Since the end of apartheid the greatest challenge for South Africa's armedforces has been the integration of former members of the ANC's armed wing,Umkhonto we Sizwe (MK). This began slowly and has generated some resent-ment among MK cadres. An estimated 35,000 members of MK and other SouthAfrican resistance movements—as well as 11,500 members from former home-land forces—were to be absorbed into the South African National Defence Force(SANDF), but only 28,000 were taken in, of whom only about half remain. TheSANDF has nevertheless undergone a substantial transformation since 1994,and 70% of its soldiers are now black (African, coloured and Indian). However,more than 60% of senior officers are white, and the apparent disorganisation ofSANDF troops when they entered Lesotho in September 1998 was attributed toa lack of cohesion in the army. Although the services have received acontroversial R30bn (US$3.6bn) new weapons package, they have warned thatbudget cuts may force the closure of three air force bases, and that most of theirunits are at less than 50% readiness. The issue of HIV/AIDS in the army is alsoan increasing source of concern. Moreover, the overstretched SANDF forces areunder pressure to support, on the ground, with personnel, Mr Mbeki's desire torely increasingly on African forces for peacekeeping on the continent.

Comparative military forces, 2004South Africa Zimbabwe Nigeria Algeria

Army 36,000 25,000 62,000 110,000Air force 9,250 4,000 9,500 10,000

Navy 4,500 0 7,000 7,500Total 55,750a 29,000 78,500 127,500Paramilitary forces n/a 21,800 82,000 181,200Defence spending (US$ bn) 2.5 0.9 0.4 2.2

a Includes 6,000 serving in military health service.

Source: International Institute for Strategic Studies, The Military Balance 2003/04.

Security risk in South Africa

Armed conflict

There is currently little prospect of an external threat to South Africa's security. Thechallenge for the South African National Defence Force (SANDF) in recent years hasbeen to integrate the former liberation movements while reducing its own man-power. As there is no foreign threat to South Africa, the future role of the SANDF islikely to be restricted to regional peacekeeping and emergency relief operations.

Violent crime

Economic and social tensions are responsible for a high level of criminal violence inSouth Africa, particularly in urban Gauteng but also in the Western Cape. Crime inGauteng has adversely affected businesses, which have steadily moved away fromJohannesburg's central business district into well-to-do suburbs such as Sandton.Organised business funds a body called Business Against Crime, which monitorsand assists in combating crime at the local level. The high level of crime is perceivedto be one of the obstacles to economic growth; however, studies of foreign investors'attitudes to crime present a mixed picture.

South African NationalDefence Force

20 South Africa


Crime in the Western Cape has centred mainly in the poorer Cape Flats region,which has been plagued by organised and armed gangs. A study by the WorldHealth Organisation in 1995 showed that South Africa had one of the highest murderrates in the world, although this has declined recently. According to the 2003 editionof the Small Arms Survey, a report by a Geneva-based organisation, about 30msmall arms are in circulation in Sub-Saharan Africa (one weapon for every20 people). Rates of rape, robbery, hijacking and burglary are also extremely high,although kidnapping and extortion are rare. A sign that the government is not beingcomplacent about crime is the increase in real terms of budget allocations to theSouth African Police Service (a 11.7% nominal rise for the 2003/04 fiscal year and aprojected increase of 10.5% in the following year) and the recruitment of 16,000 extrapolice personnel, at a cost of R5bn.

The rate of politically motivated murder has fallen from the peak in 1993. Part ofSouth Africa's susceptibility to violence stems from the historical legacy of apartheidand the violent society that this created, as well as the high level of gun ownership.It also reflects the fact that crimes can be committed with a degree of impunity, asthe chances of being caught are low. In addition, South Africa has one of the mostunequal distributions of income in the world; on the one hand, it has the affluenceand sophistication of gleaming shopping centres and, on the other, levels of povertyassociated with developing countries.

Such inequality is an important factor behind crime in the new South Africa. So tooare the rapid influx of people into urban areas since the early 1990s (includingpeople from neighbouring countries), the high level of unemployment and thedifficult transformation taking place in the police service and the criminal justicesystem. The challenges facing the 130,000-strong South African Police Service areformidable, and it is not uncommon for businesses and residents in more affluentsuburbs to employ private armed security firms.

Civil unrest

Political violence has decreased sharply. Most of the political violence of recent yearshas been in KwaZulu-Natal and Gauteng, where conflict between the AfricanNational Congress and the Inkatha Freedom Party has claimed the lives of14,000-20,000 people since 1984. There are still sporadic outbursts of politicalviolence in KwaZulu-Natal, but these are quickly controlled.

Organised crime

The opening-up of South Africa to the global economy has caused an increase in theactivities of domestic and international crime syndicates. South Africa came top inthe category of organised crime and corruption in the World Economic Forum'sGlobal Competitiveness Report. Even though elite special forces (the Scorpions) havebeen created and have operated successfully in areas such as the Western Cape, theunderlying tensions and constraints are difficult to resolve and crime is unlikely tofall dramatically in the near future. There was a spate of bombings in Cape Town in1999-2000, attributed to a vigilante group, People Against Gangsterism and Drugs(PAGAD), which was formed in response to the ineffectual policing of crime in theCape Flats by the official authorities. However, PAGAD itself became involved in

South Africa 21


criminal activities and acts of criminal violence. The arrest of most of the leaders ofthe group put an end to its activities.

Terrorism

There are a number of militant Islamic groups in the Western Cape, including Qiblaand an affiliate of PAGAD, Muslims against Illegitimate Leaders, some of which arereported to have links with Osama bin Laden's al-Qaida network. However, noincidents have occurred since the terrorist attacks in the US on September 11th 2001.

Social unrest

Civil society protests, including demonstrations by workers, have, in the main, beenwell organised and peaceful. At worst, there have been just a few skirmishes.

Resources and infrastructure

PopulationPopulation indicators, 2002Population (mid-year; m) 45.5Population growth rate (%) 2.0Fertility rate (children per woman) 2.8

Life expectancy (years) 46.5Urbanisation (%) 50.4

Sources: Statistics South Africa; World Bank, African Development Indicators.

In July 2003 Statistics South Africa (SSA) formally released the main results ofthe 2001 population census at a press conference in Pretoria; they containpositive news about the overall level of economic development in the country.Data from the census show that between 1996 and 2001 there have beensignificant improvements in the provision of housing, water, electricity andcommunications for the average South African. One of the early economicpolicies of the new African National Congress (ANC) government when itcame to power in 1994 was the "million houses" scheme, and, as the censusshows, the government has continued to build on this, with more than2m houses—classified as formal structures built out of bricks and mortar—beingbuilt between the first post-apartheid census in 1996 and the current one,conducted in 2001. Moreover, and crucially for the government, the increase inhouses was largely in black residential areas, where the number of householdsincreased sharply, from 6.5m in 1996 to 8.7m in 2001. The census also revealedthe following:

• the number of households with electricity increased by 10% between 1996and 2001, with just over 70% of households now using electricity for lightingand just over 50% also using it for cooking;

• an even larger percentage of households, 85%, now have access to pipedwater within a 200-metre radius of their homes, although 15% use boreholes,rivers and rainwater tanks;

• the proportion of people with access to a telephone increased from 29% in1996 to 42% in 2001; and

The 2001 census results showsocial progress

22 South Africa


• over 90% of households now have access to a toilet.

The census also confirmed that South Africa is a rapidly urbanising nation. Thisstate of affairs is unlikely to change and will continue to put huge strain on thecountry's municipal authorities, which are in charge of providing services inthe cities. The two provinces that have seen the largest gains in population are,perhaps not surprisingly, Gauteng, which received 400,000 inward migrantsbetween 1996 and 2001, and Western Cape, which received an additional185,000 persons over the same period. Gauteng's population growth between1996 and 2001 was double the national average, and that of Western Cape was1.4 times the national average. Migrants were overwhelmingly from the smallerrural provinces, notably Eastern Cape and Limpopo. This type of data is ofconsiderable importance to a government committed to improving the deliveryof social services at the local level, as it will be used to determine how thegovernment allocates financial resources to provinces—an issue that will beexamined in detail by the financial and fiscal commission starting in late 2003.

In a statement issued at the launch of the census results, the president, ThaboMbeki, although welcoming the publication of the data, noted that SouthAfrica's official statistical system needs strengthening, particularly through thebuilding-up of a stronger base of skilled statisticians. Although the census isgenerally believed to be statistically sound, it has attracted criticism over thequality of certain aspects of its data, and there were some problems during itsimplementation. For example, the finance minister, Trevor Manuel, highlightedproblems with paying enumerators, threats of strike action and a leaking roof atthe processing centre. Questions have also been raised over the failure of SSA topublish mortality and fertility data along with the other main databank.

Although the census does not provide long-term projections of the country'spopulation, the US Population Reference Bureau (PRB) estimates that SouthAfrica's population will fall from its current level of 45m to only 35.1m by 2025and 32.5m by 2050, a 26% decline. This fall will be driven mainly by the impactof HIV/AIDS, which the PRB estimates now affects 20.1% of the population.

Population by racial group, 2001('000 unless otherwise indicated; census results)

Province African % White % Coloured % Asian % Totala %KwaZulu-Natal 8,002 84.9 483 5.1 141 1.5 798 8.5 9,426 21.0Gauteng 6,522 73.8 1,758 19.9 337 3.8 218 2.5 8,837 19.7Eastern Cape 5,635 87.5 304 4.7 478 7.4 18 0.3 6,436 14.4

Limpopo 5,128 97.2 126 2.4 10 0.2 8 0.2 5,273 11.8Western Cape 1,207 26.7 832 18.4 2,438 53.9 45 1.0 4,524 10.1

North-West 3,358 91.5 244 6.7 56 1.6 9 0.3 3,669 8.2Mpumalanga 2,886 92.4 203 6.5 22 0.7 11 0.4 3,122 7.0

Free State 2,381 88.0 238 8.8 83 3.1 3 0.1 2,706 6.0Northern Cape 293 35.7 102 12.4 424 51.6 2 0.3 822 1.8Total South Africa 35,416 79.0 4,293 9.6 3,994 8.9 1,115 2.5 44,819 100.0

a Includes unstated.

Source: Statistics South Africa.

South Africa is urbanisingrapidly

South Africa 23


South Africa is one of the most unequal societies in the world; almost two-thirds of its labour force earns less than US$250 per month. This is because ofSouth Africa's history of controlling access to education, the labour market andthe ownership of assets. The high level of unemployment is also a keycontributor to inequality. According to the UN Development Programme'sHuman Development Report, two-thirds of total income is concentrated in thehands of the richest 20% of the population, leaving the poorest with a mere 2%.The white population, which has the highest proportion of skilled and highlyskilled labour, is concentrated in the economically dominant Gauteng andWestern Cape provinces. Analysts argue that one of the critical structuralproblems of the labour market in South Africa is the excess of low-skilled andunskilled workers and the shortage of highly skilled workers, leading to a duallabour market. The main languages are IsiZulu (the first language of 23.8% ofthe population), IsiXhosa (17.6%) and Afrikaans (13.3%); English is the firstlanguage of only 8.2% of the population, but the second language of a largemajority. All official documentation is, therefore, in English and at least one ofthe other official languages.

Migration

A critical policy issue

There is a long history of formal labour migration to South Africa, mainly to themines—although it has lessened because of cutbacks in the mining sector. There isalso a history of less formal migration to farms close to South Africa's borders.Migration into South Africa has increased sharply since the early 1990s, owing to theopening of borders and the relaxation of border controls. The number of officialimmigrants to South Africa is low (mainly from the UK, India and Zimbabwe), butthere is a large and increasing flow of illegal, low-skilled migrants, mainly fromneighbouring African countries, coming in search of employment. This has led togrowing xenophobia: increasing crime is popularly attributed to immigrants.Although the 2001 census counted less than 500,000 foreigners in South Africa,estimates put the number of immigrants at anywhere between 2m and 8m.Worsening conditions elsewhere in Africa, particularly in Zimbabwe, will probablymaintain the influx, although the government is undertaking vigorous repatriationprogrammes and has tightened border controls.

Paradoxically, outward migration also remains high, as whites (and also somecoloureds and Indians) leave the country. Anecdotal evidence suggests that theincrease is due to the feeling that the country's transformation will adversely affectfuture opportunities, and also to the high incidence of crime (the main destinationsof emigrants are Australia, New Zealand, the UK and the US). A study by HaroonBhorat, a labour economist at the University of Western Cape, found that, among thefour racial groups, only white employees have seen their absolute numbers decline.The government estimates that in 2003 there was a net outward migration of whitesof 21,250, fairly evenly split between males and females. This emigration hassharpened South Africa's skills shortage, which is a major obstacle to growth. Theonerous immigration bureaucracy has worsened the problem by making it difficultfor skilled foreigners to work in South Africa. A new Immigration Bill was passed in

Income distribution is highlyunequal

24 South Africa


2002 after considerable party political rivalry between the Inkatha Freedom Party,whose leader, Mangosuthu Buthelezi, was the minister overseeing the bill, and theruling African National Congress.

Education

Under apartheid, racially biased education policies undermined the skillsresources of the country, with long-term implications for the labour market andSouth Africa's competitiveness. The potential impact of HIV/AIDS is likely toworsen the situation. The institutional issues are complex, and little headwaywas made until the late 1990s. The school curriculum, education-fundingmechanisms, and the further and higher education system are to berestructured—with long-term implications for the country's skills base.

After a fraught process revising the outdated schools curriculum, the finalversion of Curriculum 2005 will radically change what is taught in schools andhow it is taught. The government's focus will be teacher training, educationmanagement and increasing the quantity of learning support materialsprovided to schools. In June 2002 the minister of education tabled detailedproposals for a new institutional landscape for higher education, based on anextensive consultative process begun in the early 1990s. The existing21 universities and 15 "technikons" in the tertiary sector are to be consolidated,with the aim of developing a skills base that meets the human resource needsof the country. As considerable headway has been made in reforming thefunding mechanisms for further and higher education, the government is nowturning its attention to the reform of funding mechanisms to meet theeducational needs of the poorest.

Comparative human development indicators, 2003aSouth Africa Zimbabwe Nigeria Kenya

Human Development Index score 0.666 0.491 0.466 0.488Real GDP per head (US$; in PPP terms) 10,070 2,400 860 1,020Population below poverty line (1990-2003)b 7.1 36.0 70.2 23.0Life expectancy at birth (years) 48.8 33.9 51.6 45.2Infant mortality (per 1,000 live births) 52.0 76.0 110.0 78.0Doctors (per 100,000; 1990-2003) 25.0 6.0 27.0 14.0Public health expenditure (% of GDP; 2001) 3.6 2.8c 0.8 1.7Private health expenditure (% of GDP; 2001) 5.1 3.4 2.6 1.7Adult literacy rate (%) 86.0 90.0 66.8 84.3Gross enrolment ratio (2001-2002)d 90.0 83 n/ae 70.0Scientists & engineers in R&D (per m people;

1990-2001)f 992.0 n/a 15.0 n/a

a Unless otherwise indicated. b US$1 per day. c 1999. d Combined primary, secondary and tertiary levels. e Data refer to the 1999/2000 schoolyear.f Data refer to a year previous to 1996.

Source: UN Development Programme, Human Development Report 2004.

Education and training—thesingle greatest hurdle

South Africa 25


South Africa's university system is the best in Africa, although the plethora ofuniversities and technikons—36 in all—is to be rationalised into 21 institutions,according to proposals to restructure the higher education system. Since 1994formerly white institutions, such as the University of the Witwatersrand inJohannesburg and the University of Cape Town, have taken increasingnumbers of black students. The larger, wealthier universities are battling totransform themselves, and previously non-white institutions are struggling withpoor resources and declining student numbers. Around 8.4% of the populationhas received higher education, according to the 2001 census, most of themwhites (blacks in higher education now exceed whites by a small margin:995,378 compared with 930,927). The numbers of non-white students andteaching staff at the larger universities (particularly Afrikaans universities) haveincreased vastly in the past few years. However, there are still problems inbridging the gap between university expectations and the poor schooling ofmany Africans, and this has resulted in the number of African studentsenrolled at some universities actually falling since 1994.

Health

South Africa's health profile reflects the legacy of apartheid. The infantmortality rate among the African population is high—on a par with that forBangladesh—but the rate for whites is similar to that in OECD countries. Thegovernment is trying to redress the balance, and has already made considerableprogress in expanding the now free primary healthcare system. Controversially,this has been at the expense of funding for teaching hospitals, which havehistorically produced cutting-edge research and medical skills. Funding is acritical issue and budgetary constraints have made the provision of adequatehealth services extremely difficult. Furthermore, capacity problems, particularlyin rural areas, are an ongoing concern. The rapidly increasing incidence ofHIV/AIDS is increasing the strain on the health system. As with many of SouthAfrica's services, a parallel private system of state-of-the-art healthcare exists,although this too has been under strain as a result of problems in the medicalinsurance system. The system has three tiers.

• High-quality and expensive private healthcare, which is financedmainly by users through private health insurance and is out of the reach of allbut those in formal-sector employment. The system is also supported byfacilities provided by many large employers, notably the mining companies,which often have company doctors and clinics that are available to blue collaremployees and their immediate families. However, the cost of dealing withHIV/AIDS has increased the price of occupational cover, and many insurers areconsidering stepping back from the mass cover market.

• The state system, which under apartheid was grossly under-funded andnot a policy priority, consists mainly of the provision of hospitals and healthcentres. It is currently undergoing a major reform, which seeks to establish anational health system encompassing public, private and non-governmentalproviders of health services. The policy seeks to establish provincial health

Emphasis on primaryhealthcare

The universities

26 South Africa


authorities and, importantly, inspectorates of health facilities. In addition to this,it is to require the provinces to provide environmental, promotive andpreventive health services in addition to the curative health services currentlyprovided. For this, municipalities will need to be adequately funded, whichcould become a major source of contention and strain between central andprovincial governments.

• Traditional medicine, which has to meet the needs of those that cannotpay to go to a doctor and do not wish to queue to use a health centre orhospital. This area is expected to grow rapidly, creating a niche market for usersof the private sector, and should not be underestimated. It is calculated thatthere are 300,000 traditional healers in South Africa and that 75% of thepopulation has experimented with traditional medicines. Sales of traditionalmedicines are worth an estimated R3.2bn (US$386m) a year, compared withsales of Western drugs totalling R7bn a year. As with many unregulatedindustries, there are problems over the toxicity of medicines and the use of wildplants and animals that could cause their extinction. There is, therefore, a needto regulate the industry and bring it within the formal health sector.

Pressure to form a unified health service in South Africa is expected to mount,largely because of the strain placed on all aspects of the country's healthsystem by the growing impact of the HIV/AIDS pandemic and other relatedillnesses, for example tuberculosis and malaria. This will impose a huge cost onthe system, which both the private and public sector will struggle to cope with.Most of the main multin

south africa - international university of japan · in 1992 mr de klerk won a firm mandate for...

Documents