The history of the ANC and the Tripartite Alliance


Term Paper (Advanced seminar), 2007
31 Pages, Grade: 1,7

Excerpt

Contents

1. Introduction

2. The economics of the apartheid regime
2.1 The strategic importance of South Africa
2.1.1 The importance of the Cape Route
2.1.2 South Africa’s mineral wealth

3. Sanctions
3.1 Definition and distinction
3.2 The legal situation of the international context
3.3 A chronology of sanctions to the RSA
3.4 Evaluation of the sanction imposed on the RSA

4. The Federal Republic of Germany and the RSA
4.1 Germany’s foreign policy towards South Africa
4.2 Economic relations
4.3 Conclusion

6 Works consulted

1. Introduction

For more than 40 years the South African National Party (NP) was in power governing the country with a racist system of segregation. For the black and colored majority of the country it was a time of fear, harassment, persecution and injustice. Throughout the years the global community was aware of the political situation in South Africa. The major issue of this paper is to examine the positions and campaigns of different countries of the global community toward the situation in South Africa, especially focusing on political and economic reactions from the sixties[1] until 1989.

First of all a brief overview will be given on the economics of the apartheid system in order to create an awareness of the general conditions whereupon the strategic importance of South Africa for the global community will be issued. In order to mediate a sufficient background knowledge sanctions will be defined and different sanction scenarios that were possible will be discussed. Subsequently a chronology of sanctions towards South Africa will be given in order to then focus on The Federal Republic of Germany (FRG), its interests in and reactions towards the Republic of South Africa (RSA). Due to the limitation of this paper Germany will be taken as an example for the policies of many Western states. However, several countries will be briefly discussed throughout the paper.

While analyzing the different positions during the apartheid era two major questions will be guiding through the paper:

1. How did the countries react?
2. What was/could have been the interest behind the reaction?

Finally by having answered these questions a conclusion can be drawn as to whether the global community used all the existing possibilities to help bring apartheid to an end.

2. The economics of the apartheid regime

The RSA entered the international capital market in 1867 after the discovery of diamonds at Kimberley and since then heavily relied on the export of products from the mining sector. Primarily black workers from entire southern Africa were working at the mines, as the RSA’s share of a wide range of minerals is large. However, experts still argue on the role of South Africa as a producer of key strategic minerals as chromium, manganese, cobalt ant the platinum-group metals[2]. Since the twentieth century the percentage of South African imports and exports to the gross domestic product (GDP) has been more than 50 percent. The dominance of gold in the share of exports was striking. Moreover products from the agricultural sector still played a major role while manufactured products (including smelted metals) became more important for the export in the last years of the apartheid regime. However, compared to other upper-middle income countries the share of exported manufactured goods in the RSA was lower. Most of the manufactured goods were exported to other southern African states. On the import side the structure of the manufactured goods had changed during the apartheid era. While at the end of the forties the semi processed raw materials, food, beverages and other consumer goods were primarily imported. Towards the end of the eighties the product range had changed in favor of machinery, transport equipment, chemicals oil and weaponry (Lewis 1990:56ff.).

illustration not visible in this excerpt

Image 1 (Lewis 1990:59)

Crude oil is the only major raw material the RSA does not possess. One figure clearly demonstrates this fact: between the mid-seventies and the mid-eighties the RSA’s imports have been running between 15 and 20 billion Dollars, oil representing 10-15 percent of the costs. Despite the RSA’s dependency on importing oil it did not suffer as badly from the declining terms of trade in the seventies. The next table clearly demonstrates the reason of the stable South African economy:

illustration not visible in this excerpt

Image 2 (Lewis 1990:62)

The RSA has not experienced a long-term downward trend because of their gold possessions, especially since the freeing of the gold price in 1971 (Lewis 1990:60ff.).

Concerning capital, foreign investment has always played a very important role in the RSA. According to Frankel’s estimation 500 million pounds were invested in the RSA between 1870 and 1936, which was between one-third and one-half of the total capital formation. But it was also foreign capital financing the liabilities of the South African government and public utilities with estimated 200 million pounds. However, most foreign capital in South Africa is the reinvestment of former earnings. This fact has enabled the state to develop domestic sources of saving and domestic management (Lewis 1990:62f.). The RSA as a state does not only supply public services as the railway, air traffic, seaports and mail but also owns shares in the basic industries as steel production, coal hydrogenation, the energy and water supply (Brill 1991:38). However, the landscape of investments has changed over the past 50 years. While in 1956 over 75 percent of foreign investment were represented by long-term equity investments, in the mid eighties foreign investment was mostly short-term debt. The following overall assumption on foreign investment is enlightening:

“(…) if all foreign investors gave up their present holdings in South Africa, and if South Africa were able to avoid transferring the full principle value of those investments abroad, then the reduced flow of dividend and profits to foreigners would more than offset the loss of new capital inflow from abroad. South Africa would be better off in financial terms if it could completely stop doing business with foreign private investors.” (Lewis 1990:70)

Looking at the geographical distribution of South African trade the following table clearly shows that South African economy focuses on few of the big industrialized countries:

illustration not visible in this excerpt

Image 3 (Lewis 1990:73)

Basically it can be summed up that the RSA changed from a fairly agricultural country until 1870 to an agricultural-mining country until World War II and finally in the eighties to a newly industrializing country. In the eighties it also reached one of the top position in African economy and in 1984 had a 25 percent share of the African gross social product (GSP), while only having 4 percent of the African territory and 8 percent of Africa’s population. Above a few more figures accentuate the RSA’s role in Africa:

- The RSA produces 20 percent of Africa’s agricultural goods.
- South African mining has a 45 percent share of Africa’s total mining.
- 40 percent of Africa’s industry and 60 percent of Africa’s use of electricity are in the RSA.

Finally the RSA is one of the few African countries that is almost entirely able to nourish its population (Brill 1991:1938).

Concerning the apartheid government policies a lot changed in the late seventies and eighties. The government was well aware of its isolated position within the global community and thus had started to adopt precautious policies for the case of being sanctioned. Not only had the government invested in strategic industries and built up a domestic armament corporation called ARMSCOR[3] and thereby had developed to a weapon exporter, but also had started to develop coal gasification strategies to solve the oil-dependency problem. Moreover the RSA had established a worldwide number of sanction-busting institutions for re-labeling imports and exports and changing their nationality. Finally the RSA had created a dual-exchange rate system, which was called the financial rand in order

“to isolate the effect of capital flight from the foreign exchange reserves (…) If more capital is flowing out of than into South Africa in a given period of time, the value of the financial rand will fall, and the price of foreign currency will rise. As a result of this mechanism, individuals or firms wishing to disinvest from South Africa are able to take out of the country only as much foreign currency as other foreigners wish to bring in during the same period” (Lewis 1990:76).

It is interesting however that the South African authorities put a lot more weight on the importance of foreign investment than it is really worth. Furthermore companies can bring their investments into the country via the financial rand and take the profits home via the commercial rand – a system where the investors can win but the government can easily lose. But the government not only in times of upcoming sanctions depended on the technical know-how that came with the investments.

2.1 The strategic importance of South Africa

The interest of this paper concerns the reaction of the western industrialized states toward the apartheid regime. In order to entirely understand the circumstances of the RSA’s relation to the Western states it is particularly important to examine the strategic importance of South Africa for the western world. Only by considering these facts it is possible to objectively analyze and understand the western reactions.

A lot has been written about South Africa’s particular strategic importance to the West. Mostly, three major arguments have been pointed to:

1. The importance of the Cape Route.
2. The mineral wealth of South Africa.
3. The military power of the RSA as a regional peacekeeper and as an ally against the Soviet Union.

Subsequently, these arguments are being analyzed according to the aspect whether the RSA is really as indispensable to the West.

2.1.1 The importance of the Cape Route

South Africa’s geo-political and geo-strategic situation became very important to the West in the past three to four decades as world trade expanded. The Cape of Good Hope is the link between the Indian and Atlantic Ocean. The sea routes from the Persian Gulf, Asia and Australia meet at this point. In the eighties between 15000 (Brill 1991:131) and 27000 (Bowman 1985:122) ships passed those sea routes annually transporting 60 percent of the American and 20 percent of the European crude oil demand. Moreover 25 percent of European food deliveries have to pass the Cape Route every year. In 1967 the Suez Canal had to be closed. During the long time of its closure the Cape route became the most important sea route for crude oil transportation and even after its reopening the oil supertankers were too large to pass the Suez Canal and thus retained their route (Bowman 1985:122). Following charts will demonstrate the importance of the Cape route as a major trade route for the western world:

[...]


[1] All abbreviated dates are implying events in the 20th century.

[2] This point will be discussed subsequently.

[3] Abbreviation for Armaments Corporation of South Africa.

Excerpt out of 31 pages

Details

Title
The history of the ANC and the Tripartite Alliance
College
University of Marburg
Grade
1,7
Author
Year
2007
Pages
31
Catalog Number
V114223
ISBN (eBook)
9783640152230
ISBN (Book)
9783640154432
File size
1700 KB
Language
English
Tags
Tripartite, Alliance
Quote paper
Sahar Farman (Author), 2007, The history of the ANC and the Tripartite Alliance, Munich, GRIN Verlag, https://www.grin.com/document/114223

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