Will S. Africa Choose to Be Poor? : Reform That’s Only Halfhearted Will Impose Awesome Costs

Halfhearted reform and halfhearted repression are said to have been the fatal combination that toppled the Shah of Iran. By the end of 1985, some foreign observers thought that the South African government was caught in the same deadlock. The state of emergency proclaimed a month ago has changed at least one part of that equation.

South Africa still can go considerably further along the road of repression. It can try to break the strongest of the black trade unions and begin to intervene directly in strikes. It can keep three or four of the most critical newspapers off the streets. It can tell business leaders to shut up. Meddlesome priests and academics can be silenced.

It is shortsighted to dismiss this as a road that will lead only to self-destruction. The Oxford don, R. W. Johnson, said in 1977 in his powerful book “How Long Will South Africa Survive?” that the regime could last well into the 21st Century, provided it is ruthless enough. The past 18 months have removed any doubts about the degree of ruthlessness that the government is prepared to employ. Moreover, an industrialized state resting on a stable social base (the whites, in South Africa’s case) has yet to be defeated by insurgents or a popular uprising.

In the end it all comes down to a question of will--the will to impose repression, and the will to pay the price for it.

More than 25 years ago Prime Minister Hendrik F. Verwoerd, the architect of apartheid, formulated the proposition that he would rather see South Africa “poor but white than rich and mixed.” Many observers assumed that the dismantling of parts of Verwoerd’s apartheid framework during the last 10 years meant that South Africa wanted to be rich, and so was prepared to integrate.

In fact, the South African government has never made any such choice. To keep all the decisive political levers in white hands, this government is prepared to face sanctions and, with them, a considerable economic blow.

What is not yet known is whether the government is prepared to pay almost any price to prolong the present political order. Is it prepared to see the economy implode, as Argentina’s did during the past five decades? Is it prepared to face the consequences of a severe economic slump and its effects expressed in a sharp rise in white and black unemployment?

It is here that South Africa’s prognosis becomes slightly more cheerful. It is one thing for a state to let the economy take a severe knock, as would happen in the case of sanctions; it is quite another to let the economy disintegrate and collapse. The state has recognized the close connection between unemployment and instability: Already 4 million blacks, or 30% of the economically active population in South Africa, are unemployed or underemployed--an important factor in the unrest.

The very limited democracy that South Africa still enjoys is due largely to the fact that a substantial private sector exists. The private sector has a total fixed investment in the economy of 50%; in manufacturing, the largest sector of the economy, it rises to 80%. As Yale scholar Charles E. Lindblom pointed out in his major 1977 study, “Politics and Markets,” government cannot command business to perform--its leaders must be induced. “They will not risk capital reputation or the solvency of an enterprise in order to undertake an entrepreneurial venture unless conditions are favorable.”

In the past five years South African business leaders have exercised that choice, and in so doing have clearly indicated their lack of faith in the government’s reform program. According to a new study, total gross domestic investment in 1985 was down 18.2% since 1981, and 46% in manufacturing. Without new investment there are no new jobs. The number of people working in manufacturing has fallen from just under 1.4 million in February, 1982, to just over 1.3 million in February, 1986. This is a loss of 170,000 jobs at a time when there should have been a huge increase to ensure a sound and healthy economy and full black employment.

There now are powerful voices advocating that South African government should take over the investment function. Yet this would only scare businessmen even further, and accelerate the illegal flight of capital out of the country.

As citizens, South African businessmen are not necessarily greater democrats than other whites. But as businessmen they need independent sources of information--something that only a free press can provide. Business also wants negotiating partners in the workplace, and only independent unions can offer this. Business, albeit belatedly, now realizes that South Africa needs some form of democratic solution, and that means something quite different from the systems that the government has been trying to introduce during the past three years.

The greatest mistake that the Reagan Administration and South African business leaders have made was to assume that the modernization of South Africa’s socioeconomic system (the improvement of black education and training and recognition of black trade unions) would lead to political power-sharing.

However, political power-sharing is a quite separate issue about which the Botha government must still make a decision. Business leaders need do nothing more than spell out quite simply to President Pieter W. Botha the awesome costs of the choice to remain poor and politically segregated. It could be as fatal a combination as halfhearted repression and halfhearted reform.