National Agenda : The Cost of Politics in S. Africa : Mandela may have promised more than he can deliver. His tough task will be economic equality.

After two weeks of post-election euphoria and some much-needed rest, President Nelson Mandela and the government of the newly democratic South Africa go to work today.

At 2:15 p.m., after a military salute parades in the streets of Cape Town, Mandela will rise before a joint session of the all-race Parliament to deliver his first state of the nation speech. He is expected to lay out a legislative and policy agenda to transform a nation still saddled with the social and financial inequities of racist rule.

But how much Mandela will be able to achieve as he begins to govern is a considerable question. A severe reality check may be the first order of business for the Government of National Unity--the official name for the fragile multi-party coalition dominated by Mandela’s African National Congress.

Put simply, economic equality will be more difficult to achieve than political equality. Three and a half centuries of colonialism and apartheid have left probably the most unequal society in the world, and little has changed since the votes were counted.

The 13% white population owns 86% of South Africa’s land and more than 90% of its wealth. Nearly half of the 30 million blacks are unemployed and illiterate; 17 million live in abject poverty. Whites earn, on average, 10 times more than blacks. Whites own computers and swimming pools. Millions of blacks do not have electricity or running water.

But severe fiscal limits may undermine Mandela’s campaign promises to improve social programs for the poor. Unless he violates another campaign pledge--not to frighten foreign investors or the business community by increased taxes and heavy borrowing--he will be hard-pressed to meet his commitments.

“The problem is Mr. Mandela has promised more than the new government can deliver,” said Sampie Terreblanche, an economist at the University of Stellenbosch near Cape Town.

Mandela, for example, repeatedly pledged that his first priority in office would be to implement the ANC platform known as the Reconstruction and Development Plan.

Trumpeted at nearly every campaign stop, it promised voters that the ANC will build 1 million homes, create 2.5 million jobs through public works programs, provide quality schools and supply free health care for children, among other pledges.

The problem was the plan never said how, or how much it would cost.

When pressed, ANC officials estimated the cost at $11.5 billion over five years, but insisted that the money could come from savings in the government’s $36-billion annual budget.

Last week, an ANC think tank, the National Institute for Economic Policy, went public with their own estimate: The redevelopment plan would cost at least $23 billion, and there is a prospect of precious few savings in the budget.

Although the government’s first budget will not be presented until June 22, Terreblanche said the higher estimate may be optimistic.

“It won’t be easy to get an apartheid dividend,” he said. “They will have to raise taxes.”

Financial markets, which reached a similar conclusion, have reacted in near panic to the sudden specter of a soak-the-rich administration awash in red ink.

The Johannesburg Stock Exchange dropped sharply. And the South African rand fell to record lows against almost every other currency.

The Star, an English-language paper here, complained of a credibility gap. Since the new government has yet to do anything, the charge may be premature. But it suggests that Mandela’s honeymoon will have some limits.

“Politicians are notorious for flirting with tough truths, especially at election time,” the Star said. “But to bandy about discrepancies as huge as this is to court disaster.”

Another disaster looms in the re-incorporation of the country’s 10 former all-black homelands.

Under the new constitution, all were formally reabsorbed into South Africa on Election Day. It ended a cruel system created under apartheid in which millions of blacks were forced from their homes and farms and dumped on land that was invariably desolate, dry and distant.

Six homelands were ostensibly self-governing, but with massive subsidies from Pretoria. The other four were nominally independent, but equally dependent on the white rulers who had formulated the fiction. The only constant was appalling rural poverty for millions of blacks and widespread corruption by their leaders.

As a result, John Kane-Berman, director of the Johannesburg-based South African Institute of Race Relations, argues that the re-incorporation of the former homelands, and their 14 million residents, may be as problematic as the unification of East and West Germay after the fall of the Berlin Wall.

“Our experience will be much the same, or worse, than in Germany,” he said. “We assume we can reincorporate on the cheap. It’s going to cost a bloody fortune.

“When the government forcibly removed people and dumped then in the homelands, they didn’t build houses for them or put them in hotels,” he added. “They just dumped them, and so the housing and other needs are much greater than in say, Soweto.”

Although duplicative government infrastructure may be eliminated with the consolidation of departments, for example, the savings may as elusive. Take education. The ANC has pledged to equalize spending for black and white students. About three times more is now spent for each white student than each black, according to official government figures.

But Kane-Berman said the real disparity is far greater when children from the homelands--who were not counted by the government--are included.

He said about 70% of all black children live in the now-defunct tribal areas, and the spending on them is less than half of what is for black students in the rest of South Africa.

By his estimate, just to spend the same amounts on rural children in the former homelands as is now spent for black education in urban townships such as Soweto would add more than $8 billion to the budget.

In other words, he said, “to bring those black children up to the level of children in Soweto will cost far more than bringing the children in Soweto up to the level of spending on whites.”

He added: “This is going to be the land mine under the new government’s spending policy. It talks about the post-apartheid dividend, but there isn’t one. If apartheid wasn’t a net savings to Pretoria, it would have been abandoned a long time ago.”

Similarly, the ANC promised to guarantee the jobs and pensions of at least 450,000 civil servants in the former homelands. It also vowed to increase their salaries to match those given to South Africa’s 750,000 civil servants.

The pledge played a key role before the election, since it led to strikes by civil servants in Bophuthatswana and Ciskei against leaders who had sworn to boycott the elections and defy the new government. The unrest ultimately brought down the two regimes.

To meet the ANC pledge will cost another fortune, however.

Tom Lodge, a political scientist at the University of the Witwatersrand, says pay parity for the former homelands would increase the national budget by at least 15%.

“If they concede this issue, they’ve almost written into the ground any significant expenditure for social services,” he said of Mandela’s government.

Add to that a commission’s proposal to give huge pay hikes to members of Parliament and other government leaders, as well as promises to incorporate thousands of former guerrillas from the ANC’s Spear of the Nation and other rebel armies into the nation’s defense forces, and payrolls will skyrocket.

“Even before Nelson Mandela has opened his mouth, we have a government that’s practically increased by 50% the expenditure on salaries,” Lodge said. “That’s not a good start for a government committed to fiscal austerity, to increased social spending and to luring foreign investors.”

Foreign governments will listen to hear what Mandela says about foreign policy.

The focus is likely to be local: Mandela wants to improve relations with the rest of Africa. He is expected to visit Tunis next month to formally join the Organization of African Unity, a move with enormous symbolic and emotional import for the former pariah state.

Similarly, South Africa is expected to rejoin the British-led Commonwealth within coming weeks, a link sundered after apartheid was imposed in 1948.

Benefits for the former British colony will include greater access and involvement to international sporting events, fellowships and cultural links.

Many diplomats fear Mandela has gotten off to a shaky start, however, by appointing Alfred Nzo as his first foreign minister.

The little-known Nzo was ousted as ANC general secretary in 1991, ostensibly for incompetence. Critics say Mandela’s appointment of his longtime friend smacks more of cronyism than statesmanship.

Sarah Pienaar, national director of the independent South African Institute of International Affairs, said Nzo’s appointment has “caused a great deal of bewilderment.”

She added: “It was a surprise. We could have thought of many qualified people in the incoming government.”

Racially Divided In South Africa:

President Nelson Mandela faces a nation divided--by income, by education, by health services, by race. Some statistics show the task at hand:

Population, 1993 (millions)

Life Expectancy

Monthly Income (1991)

Unemployment (1991)

Source: South African Consulate General