SOUTH AFRICA IN A NEW DECADE

Created: 4/1/1972

OCR scan of the original document, errors are possible

national

intelligence

estimate

South Africaew Decade

rppwvid tor release

THIS ESTIMATE IS SUBMITTED BY THE DIRECTOR OF CENTRAL INTELLIGENCE AND CONCURRED IN BY THE UNITED STATES INTELLIGENCE BOARD.

The following intelligence organizations participated in the preparation of the estimatet

The Centrol Intelligence Agency and the intelligence organization!heol Slate and Defense, and the NSA,

Concurring!

The Deputy Director of Central Intelligence

The Director of Intelligence and Research, Department of State

The Director. Defonve Intelligence Agency

The Director, National Security Agency

The Assistant General Manager. Atomic Energy Commission

Special Assistant lo the Secretary of the Treasury

Abstaining!

The Assistant Director, Federal Bureau of Investigation, the subject being ouulde ol hli Jurisdiction.

WARNING

Thii material contains Information affecting the National Defense of the United Siolei within the meaning of ihe eiplonage lows. Title IB, USC, Sees., the trans-minion or revelation of which In ony manner to on unavlhoriied person Is prohibited.

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CONTENTS

Pag*

CX)NCLUR'ONS 1

a

I. S

II. THE REGIME'S SOURCES OF POWER . A

Security Forces ..

White

C The Vonter Economic

D. Vorster's Outward

OF CROWING 6

i rouble! in SouuVWest $

B. Growing Block Nationalism:nor 7

The Bantuitani 7

Urban Non-Whitea 8

C Apartheid and the Economy 9

D. Slowing Eccflomic Activity. 10

FOR10

V. THE OUTLOOK FOR CONTINUITY AND12

VI. IMPLICATIONS FOR THE UNITED 13

ANNEX

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south africaew decade

CONCLUSIONS

Africa's four million whitestrong andeconomy, efficient internal security pobce, and by far thearmed forces in Africa. Most of them staunchly supportcommitment to maintain white supremacy, internal se-

i curity, and high living standards (forence we sec virtually no prospect that white minority rule over South Africa'sillion non-whites will be overtumeii in this decade, nor do we expect it to be seriously threatened during the next three or four years.

Africa ncvertitelcss faces increasing pressures forsmall but growing group of whites opposes the government'sapproach to the country's problems. The program ofof white and non-white communities is not workingcertainly will not work. White businessmen will continuegovernment efforts to relocate industry near the tribalhomelands ornd will press the regime tomore efficient use of the country's potential labor resources.are not likely to agree to provide the large sums ofwould be needed to enable the black homelands tocurrent tribal populations, let alone the populationsthem. Hence the severe shortage of jobs and housing in thewill persist, and so will the influx of blacks into cities inwork.

for change will grow, and South Africa is likelyincreasing social ferment during the remainder of this

Jta-'u nfcfe fM-

decade. The success ol the recent Ovambo strike in South-West Africa, growing political cohesion in the Bantustans, and the increasingon the government by dynamic tribal leaden seeking jobs, land, and housing for their people, have led to increased expectations, which the government is no* likely to satisfy. The regime may try to evade its responsibility for dealing with the growing economic and social malaise in the tribal areas by moving faster to declare themBut many whites probably would oppose the creation of formally independent black enclaves within South Africa's borders; and major tribal leaders would be unlikely to accept independence without heavy economic aid commitments.

he importance of South Africa to the West has been enhancedesult of the closure of theanal and the greatly expanded worldandthe Cape of Good Hope. Vorstcr recognizes this and realizes that the West is increasinglyover the Soviet naval presence in the Indian Ocean. He will seek to capitalize on these developments to advance South Africa's foreign policy objectives. In particular, he will hope that US interest in access to his country's ports and shore facilities will enable him toloser relationship with the US, implying at least tacit acceptance of South Africa's racial policies and improving its image abroad.

E. As long as the Pretoria regime pursues its present racial policies, official US ties with the South African Government will come under criticism, both at home and from otherthestates of black Africa. US capacity to influence South Africa's domestic racial policies is limited Whatever changes occur scem certain to come primarily from within. White South Africans consider their political domination to be non-negotiable.

DISCUSSION

INTtODUCTiON

n the put few yean white Southhave come close to attaining the elusive Ukker-sweet life' la Afrikaans, the language of thenotion of the Biblical land of milk and hooey. Mow, at In, the Itkkrr feu* rests on three premises: domestic security, white supremacy, and rising living standards for whites For both Afrikaans' and English-speaking whites, these are the gut issues of South African poll-tics. On all three, die administration of John Vorster, who became Prime Ministeras performed well.

et tho society Is inherently unstable. Not that revolution ll imminent, nor white rule threatened. But South Africa, which has been marked for many years by theignificant overt social and politicalnow seems to many observers to havetage where the pace of change, for both whites and non-whitei, is accelerating. Prospects for social ferment, political activism, and racial confrontation seem greater than at any time since the, and thesehave important Implications for fu-tur- US Interests hi South Africa. Are theevents in South Africa harbingers ofchanges in the social and political fabric of the society? Or, are they merely eruptionsystem dedicated to the tfafui quo? Much of this estimate Is concerned with change, though the forces of continuity and stability remain tctnnidable.

II. THE REGIAAE'S SOURCES OF POWER

A. Tha Security Forest

South Africa's modem national police force la well-equipped and well-armed. It has almost unlimited powers of surveillance, arrest, and detention. It uses these powers vigorously. Employing an extensive network ol informants to penetrate non-white society, particularly In urban areas, the police have been extremely cffectJvo In preventing unauthorized political gatherings, and In Jailing potential dissident leaden. There has been no resurgence of the drami'ic Incidents of violent protest which occurred In black townships and tribal areas of South Africa during the.

The police have full support from the govt nrnt and mostmall but vocal minority. Including some mafor

pipers, churchmen, opposition Members of Parliamentnd others, continue to protest, with some effect, restrictive national laws and the suppression ol individualBut most whites seem willing to accept the assurances of the Minister of Interior thai innocent citizens have nothing to fear. They applaud the regime's success inocial and political environment which ellnherently exptoaive.

he South African Government has alio won broad support lor its handling of thethreat. Many whites, including South Africa's leaders, believe that the current social and political ferment throughout the continent is Communist-inspired and managed; that It would be no problem without CommunistThey point to materiel and training provided by Communist countries togroups operating against white minority governments in southern Africa. They see foreign-based black liberation groupsagainst the Portuguese, Rhodesians, and South Africans as the spearhead of athrust into southern Africa. Except for an occasional land-mine planted in the remote Caprivi Strip area of South-West Africa,guerrilla operations on South African territory have been totally ineffective. This is due both to the ineptitude of Ihe guerrilla* and the effectiveness of South African security lorces. But white voters give the regime the credit. .

ho Vorstcr government has takensteps to develop and modernize South African defense forces. Expenditures onhardware amounted to more0 million in the past decade, and are increasing. South Africa produces virtually aO equipment needed for countcrinsurgency activities,arrnured cars, and Is expected to begin the assembly of Mirage set tighten under French license. South Africa has purchased three French-built attack submarines, and currently is making efforts to purchase more small coastal patrol ships and maritime patrol aircraft.

Africa's Armed Forces, whichago consisted of only aboutduty personnel0otal0 andespectively. The conscriptions bringing innnuallyear of basic andtraining to be followedeserve duty. South Africa's militarytrained for defense against bothexternal enemies. AD of these moveswith the regimesof itsthebe an important link in Westernagainst Communist military power.

B. Promoting White Supremacy

Afrikaners and their Nationalcame to power5 on the sloganseparateoess. At thehad no clear idea of how Apartheidput into effect or where it would leadto the Afrikaners the concept seemeda way to maintain white supremacyidentityountry that wasblack.

ver the nextears the government graduallyomprehensiveof "separate development" which was, inlueprint to partition South Africa ultimately into racial and tribalhen Vorster became Prime Minister, an array of laws had been passed to keep tho races separate and unequal In fobs, everyday

'-Ap-nW wdboth dreenbe Sooth Afrlcia Covernrntot pobev. In pepulw iMff. Apartheid" need to the contreti irr.powd cmfa every sphere of ecflvttr. while 'srpuaM drvelopmrnt" rnphasUn (be Wbal bt-ncUnai and borcW ledum? proenuns.

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and placet of residence. The notion of settling Sooth Africa's blacks Into ruralServor Bantustans. was given legal substancehen tho Transkel wasthe firsthomeland. The Bantustans. which South Africa's Afrikaner leaders see as the only approach to the race problem consistent with the doctrine of Apart-held, have received widespread publicity and growing attention from ihe government during the past few years.

orster's political views wou'd befar to the right in most Western countries; but in the contest of National Partyhe is slightly to the left of center. His administration has been less doctrinaire than its predecessors in Implementing separateparticularly with respect to some of its more petty aspects. But in promoting Apartheid's grand design. Vorster has moved ahead. Zululand Is in the process ofhehas begun to draft detailed plans to consolidate scattered pieces of Ciskci and Zulu territory (icend (usumber of proposals for raising money to finance economic development in the(Seehealso offers tai coiscetsions and otherfor South African Industries to locate nrar the Bantustans,iswill eventually provide faba for the growing population of the tribal home-landl.

'Li. ihe Tnniet. ZnkiUnd (to be clkd Kw. Zuk) wulaHlaBi ill Had UaMU-(h, Aambfr. -fckfclocalsurtt, ttxw.nd loci police. Ort*tiotUgn affatn, 7uki ron-rtltulloiMl amendment, customs, defense, currency and banktoft. andbe biDdiled bom PrriMU. Ex* tenhe Zofci ttgfakWs nm-pttorxx -ffl be ittbrect to irrSrw and -Me by the Republic'* prraJderl

C The Vorster Economic Boom

South Africans have continuedthe fruitstrong and rapidlymodem economy under the VorsterIts policy of promoting theand diversification of industry basedresources has been largelygovernment's direct investment inhas grown, and it now controlsof the country's output of iron,phosphates. Dependence on importssubstantially reduced, althoughstill has heavy requirements forgoods and semimanufactures.Africa continues to have adeficit, export earnings have beenby the expansion of rawA variety of fiscal andhas Helped to keep foreigninvestmentigh level.product (CDP) maintained angrowth of almost sixear inperiod, and the regimeholding price in creasesodesta year. Annual net inflows ofdoubled, as diJ South Africanare excluded by law anda wide range of Jobs in thehence unemployment among whitesunknown, and the governmentwhite Immigration.see Section III-D) has hadImpact on white living standards.

orsWt Outward Policy

Vorster government also madegains In its foreign relations. In contrastinward-looking policies of hishas actively sought to enhanceimageinVorster's willingness to talk withAfrican state coupled with his offersand technical aid, introducedissue of contention to relations

among bUck African states, and led to ipolarization of radical and conservative black governments. Among the latter, Malawi is the first independent African nation todiplomatic recognition and exchangewith SouthewAfrican leaders, like those of Madagascar, Gabon, and the Ivory Coast, have indicated qualified interest in accepting Vorster's bidialogue. They have been encouraged to do this by the French, who favor closer links between Pretoria and conservative blackgovernments to check the spread of radical influence in black Africa. This entails the risk of accelerating the demands of South African blacks.

regime has achieved morein the West, despite the UNwhich was proposedrotest against South Afi.canhas had few difficultiesmore or less secretly, froma couple of otherhe British supplied maritimeto South Africa, partly toNavy access to the Simonstownthis comes as no surprise to Vorster.asserts that South Africa'sto the West has increased asof the Suez Canal closure1 andInternational interest in theHe makes frequent reference toSoviet naval activities in the area.

SSUES OF GROWING CONTENTION

Vorster's six years of rulea period of general progress andfor South African whites, theta likely to find it Increasinglymaintain these conditions in the yearsAfrican blacks no longer remain un-

* Currentlyuarter of Weitem Europe's ed tmpcru. andifth of total world bad*

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affected by developments in the UN.Angola, and rUrv-bere. Inumber of long-smoldering problems on which the regime has temporized have recentlycontentious political issue*.

A. Troubles in South-Wast Afrko

n1 the government was unexpectedly confrontedtrike In South-Wotvast,territory which South Africa continues to ruleapsed League of Nationshe strike began in Walvis Bayroup of workers from South-West Africa's dominant Ovambo tribe. It quickly spread to mines, railways, farms, and theIndustry. Eventually it involved0 tribesmen, representing morehird of those working in South-West Africa's modern sector. The Immediate issue was the territory's contract labor system. Africans were forbidden by law from seeking work outside their tribal areas. White recruiters, however, were allowed to hire themonth contracts in white areas, always at pay below South Africa's norms and usually without their families.

fter the strike had gone on for almostays and had brought economic activity in South-West Africairtualettlement was reached among the whitethe South African Government, and official tribal representatives. The workers won concessions on wages and working conditions.

1w6 tha (then) Union of South Africa loughl without iiifcrm to win UN approvallan toSouth-Wot Africa into the union. The South African Co-woment lerwed aubaequeol UN demands loa plan for the territory toN tmiteeeWo.0 the General AsarmUy (end9 the Security Council) paaard naoIuOoni terminating the mandate and making South-Weitirect rrspontibUlly of the UN; later the Ceneral AaaemWy renamed the territoryouth Afrku coortouei to refectight to Inte-iere wrthetgtnaJ mandate.

freedom to change jobs,oice in setting the termi of their employment. Their moat dramatic achievement, however, was tothat Africans not only couldtrike fg,ifWt theanevent in South or South-Wet Africa, where strikes by bUcka are criminalcould also wring concessions from their white employers and the government.

ndeed, even before the strikers began trickling back to work, there weresigns that their success had triggered outburstside range of other long-suppressed grievances. The Ovmbosmany miles of the fence that thebad built along the Angolan border. Within the sprawling Ovambo territory,of it relateu rt'rectly to theamong sub-tribal groups, id-ing to reinforcement of the policedi African troops. Agitation spread to theside of the border, where the Portuguese dispatched an elite army commando unit to work with the South Africans toward restoring calm to the troubled tribal areas. j

hese events have made things more difficult for Vomer. In1 the World Court issued an advisory opinion that So .th Africa has no right to be in South-West Africa; this ruling, together" Securitydemand that South Africa relln .jishover the area, have brought renewed global attentii- to Soutb-Weat Africa andpressure on Vorster to Justify South Africa's role th^re. The recent disturbances discredit Vorsters argument that Pretoria's administration has the overwhelming support of South-Weat Africa's peoples. Ironically Ovambo!and has often been cited byhining example of the separate developmentAfrica'sa original solution to the race problem.

he Vorster administration, aauous to avoid additional world criticism over itsin South-West Africa, has so far acted with relative restraint in trying to end the Ovambo troubles. If the disturbances continue, however, there is no doubt the government will bring to bear whatever force is needed to restore order. But South-West Africa's blacks have tasted power. Moreover, both thestrike and the renewed interest of the UN in South-West African affairs havoraised exaggerated hopes that life is about to change for the better. Thesehave been heightenedecent visit of the UN Secretary General to discussfor self-determination. South-West. Africa will probably remain unsettled for some time to come, particularly in view of itsfuture political status.

B. Growing Blackpartheid's Mirror Image

The

olitical activism Is also on the increase among tribes within South Africa proper. Both1 the Transkei andulu, South Africa's major tribal homelands, are led by dynamic and politically astute men. Each has seized on Vorstersdevelopment" plan and is scoring points with it for his tribe against the government

he Transkei is home forhird of South Africa's four million Xhosas. led by Chief Kaiser Matanzima. While publiclyis acceptance of the BantustanMatanzima has stated privately that he plans to make the government pay heavily for his complianoo. His blunt and well-public! red demands for more local control over Transkei affairs and for additional land have not been mete has embarrassed the regime byts mi willingness to take the hard. necessary to make theork, ^ie institution. His demands also have raise! Xhaaa expectations by defining what anTranskei should be. Presently

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threatens to repudiate the whole concept oi separate devdoprnent unless thegive the Transkci more land.psetting to Vorster, who counts Matanzima as the only major tribal leader publicly in support of Apartheid.

Cats ha Buthelczi. chief executive of the four million Zulus, makes no effort to conceal his opposition to separate development, and frequently embarrasses theby persuading the Zulu legislature" to refuse toledge of allegiance to South Africa in Kwa Zulu's constitution- Believing he has no chance of reversing Apartheid, however. ButbelexJ reluctantly goes along with the homelands program, but constantly presses the government for more land, more jobs,reater Zulu role in local government.

By insisting that the regime live up to its implicit commitment to make Apartheid work, these leaders have brought Increasing publicity, from within South Africa and aoroad, on the governments policies. Thenow fully understands that black immigration and settlement in the tribalwill not take place without substantial political and economic costs. Already it has made significant concessions. The government recently accelerated the drawing up of plans to consolidate scattered pieces of Zulu(fromespiteopposition from white farmers who will have lo resettle elsewhere. Thealso has responded to Bantustan demands for economic aid (see.

Urban

blacksource ofto the government In spite of aof intensive efforts to move blacksareas to tribal reserves, almost fiveblacks lived in white urban areasa million more thanries to conceal from the whiteits failure to item the flow of blacks into white cities. It produces official statistics to show continuing movement into thebut these statistics reflect theredefinition ofhomeland" toscattered blackon the fringes of white cities. The government has sought to counter the potential threat of urban black nationalism by introducing tribal separation into the black suburbs via separate schools and residential wards. The government may be obliged, however, to deal with the urbanby some means other than this artificial linkage to the Bantustans.

here is evidence of Increasing political activism, particularly during the pastlack educational assoc-sJon, ASSECA. could be used to workolitical ends. The black South African Stu. its' Organization (SASO) has grown rapidlyembers, and hasadically black separatistonly in breaking with the multiracial National Union of South African Students, but In Its growing role in urban black political life. In December SASO leaders took over aof black organizations, and forcedesolution calling for non-coopers-tton with official politicalthe urban Bantu councils and the homelandsThis Don-cooperation strategythe policy of the Blackew political organizationIn January. But however ambitious or radical the programs, they have little chance of being Implemented, All such organizations run high risks. Long before they could becomeemote threat to the regime, they would be rolled up by the security police. Indeed, it may happen anyway.

wo other ethnic groups, the Coloureds and the Asians, have becorre more vocaland thus pose new problems for the government The Coloureds arc aneaking community of mixed race which has

Inhabited (he Cape area for several hundred rears. They consider themselves culturally linked to the whiles, not the Bantu, and arc mostly employed at marginal fobs in the white economy. Covernmeot policy toward the two million Coloureds is temporizing; it envisages their "parallel development" in the "white area" rathersians areimilar political limbo.

C. Apartheid and the Economy

area of contention is theconflict between the governmentsprogram and the needs of theof several majorhas brought the administrationwith important groups of white

fiesfr.tfionj. Southshortage of skilled laboresulteconomic growth and long-standingon the use of non-white labor.much these restrictions may haveis unclear. The businessbeen Increasingly irritated by them,found ways around them in certainThe government either makesor looks the other way whenhired toersistent shortage ofworkers. It has bowed to aneed for railway workers byall-white rail unions to let skilledthoughegregated basis.

ndurfrlal Decentralization. Thehasumber of laws aimed at developing Industry along the BanrustanThese laws, which are an integral part of therogram touccess of the Banrustans, essentially require industriesigh proportion of black employees to establish or expand only in the border areas. South Africa's business community has vigor, ously opposed this plan citing the lack ofdistance from markets, and other dawlvantages of the border areas.esult, the government has modifed itsigh-level apparatus tor appeal and review has been established,eries of(Including tax and transportationto relocation have been instituted

oHi of Banlurtan Development.the Dantustan program has not yet been costly to the government, outlays are rising1 the regime budgeted0 million to be spent within theonly about six percent of total budgetbut half again as large aso far, however, very little development has taken place. Several authoritative studies have concluded that the government should create00 new Jobs for Banrustan wonach year. Actual results fall for short of this: fewerewear within the homelands, andyear along their borders.

his situation confronts Vorsterrowing problem. For domestic politicalandesser degree for South Africa's image abroad, the Bantuston program must not appear toomplete failure. But Voiiter knows that this can be avoided only bydevelopment efforts, which would mean higher taxes for the white voters;ecent poll showed thatercent of them think the Banrustans already cost too much. Thehas only recently begun to face up to this issue, and the measures proposed to date areecent govemtreuttoanrustan develop nv.nt tax on employers and workers throughout South Africa is running Into stiff opposition, and may well be dropped. Within the past few weeks the regime, reversing its previous stand seainst any foreign Involvement in the tribalannounced that It no longer opposes foreign aid to the Banrustans; but fewnre likely to want to be involved independencies of Pretorin.

ST^T

lowing Economic

he administration has come under (Crowing criticism both from the whitecommunity and from opposition parties, for its recent handbag of trade, monetary, and fiscal matters.epressed world market for metals and agricultural productsip in South Africa's export earnings. Cold sales from current production, which in past yean financed almost half of South Africa's imports, failed to increase as rapidly as in the past At the some time growingbrought on in Large part by substantial increases in government outlays for defense, government pay raises, white wagend other factors, ledharp rise in imports.1 the governmenteries of monetary and fiscal measures to cool off the economy. These measures, together with reduced world demand for some key South African exports, were the main causes of the slowdown in real ecooomic growth from the six percent annual average ofo around four percentFor details, see Annex: Economic Trends in South Africa.)

ut these conditions do not appear to be permanent. Although there Is no prospect for nn expansion of gold productionold prices arc likely to continue to rise, and this will contribute to higher foreignearnings. Other exports ore expected to resume growing as demand picks up again In South Africa's major export markets. Becent currency revaluations also will tend toexports, Net capital inflows will continue to help fuel domestic investment, although their likelythe order0 UOO million abe substantially below those0conomic growth Is likely to average four and one-half to fiveear during the next few yean,short of theercentDespite potential difficultici the economy

Is basically strong, and neither importnor the lower economic growth rates compared tore likely toignificant adverse impact on white living standards. These constraints ore not likely to shake basic political attitudes, but could affect the government's ability to carry out programs for separate development.

IV. PRESSURES FOR CHANGE

The limits of social and political change in South Africa ore determined by the basic strength underlying white minority rule. White South Africaodern European country of four million people, with by far theeconomy and most modern armed forces in sub-Sabaran Africa. This gives theecisive advantage in maintaining their rule over South Africa'sillion non-whites, most of whom still live In primitive conditions in designated tribal or racial areas.

In spite of the regime's clearthereumber of areas in which it will be unable to direct domesticas it wouldajor concern Is the rapid growth of the non-white population, and its continuing influx into white urban areas. (Seelack and Coloured pop-ulatloni ore Increasingate of threeor more per annum,hiteof under two percent0 roughly awven million non-whites lived In white urban areas, compared toillionnd this rapid Influx will almost certainly rontirmo.

he government's officialinto white and non-whitenot working, and almost certainly will not work. Government leaden are aware of this. In spite of etricorstt pass controls and otherpi movement, far more blacks come toork In the white cities each year than ore removed to tribal areas. Moreover, the

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knows that ihe Bantustans, even under the mo if optimistic assumptions, will not support the population intended to be settled there. To bring these areas anywhereondition of economic viability, the goveroznent would have to be willing for an indefinite period, to increase by several times Its annual budgetary allocations for homeland development. This seems extremely unlikely, particularly in view of the pressure Vorster will be under during the neat several years to reduce government spending

hewing Penbiltry and some imagination In his efforts to keep the Bantu-stan program alive and to keep its costs down. Hb proposalsomelands development tax and for foreign aid to the Banrustans are intended to giveemblance of life. Late0 he hedged hb bet, however, by declaringanrustan might be given Independence without being economically viable. This kind of temporizing Is typical of the governments approach.

ut the two million Zulus and one and one-half million Xhosas who occupy iheBanrustans. and who are headed by strong-willed and politically able leaders, are not likely to slacken their efforts to extracteconomic and political concessions. Their political selfrowing. Both groups are experienced In modem, political processes: they know the value of massthe dramatic gesture,ood press. They also ore aware that thc.'r support of separate development it important to the white leadership, and their Labor to Southindustry. Their reUtionship to white South Africa la therefore not entirely one of dependence. The Vorster administrationwin be faced with growing mtiveness in the Banrustans. and escalating demands forerritorial consolidation, (obs, welfare, and developmentbeyond Its Intent or capacity to deliver,

mall hut growing group of whites, mcludingressing the regime to change. These people, who includestudents, editors, churchmen, andprominent and influentialamongincreasingly impatient with the present leaders' narrow, laager men-

the black bamrlaisdi have beenaboutercent of South Africa's land area.

hey ire distressed by (be moreixtd degrading aspects of Apartheid, and by the admin titration's police tactics, and are embarrassed by the unflattering image of South Africa which the government protects abroad. They would like to tee someof South Africai political and social Institutions; most of them favor some form of racial separation, but they want it to be more humane and less doctrinaire than the policy currently being followed.

ut this opposition still amountsmall minority of white opinion. Vorster'sParty (NP)eats Inthe United Party (UP) whichess doctrinaire approach, but is no lessto white supremacy,heParty, which offers the only real alternative toa multiracialonly three ml one-half percent of tha vote and has one teat inight-wing Afrikaner party, favoring an even tougher policy toward non-whites, also poDs about three and one-half percent. Recent local elections haveignificant swingboth left and right opposition candidates.

orster's NP would win an easy major-icy if general elections were held today; but the heavy white support which the party has ec-Joyed for decades is eroding. Between now and the general elections scheduledhe Vorster government will come under increasing pressure to show that it can effectivelyomplex, modern cconoi.iy, and that it can maintain white supremacy in tie face of mounting black demandsigger stake in the society. To do these things without losing Its hard-core Afrikaner support will tax the regimes capacity to be flexible without

'Loafer ortxltully meant the defemtvo cirri* of wagons which tha Born wonid formthair nicuapanrnri during the bag owe.escribes the brail fed. defrnatie, inward-looking aratnde of mot! Afrikaner*.

appearing to make damaging concessions.there is talkartyN'P "modernists" and UP "moderates" Joining forces to dump Vorster and the moreof histhis rad'eal is likely to occur in the next few years.

V. THE OUTLOOK FOR CONTINUITY AND CHANGE

e see virtually no prospect that white minority rule in South Africa will bein this decade. Nor do we expect it to be seriously threatened during the next three or four years. The policy of separate development is not likely to be sooneven though there may be some small shifts in party align men ts over the issuesoft"hard" line on Apartheid. We do expect Increasing ferment to come in some, probably all, of the racial compartments of South African society. The black community is showing more vitality and cohesion than it has for many years, Black nationalism will grow slowly and cautiously In the atmosphere of polite repression and tribal affinities; but it will not be snuffed out In any case.

he response of Vorster and hisdepends largely on howhallenge they perceive to continued white supremacy. The potential for spontaneousof violence clearly exists. There is no evidence, however, that the non-whites are organized for mass action. But to white Southhe examples of the Ovambo general strike In South-West Africa, the Rhodesian blacks' concerted opposition to the Smith-Heath settlement, and the recent politicalwithin the Bantustans indicate that southern Africa's blacks are by no means as docile or politically apathetic as was generally assumed. Certainly large-scale civil disorder would bo met with heavy repression, which the majority of whites wovld support. But short ofmall but growing

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number of whim willoftening of Apartheid. Furthermore. Vorsters failure to act decisively as Use Ovambo strike dragged on moreonth, and his vacillatingon Banrustan development, suggest that even the conservative white leadership is no longer as confident or as unified as advertised.

In the short run, atoftening of rigid Apartheid policies probably would not have much effect on the governments ability to control non-whiles. The petty harassment! of Apartheid could be dropped withoutthe security of the whiteSimilarlyapidly-growing economy white living standards would not be likely to sufferlexible application of Jobtoward expanding opportunities for non-whites. Indeed, it appears that the Coloureds are in this wayradual it facto entry into the mainstream of white economic life. The sticking point for many years will remain the monopoly of political power by whites. And hereittleof significant white concessions.

In the next few years, and probably even longer, the Banrustans will be thesource of black political expression. Their growing legislative and administrativethe example set by dynamic tribal leaders, and the quickening sense c* political cohesion suggest that they will find ways to increase their capability to extract concessions from Pretoria. Inevitably they will exercise greater control over their own affairs, and will probably seek to extend their Influence toblocks.

The Vorster government may try to move faster toward Bantusr-ji self-government than It previously Intended. It may see the granting of Independenceseful device in alleviating the growing political discontent and potential dissldcnce in the homelands. The Pretoria regime might also feel that it could get others to share the burden ofaid claims coming from an Independent Transkei or Zululand. For the next two or three years, however, It is unlikely that the white voters will be prepared to see formally independent black states created in their midst, nor are the main Banrustan leaders likely to agree even to nominal Independence without greater South African commitments of development aid.

the longer term it seemsblock demandsigger stake inSouth African society will grow, andprospect of violent social upheavalBui the whites seem unlikely tovoluntarily any significant degreeover South African political andlife. They are likely to continuehite retreat on Apartheidlead to black demands for stillIn any case, the awakeningconsciousness and economic powerAfrican blacks, and the probableemergence of more demanding, moreleaders, make it likely that Southcommunities will chart their ownaction, largely independent of the

VI. IMPLICATIONS FOR THE UNITED STATES

The South African Government has much to gain from improved relations with the US. Aside from the tangible advantages of Improved tradeore favorableUS attitude toward US investments In Southarming trend in its US ties wouldig boost In South Africa's effort to gain international respectability and at least tacit acceptance of its racial policies. For these Important reasons, the Pretoria regime almost certainly will continue to press forrelations with the US.

US eoncerns with respect to Southfocus on strategic-military considerations.

US trade and mvrstro-nti, and Ihe Impact of South African racial policies, both on official US relations with black Africa and onfirms with interests in South Africa.

SO. The Importance of South Africa to the West has been enhancedesult of the closure of the Sues Canal and the greatlyworldandthe Cape of Good Hope.7 the Soviets have made about onenaval transits around the Cape.)recognizes this and realizes that ihe West Is Increasingly concerned over the Sovietpresence in the Indiane will seek to capitaLze on these developments to advance South Africa's foreign policyIn particular, he will hope that USin access to his country's ports and shore facilities will enable him torionship with the US, implying at least tacit acceptance of South Africa's racial policies and Improving its image abroad.

S direct investment In South Africa totalsourth tbe size of Britain's, and tho largest chunk of Ua investmenl in sub-Saharan Africa. To the ex-

he Um of Soviet Military Power inatedECkET.ticmefcac at Sorts* acUvXira tr> tbe Indian Ocean area.

tent that other countriesarder line on foreign Investments, the profitable and stable Investment climate In South Africa looks good to US business. Recently, however. US firms with South African branches have come under hud and detailed criticism at home for their cmployment practices and other activities In South Africa. Such xrutiny already has led several US firms to Improve workingIncluding wages, braining, and promotion opportunities, etc, for their black Southemployees. This in turn, has led other foreign-owned firms In South Africa to review their employment practices.

s long as Pretoria pursues its present racial policies, official US ties with the South African Government will come under criticism, both at home and from otherthe Independent states of black Africa. NATO links to Portugal, and US financial and economic interests in southern Africa, enable critics to link the US lo the southern Africa problem. In fact, US capacity to influence South African domestic racial policies isWhatever changes occur seem certain to come from within, and largelyesult of changing white attitudes. But whiteis seen by South Africanthe Afrikaners, who claim no othera matter of survival. It Is not negotiable.

ECONOMIC TRENDS IN SOUTH AFRICA

AFRICA'S ECONOMICSouth Africa is an extreme example of

the dual economy. At the apexillion whites, who liveodem, divenifk3economy, and who enjoy livingcomparable to those In the US-illion blacks and other non-whites live on the fringes of the modern sector, and many of these enjoy living itandai<ii which are high by African standards, though far below those of South Africa's whites. At the base are an0 miLUoo blacks who must live among the scattered pieces of rural landto each tribe as fts homeland. Most of these people are engaged in extremelysubsistence agriculture.

Africa's wealth is based on itsresources; it is one of the world'sproducers of gold, diamonds,uranium, manganese, antimony,Its major export is gold, whichto bring inillion dollarsexchange each year.

manufacturing Is far moreto South Africa's economy. Thehasigorous policy ofindustrial eipansion. Through astate corporations. In Iron andand phosphates) thearger share of nationalany Industrial country outside thegroup of states. In addition thehas encouraged both domestic andprivate investmentesult of these policies, manufacturing now contributes the largest single share of gross domesticining accountsittle underercent andless

II. DEVELOPMENTS

uring the last half ofhe South African economy continued torapid economic growth, onlyprice rises,avorable international payments positioo- Real growthear.In past periods, by far the larger part of this gain went to South Africa's white minority.

lthough fixed investment grew less rapidly than output, the investment boom earlier inrovided sufficientcapacity to cope adequately with rising demand. Exports other :ban gold rose4 mill ton (morend importsless rapidly than overall output.account deficits were thereby reduced, even though goldin the pastfor almost half of South Africa'sexportonlySubstantial net inflows of capitalduring this period. By the endouth Africa's foreign reserves amountedhan twice5 total.

oward the end of the periodspending increased rapidly, a* stagnant gold output and the prospect of UN economic sanctions persuaded Pretoria to raise

I

TABLE II

SOUTH AFHICA: BALANCE-OF-PAiMENTS*

and the unfavorable foreign payments situation call for some damp ing of the growth of overall demand for the oeit three to fouroreign payments problems are likely toonstraint throughout the period because of the poor outlook for expanding gold productioc.

lthough prospects for increasing gold production are poor, rising prices probably will Increase gold's contribution to. On balance, oxpected declines in output by established mines should be about offset by production from new mines planned to be opened. Hence annual gold output is expected to beat about current levels during the next several years. Leaving aside speculativewhich have driven the free market price of gold to an abnormallyn ounce currently, free market prices are likely to rise more or less parallel with the growth In demand for non-monetaryannuallyhis means that South African free market gold :ales from

nirrrnt output Could rr.il iiillion,

or ooc-fourth more than01

Prospects for increasing exports ofother than gold are relatively favorable. The five percent devaJuatJon of the rmnd against the dollar and the revaluation against the dollar by several countries that aremarkets for Souththe UK. Japan, West Germany, and other West Europeanstimulate South African exports to these areas. Ei'lnggrowth prospects2 would alsoavorable impact Agriculturalalmost cur-third of total exportsay achieve the post-World War II growth rate of near six percent annually, under normal climatic conditions. Wool sales, for example, should improve because2 percentof the rand against tho currency ofajor wool export competitor. Although the currency realignments willSouth African exporx, the impactew importantbe at least partly offset by other factors:increased com petition from European fruits when thocurrently buys one-third of South Africa's total exports-enters the Common Market

Even if, as seems likely, total export earnings rise0 billionouth Africa could not maintain imports during the next couple of yean at the1 level of HI billion. Imports may, In fact, decline this year. The currency realignments1 will cause prices of imported commodities to rise by an average of aboutercent, reducing sharply theirDemand for imports will continue to be damped, in addition, by fiscal and monetary restraints designed to curb inflation. Someimport controls nevertheless may have to be maintained for some time.

retoria must work toward achieving near-balance in the trade account because net capita] receipts probably will be largely offset by deficits on the services account Netinflowsre Likely to belower than the unusually01 levels, which averaged0 million per year. Capital inflows were large in the last two years because of substantial government borrowing abroad, excessive short-term foreign credits to Importers, and long-term private investment inflows attracted by high Interest rales and profitable business op-portunitlos. The incentive for long-terminvestment remains, but net inflowswill not0 million annually and may be as low0 million. Even inflows at the upper end of the range would little more,than cover the prospective, servicedeficits.

II At tho anticipated average annualercentercent rate. South Africangrowth would about matcherforniance but renvin somewhat below the record of. Changes of thisIn economic performance would hardly be perceptible to most South Africanseriod ofew years. The government probably will, hov.evcr, have to moderate its spending for infrastructure to supportdevelopment as well as <or some of the programs associated with separateIts resources will permit only slow progress In developing the black homelands and the border industries.

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