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Racial unrest in South Africa -- a fallout from weak economy

Recent rioting and work stoppages by black workers at six gold mines is the most visible example yet of how the current downturn in the South African economy can have social repercussions.

It remains an open question as to whether the unrest, which has taken the lives of at least six black mineworkers, will spread to other spheres as the downturn deepens.

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Aggravating the economic situation is the depressed price on world markets of gold and other minerals which form the backbone of the South African economy.

With the economy now projected to grow only marginally this year and not at all next year, a top government economist concedes there is considerable concern about the social consequences among blacks of rising unemployment and wage gains that may trail inflation.

The biggest obstacle for black miners -remains entrenched discriminatory job practices that preclude blacks from holding certain higher-paying skilled jobs, which are reserved for whites.

Black miners were recently awarded a pay increase of 11 percent while the prices they pay for food, clothing, and other consumer goods have been rising at over 16 percent. Making matters worse, there has been drought in the rural areas where most of these miners' families live.

Dissatisfaction in South Africa's important mining sector is not confined to blacks. White miners had been threatening to strike over the industry's offer of a 9 percent wage increase until government intervention helped secure them a 12 percent increase.

The mining industry points to the world mineral market as justification for its relatively low wage increase. The most dramatic and important development for the South African economy is the sharp fall in the gold price from a high of over $800 per ounce in 1980 to a price of about $300 per ounce today.

Indeed, the South African government has just reported a 15 percent decline in the first quarter of 1982 in mineral export earnings. The causes go beyond the low gold price. Important industries like the American automobile manufacturers are using less South African platinum group metals because of sluggish car sales.

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With South Africa so dependent on mineral exports, the government strategy of relying on the economy to alleviate political frustrations among blacks may become more suspect, at least during the current economic slump.

''We are very vulnerable, not only because our exports are such a large portion of our total economy, but because they are so subject to large price fluctuations,'' says a leading bank economist.

Last year mineral exports accounted for 66 percent of the value of all exports.

Heavy reliance on exports would not be so precarious if they were primarily manufactured goods, which tend to rise consistently in price, albeit at varying rates. Mineral commodities on the other hand can fall quickly and unpredictably.

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