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Apartheid System Takes Its Toll

Barriers to blacks, duplication of services may hurt more than sanctions and divestment. SOUTH AFRICAN ECONOMY

SOUTH AFRICA's economy, faced with slow growth and a black population expanding by more than 3 percent a year, will only slip further unless the government liberalizes its policies. Racial integration is inevitable if the country is to reverse its fortunes. This assessment by Africa economist Stephen Lewis, author of a forthcoming book entitled ``The Economics of Apartheid,'' contradicts the notion that recent relaxation in apartheid policy is due primarily to international sanctions and divestment policies.

Five months into his presidency, South Africa's leader Frederik W. de Klerk has released certain political prisoners and allowed black political parties to meet openly.

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Mr. Lewis points to economic pressures which have forced the government to at least look at integration. Looming beyond the country's isolation are a $20 billion plus external debt and a stagnating economy that is choked by the costs of apartheid.

``The country's economic performance has been pitiful in the last nine years,'' says Mr. Lewis, who is president of Carleton College in Northfield, Minn.

Pretoria's legal mandate for segregation has drawn international outrage for decades. Government and university-led sanctions and boycotts of the country have been designed to punish the regime and force a correction in its behavior.

Impact of sanctions

Chris Van Wyk, the chief executive officer for Bankorp, calculates that international sanctions and divestment have depressed real consumer spending by around 15 percent and lowered the country's gross domestic product at least 10 percent from what it otherwise would be. Dr. Van Wyk says this translates into about 500,000 fewer jobs in a country of 35 million people. Without sanctions, he says, more new jobs could be created for young people looking for work.

Lewis stresses that a lack of external investment is not what debilitates the economy, but rather the government's own policies:

``The simple relationship between foreign investment and economic growth has not been true in the past, nor is it likely to be true in the future.... For the past 20 to 30 years, South Africa has financed virtually all of its growth from domestic investment.''

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Inefficiencies of apartheid

Domestic growth in the country has fallen off during the past 15 years, says Lewis. The country's economy, which slowed during the 1970s, came to a virtual standstill during the past decade. Yet, he says, it should be growing at a healthy rate, considering a domestic savings rate of 25 percent as an important barometer of an economy's ability to expand.

Mario Van Niekerk, an economic official at the South African Embassy in Washington, acknowledges that the economy's growth rate has been rocky. ``In 1984 it was minus 4 percent,'' he says. ``In 1986 and 1987 it was a positive 2 percent. In 1988 it was 3.7 percent and by 1989 it dipped down to 3 percent.''

These government figures are regarded as too high by Lewis. He says the country is vexed by a dual system that eats away at investment and productive capacity. By imposing separation and a lower status on blacks, the government must invest huge sums in its national security force, perhaps the government's largest nonproductive investment.

The dual system, says Lewis, stunts economic growth because the country's majority black population is largely prohibited from participation beyond that of a menial worker.

By hindering blacks from takingbetter jobs for better pay, the government cuts the economy off from a market that could purchase domestically produced goods and services as well as supply them.

Among barriers to blacks cited by Lewis:

Limited access to land and limited right to purchase property for investment or home ownership. Thirteen percent of the country's total land area (containing only a small portion of the country's mineral resources) is allocated to blacks.

Limited educational opportunities.

Obstacles to higher-paying jobs.

Little access to credit.

Furthermore, statistics show that the duplication of services such as transportation and education - one for whites and one for blacks - is an enormous drain on both public and private sectors. Mr. VanNiekerk admits that there are serious inefficiencies caused by this duplication.

Exclusion persists

Lewis points to isolated labor markets and a policy of limiting black education as two main areas in need of change. The tension between simultaneously needing black labor and wanting to exclude them from white areas has been a theme in South African economic, social, and educational policies for decades.

Mr. De Klerk has not departed from these policies.

The South African government is currently seeking skilled immigrants from East Germany, according to a statement issued late in December by the Department of Home Affairs in Pretoria. Missions in Bonn, Munich, Vienna, and Berne have been directed to consider suitable East German immigrants. The department's statement stressed that before any immigrant is employed, the Department of Manpower will see if a suitably qualified South African can fill the position.

Among the trained labor on Pretoria's search list are qualified engineers, computer scientists, technicians, accountants, doctors, geologists, metallurgists, and artisans. South African blacks are not eligible candidates, because they only have limited training, says Lewis.

By deciding to hold back blacks from gaining skills and knowledge, the government is directly causing the shortage it now seeks to eliminate through the import of foreign labor.

``There is a shortage of skilled labor in South Africa - there has been for decades - because the government neglected to do anything about black primary and secondary schools,'' says Lewis.

But, as he writes in his book, ``it is inevitable that the development of the economy as a whole will draw increasing numbers of blacks into the modern, high-wage, high-productivity sectors.''

A recent editorial in the South African ``Business Day'' notes optimism about the country's economic prospects for 1990, ``much of it based on the hopeful view of the consequences of President De Klerk's governance.'' The paper identifies De Klerk's ``mood and style'' as the most significant feature of his four-month-old term.

Divisive politics

Lewis says ``the government has been mildly sensible by allowing dissent and [black] political groups to openly meet.'' But he is cautious about the political prospects for change:

``The differences among people opposed to apartheid and post-apartheid policies have become much sharper. The only thing they're unanimous on is that apartheid must go; the steps on just how to achieve that end are openly debated.''

Labor Party leader Allan Hendrickse, who advocates a nonracial geographic federation for South Africa, with proportional representation in the federal assembly, calls for all South Africans to stress their common ground, not their differences. A bill of rights could remove fear and distrust, he told the party's congress on Dec. 27, 1989.

By freeing the economy of apartheid's restrictions, the country could enjoy a period of marked growth and establish an environment more conducive to integration, says Lewis. A more vibrant economy will mitigate losses for whites and accommodate the rights of blacks, the economist says.

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