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Backgrounder #584 on Africa

June 5, 1987

U.S. Sanctions on South Africa: The Results Are In

(Archived document, may contain errors)

i 584 June 5, 1987 U.S. SANCTIONS ON SOUTH AFRICA THE RESULTS ARE IN I INTRODUCIION The first results of Western economic and politi cal sanctions against the government of South Africa are in: Apartheid's supporters have been strengthened while those seeking reforms have been weakened. "I'he evidence of this is abundant In the whites-only election last month, the ruling National Party (NP) was returned with even greater control over the Parliament than before In the election, the racially moderate Progressive Federal Party (PW) was replaced as the official opposition party in the Parliament by the pro-apartheid Conservative Party (CP T h is means that for the first time since the institutionalization of apartheid in 1948, the Pretoria government will be criticized in the Parliament not for moving too slowly to abolish apartheid, but for moving too quickly U.S. influence in Pretoria has be e n reduced, as the South African government has rejected what it views as unacceptable foreign interference in its internal affairs Economic sanctions have not damaged the South African economy severely. Most South African producers have found new markets for their products.

Further, sanctions have caused a short-term stimulus, as the economy moves to create its own substitutes for former imports they have been felt by blacks--precisely the people they were supposed to help set back the anti-apartheid campaign.

U.S. corporatioh have sold their manufacturing plants and assets to South African businessmen at firesale prices To the extent that the effects of sanctions have been felt in South Africa Disinvestment by U.S. corporations doing business in South Afr ica also has -2 The South Africans then are free to terminate U.S.-created social responsibility programs and once again can bid on South African government contracts positive changes that have taken place over the past several years within the Afrikaner leadership Key elements .of the governing coalition had be n to rethink their positions on apartheid. Sanctions have chilled many of those re r orm efforts.

In light of this overwhelming evidence, it is puzzling why the Reverend Leon Sullivan, author of th e Sullivan Principles (which suggest a code of corporate responsibility for U.S. firms operating in South Africa just days ago called for complete corporate withdrawal from South Africa. Perhaps the Reverend Sullivan who has not visited South Africa since 1980, simply is unaware of the setbacks to reform there More disturbing, these negative reactions to sanctions have overtaken many Congress soon will be looking at South Africa once again with a view to imposing new and harsher sanctions against Pretoria. June 12 will mark the first anniversary of the imposition of the nationwide state of emergency in South Africa and it is virtually certain that congressional and media liberals will use that date to focus attention on the lack of progress in eliminating a partheid over the lasbyear.

They hope to build a climate of public sentiment throughout the U.S. that will support the imposition of new sanctions in October, when, by law, Ronald Reagan will have to report to the Congress on the situation in South Africa Wrong predictions. Instead of calling for more sanctions against.South1 Africa Congress should examine closely the results of the sanctions already imposed by the West. Predictions by advocates of sanctions have been proved wrong: Far from pressuring Pret o ria to speed the pace of reform, sanctions have brought the reform process to a halt and have given South African State President P.W. Botha an excuse to call an election that he knew his party would win. Nor have sanctions resulted in greater U.S. influe nce in southern Africa; U.S. influence in Pretoria is down sharply, without an offsetting increase in influence throughout the black community m South Africa.

More important, certainly, is the fact that sanctions have not hurt only the whites, as they were intended. Instead, white South Africa, largely shielded from the effects of sanctions, has watched unaffected as the burden has fallen. on. blacks.

U.S. and other Western corporations active in South Africa, instead of pressuring the government for refor m, as they had been over the last several years, increasingly have opted to leave South Africa altogether. In doing so, they are selling their assets to South African businessmen who are getting rich in the process, while terminating the companies social responsibility programs which enormously helped black communities.

Sanctions thus not only have not done what they were supposed to do, they have actually been counterproductive, and have set the anti-apartheid struggle back several years. This is precisel y what many critics of sanctions predicted. The evidence of this is so compelling, in fact, that the African National Congress, the Pretoria regimes fiercest foe, now seems to be having second thoughts about -3 sanctions. At a late-May conference for busi n ess executives in London, ANC President Oliver Tambo indicated to assembled business leaders that sanctions were causing more harm than good in South Africa. The ANC has found that sanctions have cost it support throughout black communities, which now bla m e the ANC for the unemployment resulting from sanctions.1 Using Carrats For the short term, the Administration should make clear to Pretoria in the strongest possible terms its displeasure with any moves away from reform. The South African government shou ld be encouraged to put its overwhelming election mandate to good use: with such a strong majority in the Parliament, the NP should move quickly to resume its reform program.

Over the longer term, the U.S. should begin to apply the lesson of sanctions against Pretoria: when dealing with Afrikaners, the carrot works better than the stick. Instead of threatening more sanctions against Pretoria if the government does not resume t h e reform process, the Administration should offer to make efforts to lift the sanctions already in place. Positive incentives, not negative, offer a more realistic hope of achievmg the desired results in South Africa PRESA"STRENDG: CRACKSINTHEW"lESUP~U no t simply between blacks and whites. Black South Africans themselves disagree over key questions, such as the best strategy for eliminating apartheid,,(violent or nonviolent and the best type of economic system to set up after they achieve power (socialist o r capitalist Contrary to the conventional wisdom, the struggle for power in South Africa is Nor is white South Africa united. At the most basic level is the split between whites of English descent (1.5 million) and Afrikaners (3 million Traditionally Engl i sh-speaking whites, who dominate the financial and commercial fields, have been more open to racial change than Afrikaners, who have dominated the government and politics of the nation since 1948 Even among the Afrikaners, divisions exist. Many Afrikaners in recent years have begun asking themselves if they can really hope to hold on much longer to a system that so clearly is changing. Two schools of thought have emerged. over the question of how best to protect Afrikaner culture 1) The "exchsionisf school , which argues that the 'hlnerable" Afrikaner community should be "aggressively protective" of its language and culture, since all other elements in the society oppose it; and 1. See Peter Younghusband, South African Rebels Back Off on Sanctions The Washin g son Times, June 2, 1987, p. lA. -4 2) The Wusionist" school which believes that Afrikaners have established themselves well enough to be cdnfident of the future, and that the best way to protect their culture is "to allow others to be attracted to it."2 K e y elements of the traditional governing coalition apparently have come to accept the inclusionist view Among the elements -of the governing coalition to have accomodated themselves to the new view The Church Afrikaners long have viewed themselves as one o f God's chosen people, a group of modern-day Israelites. The Nederduitse Gereformeede Kerk [NGK, the Dutch Reformed Church has supplied the theological underpinning to apartheid.

Over the last 12 years, however, the church has changed significantly. In 197 4 it backed away from its traditional affirmation that apartheid 'was specifically blessed by Scripture, to a somewhat weaker position declaring only that apartheid was not contrary to Scripture. Throughout the early 1980s a growng number of NGK ministers urged the church to reexamine its justification of apartheid. Last October the church synod elected the liberal Johan Heyns as moderator, and declared that The Dutch Reformed Church is convinced that the application of apartheid as a political and social s ystem which injures people and unjustly benefits one group above another cannot be accepted on Christian ethical grounds since it conflicts with the principle of neighborly love and righteou~ness Rejected by the church, apartheid cannot long last in the r i gidlycalvinist South African society The Intelligentsia Apartheid is not only a system for white control, it is an ideology. As such, it needs an intellectual as well as theological justification. Historically, the University of Stellenbosch, outside Cape Town, has served as apartheid's "brain-trust contributing the philosophical defense of apartheid. It is the oldest Afrikaans language university in South Africa; six of the nation's eight Prime Ministers were graduates. State President P.W. Botha currentl y serves as the chancellor of Stellenbosch.

Stellenbosch has witnessed fundamental changes in the past several years culminating in March, when 27 leading Stellenbosch professors, including Sampie Terreblanche, one of the State President's closest advisers , resigned from the National Party and issued a declaration demanding the elimination of all remaining 2. See Allister Sparks, "Afrikaner Group Seeks Out Blacks The Washington Post, Mar& 16, 1987 p. Al 3. See "Dutch Reformed Synod Denounces Apartheid in F oreign Broadcast Information Service Middle East and Africa [hereinafter referred to as FBIS-MEA] October 23, 1986, p. U

10. See also "Johan Heyns and the NGK's Change of Heart interview with Johan Heyns, in Leadership magazhe, Vol. 5, No. 5, 1986, pp. 46- 50. -5 discriminatory laws? Calling themselves the "Discussion Group 85 they also demanded that Pretoria declare its "unambiguous intent" to share power effectively with blacks? The 27 were soon joined by over 300 other members of the faculty out of a tot a l of 700 who signed the declaration to demonstrate that the protest was in fact widespread Rotesting Students Protest against government policies has spread throughout the student bod at Stellenbosch. By mid-1986 a student organizabon protesting other uni v ersities. Most recently, at the University of Cape Town, ten students were injured on April 27th when police fired birdshot into a group of 300 students protesting a cross-border raid into Zambia.6 And police arrested 120 students on May 4 at the Universi t y of Witwaterstand, in Johannesburg, when the students refused to disperse after a student meeting was declared illegal The secret Society established as a secret society to help Afrikaners find jobs. Since then, the organization has grown in size and inf l uence: it boasts a membership of 12,000 and includes the vast majority of Afrikaners in government, media, academic, and church leadership positions. To conspiracy-minded observers, the Broederbond is the ultimate refuge of "the Super-Afrikaners It serves the National Party as a ready reference sounding board of Afrikaner opinion: in several cases, pending NP decisions secretly have been circulated throughout the Broederbond 1 to- ascertain Afrikaner reactions.8 The BmedertJond, though broadly representati v e of Afrikaner opinion, has had its divisions as well. In 1969, the organization splintered following the break-away from the National Party by die-hard apartheid supporters who formed the Herstigte Nasionale Party (HNP This episode was repeated in 1982, w hen another parliamentarians, led b former Broederbond Chairman Dr. Andries Treurnic t, left conscription ha dr been established there. Protests also have taken place at several Founded in 1918, the Broederbond Brotherhood in Afrikaans) originally was rp O f the National Party to I orm the Conservative Party 4. Some saudioneers may point to the break in March--that is, six months after the im sition of sanctions--as evidence that sanctions have had a positive effect. Professor Terreblanche &elf re'ected tha t notion when asked, calling sanctions "disastrous for the whole process of reform in South AfJrica."

Conversation with Terreblanche, Washington, D.C., May 21, 1987 5. See "Academics Ask Government To Declare Reform Intent in FBIS-MEA, March 9, 1987, pp.

U5-

6. See also Bruce W. Nelan, "Rockiog the Cradle of the Volk," in Z'ime, May 4, 1987, p. 88 6. See "Cape Town Students,, Police Clash During March FBIS-MEA, April 28, 1987, pp. U3-4 7. See "Police Break Up Witwaterstand Student Meeting in FBIS-MEA, May 5, 1987, pp. U3-5 8. See Ivor Wilkins and Hans Strydom, The Su&r-Afikaners: Inside the Afikaner Bmdebond Johannesburg Jonathan Ball Publishers, 1978 Johannesburg Sun

Times The book is based on 15 years' worth of confidential B m&bond documents handed ov er by a dd ected Bm&bond member to reporters of the -6 Meeting with Blacks More recently, attention was focused on the Broederbond when it was discovered that it had circulated a document to its members advocating negotiations between the government and m a jor black opposition groups. Current Broederbond Chairman Pieter J. De Lange met with top African National Congress leaders in New York last June and arran ed a meeting between 30 black radical monolithic Broederbond is evidence of serious change within t h e Afrikaner leadership caste youths from Soweto and 30 white youths; 8 Such .ferment 'within the previously The Politicians Since their electoral victory in 1948, the Afrikaners, through the National Party, have ruled South Africa without serious challeng e . As recently as 1977, some 83 percent of the Afrikaner population supported the NP.lo Through the early 198Os, however, the NP, led by P.W. Botha, moved to abolish the more obnoxious elements of apartheid. Following the 1982 announcement of its reform pr ogram, 16 die-hard pro-apartheid parliamentarians broke away to form the Conservative Party.

The NP continued to move toward reform, losing Afrikaner support in the process to both the CP and HNP. A group of younger, reform-minded NP parliamentarians--dubb ed "New Nats" by the South African media--emerged to push the NP toward further, faster reform.

Following the announcement of elections for May 1987, however, the National Party reform program came to a halt. Security replaced reform as the predoxpinant N P campaign issue. Wynand Malan, a prominent New Nat leader, resignedit his position in the NP and ran for Parliament as an Independent. He was joined by Dr. Dennis Worrall, who resigned his position as South Africa's Ambassador to Great Britain to return home and run as an Independent. Worrall's chosen opponent: Christopher Heunis, Minister of Consotutional Planning and Development, the author of the NP reform program and one of the heirs apparent to the State Presidency.

Malan was reelected to his seat, a nd Worrall came within 39 votes (of almost 9,000 cast) of upsetting Heunis. Following the election, Worrall promised to continue his efforts on behalf of reform, leading observers to conclude that he would form a new extraparliamentary organization THE IM P ACT OF WETIERN SANCIlONS Reagan's veto of sanctions legislation. The Comprehensive Anti-Apartheid Act of 1986 (CAAA) prohibits new loans to the government of or new investment in On October 2, 1986, the U.S. Senate, by a vote of 79-21, overrode Ronald 9. See Allister Sparks Afrikaner Group Seeks Out Blacks: Meeting with ANC The Washington Post, March 16, 1987, p. Al.

Leader of Key Secret Society Describes 10. See N. Brian Winchester Republic of South Africa in George E. Delury, ed World EncycroPedia of Pol itical Systems and Pa-es, Vol. II, NepaUXmbabwe (New York Facts on Fie, Inc., lw p. 915. -7 South Africa; forbids the export to South Africa of crude oil, petroleum products and computers; bans the importation from South Africa of gold krugerrand coins ag r icultural products and food, iron, steel, coal and su ar; and terminates direct flights from South Africa to the U.S and vice versa. IF group "p o legislators argued that sanctions would harm South Africa's economy, and histicatedSgds. The public justific a tion given for. the CAAA varied. One thereby force Pretoria to abolish apartheid. Another group, believing itself more sophisticated in its understanding of the efficacy of sanctions as a policy tool argued that though sanctions would not significantly pr essure the South African government, it was inevitable that blacks would soon rule South Africa, and the U.S needed to "send a signal" that it was "on the right side of history."

These "sophisticated legislators further argued that the sanctions they hoped to impose specifically were limited in scope to hurt only whites. Other legislators, who supported not just sanctions against South Africa but also disinvestment by U.S corporations in South Africa argued that disinvestment would remove apartheid's exter nal sources of support.

None of the justifications have proved accurate. Sanctions have undermined reform in the following ways economy significantly enough to pressure Pre toria into further reform. Instead, the reform process has come to a halt as white South Africa reacted negatively*.to what it viewed as unacceptable foreign interference in its internal affairs. Serious reforms that had begun were overtaken by the sancti o ns. In a "rally-round-the-flag" reaction to Western sanctions, many liberal South African whites who had pressured the government for further change ended their protests and supported their government 2) Redud US Muence. Nor have sanctions increased U.S. i nfluence in South Africa. Even the Washington Post, which editorially supported sanctions last year, belatedly recognized the counter-productive nature of sanctions, publishing a news anal is last December entitled "Sanctions Said To Weaken U.S. Influence in Pretoria The article detailed loss of U.S. clout in South Africa as a result of sanctions. Example: Howard Wolpe, the Michigan Democrat, chairman of the Affairs Committee Subcommittee on Africa, wanted to lead a. House congressio Forz delegation to Sou t h Africa this January to examine the effects of sanctions. He and his delegation were denied visas by South African Foreign Minister Roelf "Pik" Botha, who declared "I know of no greater enemy [of South Africa] than Mr. Wolpe."U An Agency for Internationa l Development official 1) Positme Changes Halted. Sanctions have not harmed the South African 11. See "Comprehensive Anti-Apartheid Act of 1986 Public Law 99-440, October 2, 1986 12. See Joanne Omang Sanctions Said to Weaken U.S. Influence in Pretoria The W ashingson Post December 18, 1986, p. A62 13. See "Foreign Minister Interviewed on Foreign Relations FBIS-MEA, December 23, 1986, p. U5. -8 planning to do research on the health conditions in black "homelands" in South Africa was also refused entry by Pret o ria following the imposition of sanctions astonishin success of the Conservative Party, which captured an estimated 43 official opposition party in the Parliament.14 As the strongest opposition party, the CP will influence greatly the agenda for debates i n the Parliament. For the first time since the National Party's victory in 1948, it will no longer be criticized in the Parliament for moving too slowly to eradicate apartheid, but for moving at all 4) Harmful Impact on Blacks To the extent that sanctions have hurt South Africa's economy, they largely have damaged those sectors in which blacks make up the dominant share of the workforce, such as agriculture and food roducts.

Example: exports to the U.S. of rock lobster, which amounted to P 30 million annual ly, were terminated as a result of the CAAA The U.S. market accounted for 75 percent of South Africa's exports of rock lobster and 50 percent of the total volume. 'Though South African-distributors have found new markets for almost 70 ishermen bear the br u nt of the monetary 1oss.s Afrikaners, are largely shielded from the effects of sanctions. Over 40 percent of the Afrikaner adult population works in the South African government bureaucracy. As the Southern African Catholic Bishops' Conference reported. t h iv.January i27, in its scathing indictment of sanctions those responsible for policy in the government and in government supporting roles, have effectively shielded themselves against the impact of deprivation. They will be the last to feel its effects."1 6 3) shift in Political Dynamics. What even Botha could not predict was the percent o P the Afrikaner vote. It replaced the Progressive-Federal Party as the ercent of the exports, they now receive a lower price for the product. Black 5) Marginal Impact on W hites. White South Africans, especially the 6) Economy Stimulated For the most part, sanctions have not damaged the South African economy. South African wholesalers have found new markets for their goods, working in some cases through third countries.17 F u rther, the South African economy has acted to counter loss of certain imports by creating new firms to provide those products. In a sense, to the extent sanctions have affected South Africa, they have forced South Africa into an import-substitution mode, c ausing a stimulus to the economy 14. Conversation with Dr. Sampie Terreblanche, Washington, D.C., May 21, 1987 15. See Vivienne Walt Sanctions Ensnare Fishing Village Newsday, February 22, 1987 16. See "Re rt to Bishops: Sanctions Counterproductive nte Wa ll Sbvet Joumnal, February 11, 19

87. What is all tr e more interesting about this report is that it was commissioned last May, when the Southern African Catholic Bishops' Conference recommended the imposition of sanctions by the West. As a result of the r eport, the Conference has changed its stance 17. This was the case with sanctions against Rhodesia. The Smith government found a ready buyer in the Soviet Union for its chromium: Moscow then sold the chromium to the West at inflated prices.

Rhodesia sold its chromium, and Moscow pocketed the difference. -9 Nor has disinvestment hurt apartheid. U.S. and other Western corporations leaving South Africa in most cases have sold their assets to South African businessmen. This has resulted in a transfer of asset s from the West to South Africa, at firesale prices, enriching South Africa in the process. In the best example, the giant Anglo-American Co. of South Africa was able to buy out South Africa's largest b Barclays National by -paying $8.06 .per share for sto c k trading previously at Africa's two-tiered exchange system, and Pretoria will save roughly $14 million in foreign dividend payments per year Barclays will receive only half that amount because of South 7) Private Sector Anti-Apartheid mom WeakemA Disinve s tment by Western corporations and the transfer of their assets to South African businessmen allows the new firms to bid on South African government contracts, without being bound to pay for costl social responsibility programs, such those called for in th e Sullivan Principles9 Example: the new South African owners of General Motors' old plant in Port Elizabeth will be able to produce trucks for the South African Defense Forces. So doing, it will get back into a lucrative market long denied the company when it was owned by the U.S.-based parent firm. And General Motors Chairman Roger Smith, in announcing the decision to withdraw from South Africa, admitted that the new owners would have "greater o portunities workforce is likely to have its benefits and wage s slashed.% The newly-purchased companies, moreover, will not feel restrained from reducing their contributions to black education, housing, and medical programs for reductions in labor and benefit costs In other words the South Ai! rican GM 8) Government Backtrack

Since the election, Pretoria has cracked down on violations of the Group Areas Act, which legally divides South Africa into White Black, and Colored living areas. Over the past several years, South African authorities discreetly had declined to enforce the act, in what was widely viewed as a precursor to scrapping it altogether This has been Pretoria's standard technique for eliminating apartheid regulations But since the election, Pretoria has informed hundreds of blacks and coloreds that they m ust move from white areas within three months or face eviction. Knowing of the blacks' predicament, white realtors are taking advantage of the situation, buying up their homes at below-market prices CONCLUSION Much public policy debate is carried on in an atmosphere devoid of solid fact kguments are made and predictions offered, action is taken, and then attention 18. See Peter Brimelow, "Why South Africa Shrugs at Sanctions Fork, March 9, 1987, pp. 99-104 19. The Sullivan Principles, named after the Rev. L eon Sullivan of the General Motors Board of Directors, set the standard for corporate conduct in South Africa by US. fms. They call for non discriminatory hiring and promoting practices, equal wages for equal work, and other measures designed to help elim m ate apartheid 20. See William Raspberry, "Quitting South Africa: If That's the Answer, What's the Question? The Washington Post, October 22, 1986, p. A25 10 shifts to something else. Rarely are policymakers given a chance to see very quickly the consequen c es of the policy decisions they have made. Only occasionally is there a chance to study the results of certain olicies and learn from them. This is the case with the South Africa sanctions and 6 sinvestment debate Bottom Line. The .bottom line is simple: W estern sanctions against Pretoria have done nothing to bring Pretoria closer to eradicating apartheid. In fact Pretoria is farther away. The promising liberalizing trends throughout the key institutions of Afrikanerdom--the church, the intelligentsia, the Broederbond, the government--have been set back. The object of U.S. and Western policy should not be sanctions but an effort to convince the Afrikaners that they stand to gain more from abolishing apartheid and rejoining the community of nabons than they d o by going back into their defensive laager To be effective, U.S. policy must take this basic reality into account. The goal of U.S. policy, as stated by both the Reagan Administration and the Congress through the Comprehensive Anti-Apartheid Act), is to f oster an atmosphere in South Africa conducive to negotiations, between Pretoria and legitimate re resentatives of the black majority. As long as the U.S. appeared to side with Akkaners against the blacks, it had no credibility in opposibon circles as an h o nest broker. But by reversing itself with the imposition of sanctions and high-level diplomatic contacts with the African National Congress, the U.S. has destroyed its credibility with the Afrikaners without gaining any credibility in the eyes of the blac ks. Instead, the U.S. must play a carefully structured role, walking a fine line between the two. The Administration should be seen by all sides: in* South itAfrica not to favor any one group over another, but to favor negotiations with all.

Pretoria, understandably, has read the mood of the Congress-which it now correctly deems to be controlling U.S. policy toward southern Africa--as harsh.

Pretoria has reacted by backtracking on the reform process. In addition to the crackdown on the Group Areas Act, P.W . Botha has announced his intention to terminate external funding for extraparliamentary opposition .groups. The practical effect of the second measure will be to eliminate Western assistance to government opponents. The U.S. strongly should urge Pretoria to renounce such moves and resume its reform process Further Sanctions Toward this end, the U.S. must reestablish its sanctions against South Africa and must make sure that the South African government knows it is doing so. Ronald Reagan should take the e vidence of the consequences of sanctions and use it to educate the Congress when it pressures him later this summer. He was right to oppose sanctions last year, and now he has the evidence to back up his position.

The Rea an Administration must learn the l esson of sanctions against Pretoria better than sticks. The next time sanctions lepslation is discussed, a clear line. must be drawn between those who are sincerely trylng to achieve positive change in South Africa--those who have studied the situation we l l enough to have learned the lessons of sanctions--and those who are merely posturing for a constituency in credibility R=Yf wi Pretoria. To do so, it must resist congressional calls for further and must teac the Congress: when dealing with Afrikaners, ca rrots work much 11 the U.S. To remain intellectually honest, those who are sincerely interested in fostering positive change in South Africa must drop the sanctions arrow born their quiver William Pascoe I Policy. Analyst I

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