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The balance of power and the transition to democracy in South Africa

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Van Wyk, Barry (2005). The balance of power and the transition to democracy in South Africa. MA (History) dissertation, Department of Historical and Heritage Studies, Faculty of Humanities, University of Pretoria. University of Pretoria.
Type thesis
Scope Economics and economic history of apartheid
Method synthesis review
Period studied 1948–1996
Regions South Africa, Southern Africa (Angola, Mozambique, Namibia), Homelands
Themes politics ideology elections, business and state, macro fiscal finance debt, sanctions divestment, transition post apartheid, resistance social movements, manufacturing industrial policy, labour markets wages, unions strikes, comparative theory
Citation key vanwyk2005

Argument

Van Wyk argues that apartheid was primarily a political Afrikaner-nationalist project, not an economic programme. He calls this the 'political balance of power', in which political aims overrode economic realities. The 1950s-60s boom masked structural flaws: dependence on gold and imports, skills shortages, rising fiscal costs. From the mid-1970s recession, sanctions and debt, an 'economic balance of power' gradually displaced the political one. The transition was the outcome of that shift: De Klerk gave up White political hegemony, the ANC gave up nationalisation and interventionism, and a neo-liberal settlement followed. Internal unrest and external pressure mattered chiefly through their damage to the economy. The thesis is a narrative synthesis of secondary literature, memoirs, SAIRR surveys and press, framed by an explicit theoretical construct.

Evidence and method

Almost entirely secondary: O'Meara, Giliomee, Marais, Sisk, Sparks, Alden, Stadler, Habib and Padayachee. Also memoirs (Mandela, De Klerk, Slabbert, Wessels, Van der Merwe), SAIRR Race Relations Surveys, Leadership SA and RSA Policy Review, ANC and government documents, newspaper articles, opinion surveys (HSRC CCA, Schlemmer, Lombard thesis), and SARB balance-of-payments data.

Place in the debates

Findings

  • State intervention gave Afrikaners a strong economic foothold; Afrikaner control of private industry rose sharply 1948-75. (p. 27)

    Afrikaner control of private industry leapt from 6 per cent in 1948 to a full 21 per cent in 1975.

  • Black unemployment rose through the 1960s as capital-intensive mechanisation displaced unskilled workers, while skilled shortages persisted. (p. 40)

    Thus the number of unemployed Blacks rose from 582 000 in 1962 to one million in 1970.

  • Structural dependence on mineral exports and imported capital goods made growth vulnerable. (p. 38)

    Mineral exports alone had consistently generated between 70 and 85 per cent of South Africa's export earnings, with manufacturing accounting for a diminutive 10 per cent

  • The 1970s recession exposed the limits of import substitution and cheap labour, with negative growth and capital flight after Soweto. (p. 54)

    the real growth rate of the South African economy was negative in the first half of 1976, nil in 1977 and negative again in 1978.

  • Business turned from tentative reform pressure to open alienation from the state in the 1970s-80s. (p. 55)

    In a joint initiative of Harry Oppenheimer of the Anglo American Corporation and Anton Rupert of the Rembrandt group, most of South Africa's foremost companies contributed in 1977 to form the Urban Foundation (UF).

  • By the mid-1980s foreign debt had surged, and capital flight and sanctions forced a debt standstill and exchange controls. (p. 92)

    total foreign debt rocketed from $16,9 billion at the end of 1980 to $24,3 billion at the end of 1984.

  • Growth fell steadily across decades, while gold's share of world production plunged and the state had to freeze debt repayments. (p. 91)

    real annual growth receded from an average of 5.8 per cent in the 1960s to 3,3 per cent in the 1970s and a mere 1,8 per cent between 1980 and 1987.

  • Banks' withdrawals after the Rubicon speech forced a debt moratorium and reimposition of exchange controls. (p. 94)

    In response, South Africa was forced to postpone debt repayments and reinstitute exchange controls. By 1987 250 foreign companies had withdrawn from South Africa.

  • The conclusion subordinates internal and external pressures to their economic effect. (p. 171)

    all these factors were not necessarily decisive in their own right, but rather in their individual and cumulative impact on the South African economy

  • After 1990, business, the NP and international financial institutions pressed neo-liberalism on the ANC, which had little prepared economic policy. (p. 149)

    the major South African business conglomerates launched an unremitting public and private crusade between 1990 and 1994 to convince the ANC of the inexorable superiority of neo-liberal economic policies.

  • The ANC conceded IMF conditions in 1993, and GEAR (1996) consolidated the market-led settlement. (p. 162)

    In November 1993 the ANC also concluded a secret $850 million loan agreement with the IMF

  • The apartheid economy had reached its limits by the late 1970s, making apartheid untenable. (p. 54)

    the incoherence between the political maintenance of White domination and the economic growth and profitability of the South African economy was gradually making the maintenance of apartheid entirely untenable.

Evidence ledger

Sources used

Source Kind Period How used
South African Institute of Race Relations, Survey of Race Relations in South Africa / Race Relations Survey (1976-1989/90 volumes) official statistical series 1976-1990 Supplies dated facts on Soweto 1976, banning orders, state of emergency, constitutional reform, ANC and government events, and the 1990 political chronology.
South Africa's balance of payments 1946-2000, Supplement to the South African Reserve Bank Quarterly Bulletin, June 2001 national accounts macro 1946-2000 Cited for the post-Sharpeville balance-of-payments crisis and foreign capital dependence in the 1950s-60s.
S Jones, Real growth in the South African economy since 1961, South African Journal of Economic History 5(2), 1990 secondary literature compilation 1961-1990 Source for the real GDP growth pattern in the 1960s used to show an apartheid-era boom.
C McCarthy, Stagnation in the South African economy (Stellenbosch Economic Project, Occasional Paper 1, 1991) and 'The 1980s – a lost decade for the South African manufacturing sector?' secondary literature compilation 1960s-1980s Supports claims about structural weakness, manufacturing import dependence and negative manufacturing growth 1980-85.
TC Moll, 'Probably the best laager in the world': the record and prospects of the South African economy (in Brewer ed., Can South Africa survive?) secondary literature compilation 1950s-1980s Underpins the account of gold dependence, manufacturing growth, unemployment and fiscal costs of apartheid.
D O'Meara, Forty Lost Years (1996) secondary literature compilation 1948-1994 Source of the figures on Afrikaner economic advance, state corporation investment shares, unemployment, and the 1970s recession.
H Adam and H Giliomee, The Rise and Crisis of Afrikaner Power (1979), and Giliomee, The Afrikaners (2003) secondary literature compilation 1930s-1990 Source for Afrikaner income shares, civil-service growth, agricultural and labour policy data used in Part 1.
H Marais, South Africa: Limits to Change (2001) secondary literature compilation 1948-1996 Source for economic indicators in the early 1990s and for ANC economic policy evolution.
Commission reports: Wiehahn (1979), Riekert (1979), Theron (1973-76), President's Council, and 1969 security commission commission or official report 1969-1982 Described as the basis of Botha-era labour, urban and constitutional reforms, but known only via secondary summaries.
Defence White Papers (1975, 1977) commission or official report 1975-1977 Used to establish adoption of the 'total national strategy' doctrine.
Republic of South Africa Constitution Act 110 of 1983; Interim Constitution Act 200 of 1993; Mixed Marriages Act and Immorality Act repeals (1985) legislation gazette 1983-1994 Anchors the account of tricameral reform and the transitional constitution.
ANC documents: 1987 Statement on negotiations, Discussion paper on negotiations (16 June 1989), Constitutional Guidelines (1988), Discussion Document on Economic Policy (1990), MERG, 1992 Policy Guidelines, RDP union or movement records 1986-1994 Establishes the ANC's shift toward negotiation and neo-liberal economic policy.
Negotiation agreements and declarations (Harare Declaration 1989, Dakar Declaration 1987, Groote Schuur Minute, Pretoria Minute, National Peace Accord, Record of Understanding) legislation gazette 1987-1993 Documents the stages of the negotiation process; taken from the Hough and du Plessis documents compilation.
Autobiographies and memoirs (Mandela, Long Walk to Freedom; F W de Klerk, The Last Trek; Slabbert, The Last White Parliament; Wessels; A van Wyk; HW van der Merwe; Gregory) secondary literature compilation 1948-1994 Principal narrative evidence for elite motivation and the secret talks leading to negotiations.
A Sparks, Tomorrow Is Another Country (1995), J Rantete (1998), TD Sisk (1995), H Ebrahim (1998) secondary literature compilation 1985-1994 Underlies the narrative chronology of the back-channel talks and the CODESA/MPNP negotiations.
Leadership SA magazine interviews and articles (1982-1994) and RSA Policy Review interviews newspapers periodicals 1982-1994 Source for statements by Botha, De Klerk, Viljoen, Relly, Mbeki and other leaders on reform and economics.
Newspapers: Sunday Times (Cameron-Dow compilation), Rand Daily Mail, Die Burger, Citizen, Pretoria News newspapers periodicals 1960-2004 Used for editorial and journalistic quotation, mostly via the compilation 'The Miracle of a Freed Nation'.
Opinion surveys: Schlemmer township survey (1991, n=905), HSRC Centre for Conflict Analysis surveys, white voter surveys (n=1312), Lombard elite questionnaire (n=948) household or labour survey microdata 1985-1991 Shows black and white (and elite) support for the ANC and for negotiations, supporting the claim that the economic balance of power had popular acceptance.
Cabinet records and Chamber/business association statements (1960 joint statement; Assocom, FCI, TCI, AHI, Urban Foundation, 1985 Kennedy memorandum) employer association records 1960-1991 Evidences the shift of business toward demanding reform, via Pretorius, Mann and O'Meara.

Inference

Quantification: Illustrative figures.

Narrative-interpretive history built on a self-described 'balance of power' framework. Claims rest on chronological reconstruction from secondary works, memoirs and press quotation, with scattered macroeconomic figures cited from secondary sources. No original archival work or systematic data analysis, and no tests of alternative explanations.

Key claims

Claim Basis Strength
Apartheid was introduced primarily as a political programme to uplift Afrikaners, and Afrikaner economic advance from 1948 to the 1960s was state-driven. (p. 23) Figures on Afrikaner income share, employment, state corporation shares and Afrikaner private industry control taken from O'Meara, Adam and Giliomee and Giliomee, with leader quotations. Partial data
The apartheid economy suffered structural weaknesses (gold and import dependence, skills shortage, rising fiscal costs) that produced stagnation from the mid-1970s. (p. 38) Secondary compilations (Moll, McCarthy, Jones, SARB balance of payments) and O'Meara, with growth, debt, unemployment and gold-share statistics quoted from them. Partial data
Business increasingly broke with the state from 1960 and especially after 1976 to demand reform, aligning with the economic balance of power. (p. 55) Business association statements, Urban Foundation, Carlton and Good Hope conferences, Relly interview and Ackerman article, via Pretorius, Mann and Leadership SA. Illustrative or anecdotal
The economic crisis of the 1980s (disinvestment, debt, sanctions, falling growth) undermined the Botha government's strategy and pushed the elite toward settlement. (p. 91) Quoted figures on foreign debt, disinvestment and growth taken from secondary works (Gool, Hirsch, O'Meara, Mann), with press and speech quotation. Partial data
The ANC shifted toward negotiations in the late 1980s, partly because of military failure and international pressure, through secret contacts with the government and business. (p. 114) ANC documents, memoirs of Mandela, Coetzee and Bizos, and Sparks, Rantete and McKinley. Illustrative or anecdotal
After 1990 the ANC converged on neo-liberal economic policy through NP, business and international financial pressure, completing the 'economic balance of power'. (p. 162) ANC policy documents (DDEP, MERG, RDP), the IMF loan, the NEM and GEAR as described in Habib and Padayachee, Marais, Webster and Adler and Murray. Partial data
White public and elite opinion was ready to accept negotiations and majority participation, so De Klerk acted in accordance with majority white attitudes. (p. 138) HSRC/CCA surveys, Schlemmer et al. (1991), Lombard thesis, and the 1989 election and 1992 referendum results. Partial data
The economic decline was the decisive cause of the transition, with political pressure, violence and sanctions operating mainly through their effect on the economy. (p. 168) Asserted through the author's theoretical framework, with no causal test of the economy's weight relative to other factors. Asserted

The author's caveats

The author states that the study is a theoretical, narrative account, does not aim to be exhaustive, and involves reductionism and generalisation; he concedes that political and other factors also mattered and that the historian's explanation 'is always dependent thus on a certain amount of speculation'. He says primary and secondary sources were subjected to critical analysis, but offers no discussion of data quality.

Gaps in the evidence

The central causal claim, that the economic decline drove elite capitulation, would need systematic economic series (GDP, capital flows, debt, sectoral output, skills shortages) tied to dated policy decisions, which exist in SARB and Central Statistical Service publications. It would also need primary evidence from Cabinet, NP caucus, Chamber of Mines and Anglo American archives, and oral histories of decision-makers, to test whether economic motives or security and political pressures dominated. Comparative or counterfactual analysis of competing explanations (sanctions, mass mobilisation, the end of the Cold War) is absent; these data and many archives were available or are now accessible.

Replicability: Data poorly documented.