Apartheid & South Africa's Economy

South Africa's economy was robust during the Second World War because of the allies need for raw materials from South Africa. In 1948, a postwar economic contraction brought white unemployment. This sent shockwaves through the white community, particularly among white South Africans in the lowest economic strata who feared that companies would replace them with lower wage earning Black workers. This resulted in a knee jerk reaction among the all-white electorate. According to Stephen Lewis, this reaction resulted in the surprise election victory in 1948 of the National Party. The National Party espoused radical reforms intended to bolster white control over the economy and help ensure full employment for white South Africans. This National Party remained in power for more than forty years (Lewis, 13).

The National Party promised to implement apartheid, a comprehensive set of policies that would help ensure economic prosperity for whites through a policy of separate development for black and 'colored' residents of South Africa. The ruthlessness manner in which the National Party enforced apartheid is infamous. For example, the Group Areas Act passed in 1950 determined where the various races could reside. The Population Registration Act, also passed in 1950 gave the government the absolute right to determine the racial classification of its citizens. In combination with the Pass Laws, the Population Registration Act regulated internal travel. Alex Boraine writing in

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a had a disappointing economic growth rate since the mid-1970s. GDP growth was especially disappointing during the 1980s. This was due in part to the economic sanctions applied to South Africa in the mid to late l980s. According to Sebastian Mallaby writing in After Apartheid, in 1986 the United States placed an embargo on certain important South African exports. The following year, imports from South Africa fell by 40%. In 1987, the European Community applied a series of sanctions against South Africa (Mallaby, 45). In 1985, South Africa stopped receiving economic support from international banks. Many called in outstanding loans, and other simply refused to extend additional credit or renew loans to the government when they were scheduled for review and renewal. American banks withdraw $1 billion in first half of 1985. Their refusal to extend new credit, primarily on political grounds, touched off a debt crisis. British banks also refused to make new loans. By 1988, 23 states, 19 counties and 79 cities in the United States adopt economic measures against the apartheid regime. By 1985, U.S. banks had stopped providing even short-term trade credits to South Africa citing the combined economic and political risks. Mallaby

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