SOUTH AFRICA: EFFECTS OF FOREIGN INVESTMENT ON GOVERNMENT POLICIES
This research paper discusses the effects on foreign investment on government policies in South Africa, historically and with special reference to the post-apartheid period (1993-present). Even since it became a part of the global economy, foreign investment, both portfolio and direct investment, has played a critical role in the development of South Africa's mineral rich economy and has impacted the nature of that nation's political and social structure. The enforced segregation and backwardness of South Africa's black and colored (mixed race) and majority population and the accompanying system of political and legal oppression (apartheid) was a logical consequence of the manner in which foreign and domestic capital was employed, but by the mid-1980s South Africa's social structure inhibited the health of the economy and hastened the end of apartheid. The new, black-African dominated government led by President Nelson Mandela after the 1994 elections was faced with unpleasant policies because of the effects of apartheid. It has thus far opted for policies which have been designed to encourage foreign investment in South Africa; however, not much new foreign investment has entered the country since 1994 and conditions have only improved marginally for the black and colored majority, leaving open the possibility that serious conflicts will arise between the interests of private foreign investment and other sectors of the economy.
Role of Foreign Investment in South Africa's Development
Developments prior to the late 19th century. The first Dutch colony was established near Capetown in 1652 as a way station to the riches further East. The white hard core minority today represents in large part, according to Waldmeir, "descendants of the original handful of Dutch, French Huguenots and German settlers who colonized this harsh and distant land in the seventeenth...