The paradox of S. Africa's reaction to continuing unrest

The South African government appears to be at odds with itself. The government has taken extraordinary measures to protect the value of its currency. But yesterday it continued to deal with black unrest with strong-arm tactics. This approach, as long as it excludes political negotiations with or concessions to blacks, is apt to increase the kind of pressures that led to the decline of the rand in the first place, analysts say.

Beginning Wednesday, trading on the South African stock exchange and foreign exchange markets was suspended through Sept. 2. The move was meant to stop an outflow of capital from the country.

The government's tough methods to deal with unrest were evident Wednesday as:

Police were deployed in large numbers to squelch a planned mass protest march. Small bands of protesters were dispersed by police who wielded whips and fired teargas.

Pretoria banned the Congress of South African Students, a prominent black student movement that has been lobbying for educational reforms since early 1984.

Police arrested the Rev. Abel Hendricks, a former head of the South African Methodist Church, when he tried to dissuade police from using force against the protesters. Since last weekend, the government has rounded up a number of key anti-apartheid activists, including prominent clergyman Allan Boesak.

Also on Wednesday, South Africa's black National Union of Mineworkers decided to go on strike Sunday, which will only add to the country's economic woes. Before the government suspended currency trading, the South African rand had fallen to an all-time low of 34.8 cents (US). The rand and the dollar were at parity in early 1982.

The recent detentions and the banning of the Congress of South African Students (COSAS) are precisely the kind of actions that generated foreign pressure for the government to reform apartheid, sources here say.

Both in and outside of South Africa there were hopes that President Pieter W. Botha would announce a major changes in the country's racial policy in a speech on Aug. 15. Instead he was widely perceived to have taken a tough line, signaling to many that Pretoria has no intentions of dealing with the current unrest through political concessions.

The rand began to fall after the speech and has continued to fall as outside pressure for sanctions mounts and pretoria continues to take no political actions to defuse unrest. The rand has fallen by 35 percent in the 13 days between his speech and the closure of the foreign exchange market.

In outlawing COSAS, the government reverted to an earlier technique of countering opposition. Although the government has detained individuals, it has in the past five or six years refrained from banning organizations.

Revival of the practice of outlawing black opposition movements is likely to strengthen the hand of those calling for sanctions against South Africa.

The detention of the Rev. Boesak was condemned by several Western countries, including the United States. Ironically, the detention came only a few hours before Minister of Finance Barend du Plessis announced the closure of the stock and foreign exchange markets.

Boesak's arrest was a bid to forestall the proposed march on Pollsmoor Prison near Cape Town. The marchers intended to deliver a message of solidarity to black nationalist leader Nelson Mandela, who has served 23 years of a life sentence. Police sealed off the stadium where marchers were to assemble yesterday.

This move prevented the march, which Boesak claimed would draw 25,000 participants. However, there were brief attempts by small bands of protesters to march both from the original starting point and from the University of Cape Town.

A major underlying cause of South Africa's financial crisis is its huge foreign debt, which was put at $17.6 billion in June by the governor of the Reserve Bank, Gerhard de Kock. But the immediate cause has been the decision by foreign banks, led by US banks, to call in loans. That decision, as observers have made clear, is prompted largely by political considerations. The situation is exacerbated by the high proportion of short-term debts, estimated to be about well over half of the total foreign debt .

Mr. du Plessis acknowledged the role of political pressure when he attributed the ``abnormal pressure'' on South Africa to repay its foreign debts to ``reasons unrelated to the healthy underlying conditions in the country.''

Dr. de Kock was more explicit when he spoke on Tuesday about ``abnormal socio-political conditions,'' adding, ``clearly these political developments have tended to neutralize the sound economic fundamentals and have adversedly affected overseas perceptions of the domestic economic situation.''

Even more forthright was Gavin Relly, the chairman of the giant Anglo-American mining corporation, who said, ``We find ourselves, internally and externally, under unprecedented political pressures which take a heavy toll of the economy.''

Anglo-American is one of two companies -- the second is Barclays Bank -- planning talks in Zambia with the outlawed African National Congress, which seeks the overthrow of the Pretoria regime.

The businessmen hope to lay the ground for talks between the South African government and the ANC. Many observers believe such talks are indispensable to any long-term resolution of South Africa's problems.