US Sanctions Get Credit For Anti-Apartheid Role

WHEN the United States first imposed economic sanctions on South Africa in 1986, it hoped the Pretoria government would be forced to abandon its policy of racial discrimination. Five years later, apartheid has been legally abolished.But were sanctions imposed by the international community the reason why? Given the number of factors that may have contributed to Pretoria's decision to strike its apartheid laws, most economists are reluctant to give an unqualified response. However, as they calculate the effect of government-imposed sanctions on jobs, output, and investment in South Africa, few doubt that they played some role, if not the main role, in hastening the end of apartheid. Meanwhile, South Africa's sudden about-face has put to rest concerns of sanctions opponents that economic pressure could prove counterproductive, actually stiffening the resistance of the Pretoria government. "I don't know if [South African President F. W.] De Klerk would have moved as quickly, if ever, without sanctions," says Robert Rotberg, president of Lafayette College and a specialist on southern Africa. He notes that the effect of sanctions was primarily psychological, not economic. "Coupled with increasing unrest, sanctions made perpetual apartheid impossible," Dr. Rotberg says. Stephen Lewis Jr., an economist who is president of Carleton College in Minnesota, says: "The economic effect of US sanctions [was] so small as to be not measurable, [but] the psychological and political effects of sanctions were of fundamental importance." The last legal pillar of apartheid was removed last week when the Pretoria government repealed a law that classified South Africans by race. South Africa has now met four of five conditions laid down when the US imposed anti-apartheid sanctions in 1986. The debate in the US now is over when and not whether to lift sanctions. Whatever scholars may say of the effectiveness of sanctions, they are still considered crucial by anti-apartheid forces, who are appealing to the international community to hang tough until negotiations are under way for a new constitution that will guarantee minority voting rights. Even opponents of extending the embargo have given sanctions a backhanded compliment, saying they are retarding the economic growth needed to provide the jobs to fully integrate blacks into South African life. The first international sanctions were imposed on South Africa following a bloody incident in March 1960, when police fired on a crowd of unarmed blacks in Sharpeville, killing 69. Since then various economic pressures have been applied to force an end to apartheid, with mixed results: * Arms embargo. In 1963 the United Nations called on members to voluntarily stop trade in arms and ammunition to South Africa. Mandatory sanctions were voted in 1977. The short-run effect was to increase prices and limit the availability of weapons. But South Africa soon picked up the slack by increasing domestic production, while several leading arms exporters - including France, Germany, and Israel - secretly circumvented the UN embargo. * Oil embargo. The Middle East oil cartel, OPEC, halted exports to South Africa in 1973. The embargo bit after the overthrow of the Shah of Iran, South Africa's main supplier. Pretoria found oil elsewhere but has been forced to pay up to $2 billion more annually to keep it coming. * Trade embargo. After Pretoria declared states of emergency in 1985 and 1986, the European Community, the US, and the Commonwealth nations all responded with measures to deprive South Africa of export markets. Some individual com- modities like coal were affected, but exports of gold and strategic minerals were not. "Because the screws were tightened slowly and only part way," notes a report issued by the Washington-based Institute for International Economics, "... the post-1985 sanctions against South Africa cost it less than 1 percent of GNP [gross national product]." Economists agree that the sanctions that hurt most were not imposed by governments but by private banks. Responding to stepped-up violence, New York's Chase Manhattan bank announced in 1985 that it would not renew short-term loans and would stop lending to South Africa. Other creditors quickly followed suit, plunging the country into a short but intense banking crisis. One South African bank estimates that between 1985 and 1990 the nation lost up to $14 billion in loans and direct investment. "Something started with the flight of international capital" after Chase Manhattan Bank got out, says Rotberg. "South Africa has been starved of capital ever since." Most economists agree that the decision of foreign banks to disinvest was not a response to the evils of apartheid, but to a cold, analytical assessment that domestic upheaval was turning South Africa into a bad credit risk. Economists also agree that South Africa's worsening economic troubles are less the result of outside economic pressure than of the generally negative effects of apartheid itself. Although exact measurements are impossible to come by, the toll taken by the two combined in terms of lost export revenue, higher import prices, and required capital investments has lowered the country's standard of living. "Reforms were inspired by domestic chaos and nervous foreign bankers," concludes one Washington economist. "In the end, the market sent a much stronger signal to the South African government about the effect of its policies than sanctions ever could have." Whatever the precise contribution of government-imposed sanctions, economic duress did influence the political behavior of South Africa's leaders, speeding the end of apartheid, economists say. "What happened to South African businessmen and government leaders starting in the late 1970s was a growing realization that, unless fundamental changes were made, South Africa was going to be at a permanent dead end economically, with larger numbers of blacks having no possibility of finding meaningful employment , and that that, eventually, was going to blow the lid off," Dr. Lewis says.