GDP per capita development of South Africa

Prior to the arrival of the European settlers in the 17th century the economy of what was to become South Africa was dominated by subsistence agriculture and hunting. In the north, central and east of the country tribes of

Bantu peoples The Bantu peoples, or Bantu, are an ethnolinguistic grouping of approximately 400 distinct ethnic groups who speak Bantu languages. They are native to 24 countries spread over a vast area from Central Africa to Southeast Africa and into Souther ...

occupied land on a communal basis under tribal

chiefdoms A chiefdom is a form of hierarchical political organization in non-industrial societies usually based on kinship, and in which formal leadership is monopolized by the legitimate senior members of select families or 'houses'. These elites form a ...

. It was an overwhelmingly pastoral economy and wealth was measured in the number of cattle men held. Population growth had created a land pressure that had seen the tribes move steadily from the origins in central east Africa. In the southern and western parts of the country, San ( Bushmen) peoples led nomadic lives based on hunting and the

Khoikhoi Khoekhoen (singular Khoekhoe) (or Khoikhoi in the former orthography; formerly also '' Hottentots''"Hottentot, n. and adj." ''OED Online'', Oxford University Press, March 2018, www.oed.com/view/Entry/88829. Accessed 13 May 2018. Citing G. S. ...

(Hottentots) peoples led a pastoral existence. In the first half of the 20th century,

agriculture Agriculture or farming is the practice of cultivating plants and livestock. Agriculture was the key development in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that enabled people t ...

and

mining Mining is the extraction of valuable minerals or other geological materials from the Earth, usually from an ore body, lode, vein, seam, reef, or placer deposit. The exploitation of these deposits for raw material is based on the economic ...

were the largest parts of the South African economy.

Early history

The first evidence of

pottery Pottery is the process and the products of forming vessels and other objects with clay and other ceramic materials, which are fired at high temperatures to give them a hard and durable form. Major types include earthenware, stoneware and ...

and

(

sheep Sheep or domestic sheep (''Ovis aries'') are domesticated, ruminant mammals typically kept as livestock. Although the term ''sheep'' can apply to other species in the genus '' Ovis'', in everyday usage it almost always refers to domesticated ...

) in South Africa can be found in the period of 350-150

BCE Common Era (CE) and Before the Common Era (BCE) are year notations for the Gregorian calendar (and its predecessor, the Julian calendar), the world's most widely used calendar era. Common Era and Before the Common Era are alternatives to the or ...

, while

metal A metal (from Greek μέταλλον ''métallon'', "mine, quarry, metal") is a material that, when freshly prepared, polished, or fractured, shows a lustrous appearance, and conducts electricity and heat relatively well. Metals are typicall ...

s date back to the 52-252 CE period. The earliest occurrence of

cattle Cattle (''Bos taurus'') are large, domesticated, cloven-hooved, herbivores. They are a prominent modern member of the subfamily Bovinae and the most widespread species of the genus ''Bos''. Adult females are referred to as cows and adult ma ...

farming was in the 5th century CE and the Iron Age reached modern-day

Kwa-Zulu Natal KwaZulu-Natal (, also referred to as KZN and known as "the garden province") is a province of South Africa that was created in 1994 when the Zulu bantustan of KwaZulu ("Place of the Zulu" in Zulu) and Natal Province were merged. It is locate ...

around 700 CE. The

Kingdom of Mapungubwe The Kingdom of Mapungubwe (or Maphungubgwe) (c. 1075–c. 1220) was a medieval state in South Africa located at the confluence of the Shashe and Limpopo rivers, south of Great Zimbabwe. The name is derived from either TjiKalanga and Tshivenda ...

(c.11th – 13th century CE) was a medieval state in South Africa located at the confluence of the Shashe and

Limpopo Limpopo is the northernmost province of South Africa. It is named after the Limpopo River, which forms the province's western and northern borders. The capital and largest city in the province is Polokwane, while the provincial legislature is ...

rivers. This saw the beginnings of South Africa's

gold Gold is a chemical element with the symbol Au (from la, aurum) and atomic number 79. This makes it one of the higher atomic number elements that occur naturally. It is a bright, slightly orange-yellow, dense, soft, malleable, and ductile me ...

and ivory trade and the production of jewelry and art. The Golden Rhinoceros of Mapungubwe was discovered on a royal grave at the site of Mapungubwe Hill, and was on display at the British Museum as part of an exhibition celebrating the art of South Africa. Mapungubwe also saw the first development of stonemasonry in what is now South Africa. Glass beads and

Chinese ceramics Chinese ceramics show a continuous development since Chinese Neolithic, pre-dynastic times and are one of the most significant forms of Chinese art and ceramics globally. The first pottery was made during the List of Palaeolithic sites in China, ...

were imported.

European settlement

In 1652 a permanent European settlement was established in

Cape Town Cape Town ( af, Kaapstad; , xh, iKapa) is one of South Africa's three capital cities, serving as the seat of the Parliament of South Africa. It is the legislative capital of the country, the oldest city in the country, and the second largest ...

in the far south west of the country. It was not originally planned as a

colony In modern parlance, a colony is a territory subject to a form of foreign rule. Though dominated by the foreign colonizers, colonies remain separate from the administration of the original country of the colonizers, the '' metropolitan state' ...

but as a refreshment station.

Malnutrition Malnutrition occurs when an organism gets too few or too many nutrients, resulting in health problems. Specifically, it is "a deficiency, excess, or imbalance of energy, protein and other nutrients" which adversely affects the body's tissues ...

, especially

scurvy Scurvy is a disease resulting from a lack of vitamin C (ascorbic acid). Early symptoms of deficiency include weakness, feeling tired and sore arms and legs. Without treatment, decreased red blood cells, gum disease, changes to hair, and bleeding ...

, a

vitamin C Vitamin C (also known as ascorbic acid and ascorbate) is a water-soluble vitamin found in citrus and other fruits and vegetables, also sold as a dietary supplement and as a topical 'serum' ingredient to treat melasma (dark pigment spots) ...

deficiency arising from a lack of fresh

fruit In botany, a fruit is the seed-bearing structure in flowering plants that is formed from the ovary after flowering. Fruits are the means by which flowering plants (also known as angiosperms) disseminate their seeds. Edible fruits in particu ...

and

vegetables Vegetables are parts of plants that are consumed by humans or other animals as food. The original meaning is still commonly used and is applied to plants collectively to refer to all edible plant matter, including the flowers, fruits, stems ...

, was a problem for the ships of the

Dutch East India Company The United East India Company ( nl, Verenigde Oostindische Compagnie, the VOC) was a chartered company established on the 20th March 1602 by the States General of the Netherlands amalgamating existing companies into the first joint-stock ...

that were plying trade between the

Netherlands ) , anthem = ( en, "William of Nassau") , image_map = , map_caption = , subdivision_type = Sovereign state , subdivision_name = Kingdom of the Netherlands , established_title = Before independence , established_date = Spanish Netherl ...

and the Dutch East Indies, modern

Indonesia Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania between the Indian and Pacific oceans. It consists of over 17,000 islands, including Sumatra, Java, Sulawesi, and parts of Borneo and New Guine ...

. To deal with the problems, the company established a garden at the foot of

Table Mountain Table Mountain ( naq, Huriǂoaxa, lit= sea-emerging; af, Tafelberg) is a flat-topped mountain forming a prominent landmark overlooking the city of Cape Town in South Africa. It is a significant tourist attraction, with many visitors using the ...

and bartered cattle from the

to supply to passing ships. However, the inevitable development of a permanent European settlement at the Cape triggered profound change over the next two and a half centuries. A struggle developed between the Europeans and the San, who were pushed into the

Kalahari Desert The Kalahari Desert is a large semi-arid sandy savanna in Southern Africa extending for , covering much of Botswana, and parts of Namibia and South Africa. It is not to be confused with the Angolan, Namibian, and South African Namib coastal d ...

region. Protracted skirmishes and wars with the Khoikhoi (Quena) clans and tribes resulted in enslavement of many and the destruction of a cohesive Khoikhoi communal identity, which disappeared. Land hunger led to wars between the

Bantu Bantu may refer to: *Bantu languages, constitute the largest sub-branch of the Niger–Congo languages *Bantu peoples, over 400 peoples of Africa speaking a Bantu language * Bantu knots, a type of African hairstyle *Black Association for National ...

as the settlers migrated eastwards from the original settlement in Cape Town . Between the wars , commerce developed between the settlers and the

indigenous peoples Indigenous peoples are culturally distinct ethnic groups whose members are directly descended from the earliest known inhabitants of a particular geographic region and, to some extent, maintain the language and culture of those original people ...

. Sales of produce and stock saw the development of a black, landed peasantry. .

Immigrant skills

The Europeans meanwhile imported slaves from Malaya as artisans. Their skills have contributed to the clothing being a major industry in the Cape today. There were other waves of migration from Europe. Persecuted

Huguenots The Huguenots ( , also , ) were a religious group of French Protestants who held to the Reformed, or Calvinist, tradition of Protestantism. The term, which may be derived from the name of a Swiss political leader, the Genevan burgomaster Be ...

from

France France (), officially the French Republic ( ), is a country primarily located in Western Europe. It also comprises of overseas regions and territories in the Americas and the Atlantic, Pacific and Indian Oceans. Its metropolitan area ...

turned their hands to

wine production Winemaking or vinification is the production of wine, starting with the selection of the fruit, its fermentation into alcohol, and the bottling of the finished liquid. The history of wine-making stretches over millennia. The science of wine and w ...

and Germans and British grew the nascent industrial base and developed modern farming methods. Contrary to popular belief, slaves did not heavily work the farms of the Cape, as that was done contractually by the Khoi, but mostly by the Dutch settlers. Slaves were also imported to the South African region for work on the large scale wine plantations founded by European settlers. Altogether these ambitious efforts increased living standards of the white population substantially. The province of

Natal NATAL or Natal may refer to: Places * Natal, Rio Grande do Norte, a city in Brazil * Natal, South Africa (disambiguation), a region in South Africa ** Natalia Republic, a former country (1839–1843) ** Colony of Natal, a former British colony ( ...

, a British colony, was found suitable for sugar production but the local Zulu tribes could not be attracted as cane cutters as they lacked the skill and competency to work. Indentured labour was brought from India. The descendants of these labourers play an active role in commerce and industry today. Additional to slavery, there was another form of coerced labor supply: The Zulu and other kingdoms used young men for coerced labor both as warriors and pastorals. The European migrants diverged: the Continental Europeans merged to speak a Dutch-derived language,

Afrikaans Afrikaans (, ) is a West Germanic language that evolved in the Dutch Cape Colony from the Dutch vernacular of Holland proper (i.e., the Hollandic dialect) used by Dutch, French, and German settlers and their enslaved people. Afrikaans gra ...

, and the settlers from the

British Isles The British Isles are a group of islands in the North Atlantic Ocean off the north-western coast of continental Europe, consisting of the islands of Great Britain, Ireland, the Isle of Man, the Inner and Outer Hebrides, the Northern Isles, ...

continued to speak

English English usually refers to: * English language * English people English may also refer to: Peoples, culture, and language * ''English'', an adjective for something of, from, or related to England ** English national ide ...

which became the language of commerce. This dichotomy was also seen in the economy, as farmers were mainly Afrikaans-speaking while English-speaking South Africans were drawn to commerce and industry.

Boer republics

The Afrikaners formed two independent inland republics, the Zuid Afrikaanse Republiek (ZAR) and the Oranje Vrystaat (Orange Free State). On the coast the British occupied the Cape Colony and Natal. The discovery of

diamonds Diamond is a solid form of the element carbon with its atoms arranged in a crystal structure called diamond cubic. Another solid form of carbon known as graphite is the chemically stable form of carbon at room temperature and pressure, bu ...

in the Cape Province in 1866 the discovery of gold twenty years later on the

Witwatersrand The Witwatersrand () (locally the Rand or, less commonly, the Reef) is a , north-facing scarp in South Africa. It consists of a hard, erosion-resistant quartzite metamorphic rock, over which several north-flowing rivers form waterfalls, which ...

in the ZAR transformed the economy and attracted considerable foreign interest. The subsequent diamond and

gold rush A gold rush or gold fever is a discovery of gold—sometimes accompanied by other precious metals and rare-earth minerals—that brings an onrush of miners seeking their fortune. Major gold rushes took place in the 19th century in Australia, New ...

es saw further migrations of a range of nationalities including Cornish miners and eastern European Jews amongst others. In 1899, the British went to war once again with the Boer Republics. After overcoming several initial setbacks, the British managed to take the initiative by 1900; invaded and soon conquered the Freestate and ZAR, later uniting them as two of the four provinces in the

Union of South Africa The Union of South Africa ( nl, Unie van Zuid-Afrika; af, Unie van Suid-Afrika; ) was the historical predecessor to the present-day Republic of South Africa. It came into existence on 31 May 1910 with the unification of the Cape, Natal, Tran ...

in 1910. But perhaps the greatest impact was the influx of international capital to finance the mining operations, including the arrival of

Cecil John Rhodes Cecil John Rhodes (5 July 1853 – 26 March 1902) was a British mining magnate and politician in southern Africa who served as Prime Minister of the Cape Colony from 1890 to 1896. An ardent believer in British imperialism, Rhodes and his Brit ...

who formed De Beers and

Anglo-American Anglo-Americans are people who are English-speaking inhabitants of Anglo-America. It typically refers to the nations and ethnic groups in the Americas that speak English as a native language, making up the majority of people in the world who spe ...

. During the age of African colonization, due to its large amount of gold and diamond mines, South Africa attracted the majority (55,8%) of overseas investments to the whole African continent.

Migrant labour

The indigenous people had no knowledge about the mining economy and this led to a shortage of labour on the mines. In a measure to force labour to the mines, Rhodes, who had turned from forming the De Beers Company to politics, secured the passing of the

Glen Grey Act The Glen Grey Act is an 1894 Act of the Parliament of the Cape Colony. Instigated by the government of Prime Minister Cecil John Rhodes, it established a system of individual (rather than communal) land tenure and created a labour tax to force Xho ...

in 1894. The Act obliged the payment of tax with the specific aim of forcing peasant farmers, who were not part of the money economy, to find work that paid money to pay the taxes. The Act was a deliberate move by Rhodes to force labour to the mines. This was the start of a migratory labour system in which black men travelled to the mines to work leaving their families in the tribal areas. The supply of labour became more than sufficient and the mining companies formed a buying cartel through their association, the Chamber of Mines. This enabled them to create a

monopsony In economics, a monopsony is a market structure in which a single buyer substantially controls the market as the major purchaser of goods and services offered by many would-be sellers. The microeconomic theory of monopsony assumes a single entity ...

(market conditions where there is only one buyer) that suppressed wages. The mines also attracted labour from neighbouring countries such as Rhodesia (now

Zambia Zambia (), officially the Republic of Zambia, is a landlocked country at the crossroads of Central, Southern and East Africa, although it is typically referred to as being in Southern Africa at its most central point. Its neighbours are t ...

and

Zimbabwe Zimbabwe (), officially the Republic of Zimbabwe, is a landlocked country located in Southeast Africa, between the Zambezi and Limpopo Rivers, bordered by South Africa to the south, Botswana to the south-west, Zambia to the north, and ...

Nyasaland Nyasaland () was a British protectorate located in Africa that was established in 1907 when the former British Central Africa Protectorate changed its name. Between 1953 and 1963, Nyasaland was part of the Federation of Rhodesia and Nyasala ...

(now

Malawi Malawi (; or aláwi Tumbuka: ''Malaŵi''), officially the Republic of Malawi, is a landlocked country in Southeastern Africa that was formerly known as Nyasaland. It is bordered by Zambia to the west, Tanzania to the north and northeas ...

) and

Mozambique Mozambique (), officially the Republic of Mozambique ( pt, Moçambique or , ; ny, Mozambiki; sw, Msumbiji; ts, Muzambhiki), is a country located in southeastern Africa bordered by the Indian Ocean to the east, Tanzania to the north, Malawi ...

(that was then a

Portuguese colony The Portuguese Empire ( pt, Império Português), also known as the Portuguese Overseas (''Ultramar Português'') or the Portuguese Colonial Empire (''Império Colonial Português''), was composed of the overseas colonies, factories, and the l ...

) that kept wages of black workers down.

Rand Rebellion

South African gold mines are deep and expensive to run and the mine companies endeavoured to keep costs down. However, in trying to train blacks for skilled jobs, they ran into conflict with white miners. The racist white miners resisted the integration of black miners in 1922 in the area around the centre of gold mining: the

. The dispute quickly escalated with the

South African Communist Party The South African Communist Party (SACP) is a communist party in South Africa. It was founded in 1921 as the Communist Party of South Africa (CPSA), tactically dissolved itself in 1950 in the face of being declared illegal by the governing Na ...

joining on the side of the miners while also promoting the idea of racial equality. The standoff escalated from a labour dispute to a full scale uprising labeled the Rand Rebellion. Eventually more than 20,000 fully equipped Union Defence Force troops had to be dispatched. All attempts at negotiations failed and the rebellion was eventually put down by "considerable military firepower and at the cost of over 200 lives". Some white miners were sentenced to hang for their roles in instigating and leading the uprising. Those dispatched to the gallows purportedly went quoting the rallying cry of

Karl Marx Karl Heinrich Marx (; 5 May 1818 – 14 March 1883) was a German philosopher, economist, historian, sociologist, political theorist, journalist, critic of political economy, and socialist revolutionary. His best-known titles are the 1848 ...

and

Friedrich Engels Friedrich Engels ( ,"Engels"
'' Communist Manifesto'', saying, "

Workers of the world unite The political slogan "Workers of the world, unite!" is one of the rallying cries from ''The Communist Manifesto'' (1848) by Karl Marx and Friedrich Engels (german: Proletarier aller Länder, vereinigt Euch!, literally "Proletarians of all cou ...

Poor Whites

Among the white population there were many Afrikaner

sharecroppers Sharecropping is a legal arrangement with regard to agricultural land in which a landowner allows a tenant to use the land in return for a share of the crops produced on that land. Sharecropping has a long history and there are a wide range ...

(

tenant farmers A tenant farmer is a person (farmer or farmworker) who resides on land owned by a landlord. Tenant farming is an agricultural production system in which landowners contribute their land and often a measure of operating capital and management, ...

who shared their crops with their landlord in lieu of rent). However, the onset of the Great Depression, combined with drought, led to the forced sale and consolidation of many of these farms, which itself led to the eviction of the residential sharecroppers. These subsequently unemployed whites flooded towns, competing with blacks for jobs in the mines. Special attention was paid to this new influx of white poverty (as opposed to any changes in non-whites' statuses), and the

Carnegie Corporation The Carnegie Corporation of New York is a philanthropic fund established by Andrew Carnegie in 1911 to support education programs across the United States, and later the world. Carnegie Corporation has endowed or otherwise helped to establis ...

, founded by Scots-American philanthropist

Andrew Carnegie Andrew Carnegie (, ; November 25, 1835August 11, 1919) was a Scottish-American industrialist and philanthropist. Carnegie led the expansion of the American steel industry in the late 19th century and became one of the richest Americans i ...

, conducted a study into white poverty that was published as the ''Commission on the Poor White Problem in South Africa'' in 1932. It led to the alleviation of white poverty, but to some it was also seen as the foundation for the formalised system of racial discrimination against blacks that became known as

apartheid Apartheid (, especially South African English: , ; , "aparthood") was a system of institutionalised racial segregation that existed in South Africa and South West Africa (now Namibia) from 1948 to the early 1990s. Apartheid was ...

. Blacks had no vote and the whites used their political power to force the mining companies to protect skilled jobs for whites.

Labour-Afrikaner Nationalist Unity

From the late 1920s, whites elected governments that united white labour and

Afrikaner Nationalism Afrikaner nationalism ( af, Afrikanernasionalisme) is a nationalistic political ideology which created by Afrikaners residing in Southern Africa during the Victorian era. The ideology was developed in response to the significant events in Afrik ...

that used sanctions such as denying government contracts, against businesses that did not employ people who spoke Afrikaans. Nationalised industries were established, like steel and the railways, which reserved even low skilled jobs for whites. The 1930s and 1940s saw the rapid industrialisation of the country as it supplied the mining industry and the government invested in major projects to protect white employment. South Africa not only had gold and diamonds but vast quantities of iron, coal and many other

minerals In geology and mineralogy, a mineral or mineral species is, broadly speaking, a solid chemical compound with a fairly well-defined chemical composition and a specific crystal structure that occurs naturally in pure form.John P. Rafferty, ed ...

. Agriculture diminished in importance as mining and then industry grew. While English-speaking South Africans dominated industrial and commercial life Afrikaners banded together in mutual financial organisations that in due course were to become major players in that sector of the economy.

Apartheid

In 1948, a government was elected that introduced the policy of

(segregation) that was aimed to allow different racial groups to progress in their own separate areas. In the two decades following the rise to power of the National Party, whites (particularly Afrikaners) rose above all other ethnic groups in South Africa through their dominant and tactful performance in the labour market. Throughout the 1960s, South Africa had economic dominance over the rest of Africa and was considered the only developed country in Africa by the United Nations economic criteria.

White South Africans White South Africans generally refers to South Africans The population of South Africa is about 58.8 million people of diverse origins, cultures, languages, and religions. The South African National Census of 2022 was the most recent censu ...

enjoyed standards of living comparable with or higher than the

West West or Occident is one of the four cardinal directions or points of the compass. It is the opposite direction from east and is the direction in which the Sun sets on the Earth. Etymology The word "west" is a Germanic word passed into some ...

. Throughout this period South Africa produced twice as much

electricity Electricity is the set of physical phenomena associated with the presence and motion of matter that has a property of electric charge. Electricity is related to magnetism, both being part of the phenomenon of electromagnetism, as describ ...

and six times as much steel as the rest of the African continent combined while at the same time, accounting for 43% of Africa's entire mineral production output. Economic dominance during this period was made possible by Black South Africans and migratory labour from

, Lesotho and

Portuguese Mozambique Portuguese Mozambique ( pt, Moçambique) or Portuguese East Africa (''África Oriental Portuguesa'') were the common terms by which Mozambique was designated during the period in which it was a Portuguese colony. Portuguese Mozambique originally ...

who all experienced poor working conditions and relativity low wages. Real wages for nonwhite South African miners declined between the passage of the

Mines and Works Act The Mines and Work Act was a piece of legislation in South Africa, originally passed in 1911, amended in 1912 and 1926 before undergoing further changes in 1956 and 1959. This act legally established South Africa's employment "colour bar." and wa ...

in 1911 and 1971, while nonwhite workers in the manufacturing industry earned 18 percent of the wages of white workers. The government at the time even admitted that Black labour was crucial to their economic success and hence talks of territorial and political separation along racial lines at the time was deemed a threat to economic expansion for South Africa. By the beginning of the 1980's South Africa had the highest

wealth inequality The distribution of wealth is a comparison of the wealth of various members or groups in a society. It shows one aspect of economic inequality or heterogeneity in economics, economic heterogeneity. The distribution of wealth differs from the i ...

in the world, with 40 percent of the population earning just 6 percent of the national income. Infant mortality rates for blacks and Coloureds reached 13 times the rates of whites, with one-quarter of newborns dying within a year. As noted by one historian, " Full employment, in combination with labour controls, limitations on the free movement and employment of non-whites, and the use of colour bars at company level, contributed to high levels of

disposable income Disposable income is total personal income minus current income taxes. In national accounts definitions, personal income minus personal current taxes equals disposable personal income. Subtracting personal outlays (which includes the major ...

for the white population". Many English-speaking South Africans had participated in the heavy discrimination that preceded apartheid, and tacitly supported the legislation while paying lip service to opposing the laws. By so doing apartheid managed to create a system in which black people were pushed to the margins of their land through the imposition of the

Natives Land Act, 1913 The Natives Land Act, 1913 (subsequently renamed Bantu Land Act, 1913 and Black Land Act, 1913; Act No. 27 of 1913) was an Act of the Parliament of South Africa that was aimed at regulating the acquisition of land. According to the ''Encyclopæ ...

. In result; many blacks are unskilled, illiterate, and have low living standards. Their schooling system, the Bantu languages education, was based on the notion that black people cannot progress fast enough in scientific subjects due to lower intellectual skills, and has resulted in many being excluded from work requiring skill.

Volkscapitalisme

Under the Nationalist Party, the country embarked upon a 'dirigiste' economic expansion involving the creation of several state-owned enterprises or 'parastatals' as they were called, including Iscor (steel), Sasol (synthetic fuel), Eskom (electricity), and later Transnet (rail) and Telkom (telecommunications). These grew in tandom with party-controlled entities such as Volkskas (banking), Sanlam (insurance) and Naspers (media).

Business support for apartheid

With the support of

foreign capital In economics, capital goods or capital are "those durable produced goods that are in turn used as productive inputs for further production" of goods and services. At the macroeconomic level, "the nation's capital stock includes buildings, eq ...

, the mines and the mining finance houses, largely dominated by English-speaking South Africans, prospered under the system of apartheid and shunned outright opposition. In return for the continued

of labour purchase for the mines that kept wages low and outlawed trade unions, the English-speaking mining companies tolerated job reservation that prevented blacks from developing skills. Thousands of foreign businesses from the

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the European mainland, continental mainland. It comprises England, Scotlan ...

West Germany West Germany is the colloquial term used to indicate the Federal Republic of Germany (FRG; german: Bundesrepublik Deutschland , BRD) between its formation on 23 May 1949 and the German reunification through the accession of East Germany on 3 O ...

, and the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...

opened firms in South Africa to exploit the lower wages of nonwhite workers. This is debated, however, as policies to restrict labour supply to whites only resulted in higher miner wages than under a system of equal employment. Over time the mining companies introduced changes to lower their costs but the alliance with the government continued. White

trade unionism A trade union (labor union in American English), often simply referred to as a union, is an organization of workers intent on "maintaining or improving the conditions of their employment", ch. I such as attaining better wages and benefits (su ...

was allowed but there were no black trade unions until the 1970s.

Sanctions

The imposition of international sanctions on the country began economic pressure that saw the unravelling of apartheid. There were oil sanctions but South Africa continued to be able to buy oil on international markets and developed technology that allowed the conversion of coal into oil. A small

gas field A petroleum reservoir or oil and gas reservoir is a subsurface accumulation of hydrocarbons contained in porous or fractured rock formations. Such reservoirs form when kerogen (ancient plant matter) is created in surrounding rock by the presence ...

was discovered off the coast of the

Cape A cape is a clothing accessory or a sleeveless outer garment which drapes the wearer's back, arms, and chest, and connects at the neck. History Capes were common in medieval Europe, especially when combined with a hood in the chaperon. Th ...

. But the most damaging isolation was the denial of investment funds and the boycott of South African investments particularly by influential universities and foundations in the United States. These boycotts limited the capital available to South African businesses. Ironically, during the 1980s gold reached its highest price as a result of international tensions reaping huge profits for the mining company conglomerates. However, because of currency restrictions and bans on the sales of

Krugerrand The Krugerrand (; ) is a South African coin, first minted on 3 July 1967 to help market South African gold and produced by Rand Refinery and the South African Mint. The name is a compound of ''Paul Kruger'', the former President of the South A ...

s in some countries, they were unable to invest abroad. The result was that they used their surplus funds to buy up businesses in virtually every activity in the economy. However, the financial benefit for the mining companies of continuing to support the system eroded as international capital stopped flowing into the country.

Unsustainable burden of sanctions

In 1990 State President Frederik Willem (F.W.) de Klerk recognised the economic unsustainability of the burden of international sanctions and released Nelson Mandela the nationalist leader and unbanned the

African National Congress The African National Congress (ANC) is a social-democratic political party in South Africa. A liberation movement known for its opposition to apartheid, it has governed the country since 1994, when the first post-apartheid election install ...

(ANC) that Mandela led. Despite some fears that the country could become unmanageable because of tribal conflict or even a military take over by the white-dominated armed forces de Klerk and Mandela guided the country to democratic elections in 1994 with Mandela as president. Despite socialist rhetoric and support from

socialist countries A socialist state, socialist republic, or socialist country, sometimes referred to as a workers' state or workers' republic, is a sovereign state constitutionally dedicated to the establishment of socialism. The term ''communist state'' is oft ...

in its early years the ANC maintained the

mixed economy A mixed economy is variously defined as an economic system blending elements of a market economy with elements of a planned economy, markets with state interventionism, or private enterprise with public enterprise. Common to all mixed economie ...

and encouraged the market economy including relaxing

foreign exchange controls Foreign exchange controls are various forms of controls imposed by a government on the purchase/sale of foreign currencies by residents, on the purchase/sale of local currency by nonresidents, or the transfers of any currency across national bor ...

. In January 1991, SACP general secretary

Joe Slovo Joe Slovo (born Yossel Mashel Slovo; 23 May 1926 – 6 January 1995) was a South African politician, and an opponent of the apartheid system. A Marxist-Leninist, he was a long-time leader and theorist in the South African Communist Pa ...

, DP Finance Spokesman

Harry Schwarz Harry Heinz Schwarz (13 May 1924 – 5 February 2010) was a South African lawyer, statesman and long-time political opposition leader against apartheid in South Africa, who eventually served as the South African Ambassador to the United States ...

and Deputy Finance Minister Org Marais, debated the state's role in a post-apartheid economy, in an historic debate organised by the Institute for a Democratic Alternative for South Africa.

Black empowerment

At the same time they embarked on the Reconstruction and Development Plan to improve services including

housing Housing, or more generally, living spaces, refers to the construction and assigned usage of houses or buildings individually or collectively, for the purpose of shelter. Housing ensures that members of society have a place to live, whether i ...

education Education is a purposeful activity directed at achieving certain aims, such as transmitting knowledge or fostering skills and character traits. These aims may include the development of understanding, rationality, kindness, and honesty ...

and

health Health, according to the World Health Organization, is "a state of complete physical, mental and social well-being and not merely the absence of disease and infirmity".World Health Organization. (2006)''Constitution of the World Health Organiza ...

to blacks only as a means to achieve equity. The ANC also initiated a system of "

black economic empowerment Black Economic Empowerment (BEE) is a policy of the South African government which aims to facilitate broader participation in the economy by black people. A form of affirmative action, it is intended especially to redress the inequalities creat ...

" which its aim was to establish equity to the previously disadvantaged races and the race that is currently disadvantaged through affirmative action.

Land hunger again

A major source of stress remains the redistribution of land. Under apartheid legislation beginning with the

73% of land was in so called "white areas" and many blacks had been uprooted and removed to previous tribal areas to keep crime and vandalism away from important land. The slow legal and bureaucratic process of restitution is causing impatience among blacks and concern among white farmers that South Africa may go down the route of neighbouring

where land is being unilaterally seized by the government and its supporters, causing food shortages as the new owners tend to have less farming experience.

First-world infrastructure

The needs of the mines to maintain internal security under apartheid had seen parts of South Africa develop an infrastructure that was sufficient to cater to business in the cities and as a connection between

provinces A province is almost always an administrative division within a country or state. The term derives from the ancient Roman '' provincia'', which was the major territorial and administrative unit of the Roman Empire's territorial possessions ou ...

(states). This has served the country well in the post apartheid years but is going to waste as infrastructure has not been well maintained by the ruling government. Foreign investment has flowed from South Africa around the globe: several major companies including

Old Mutual Old Mutual Limited is a pan-African investment, savings, insurance, and banking group. It is listed on the Johannesburg Stock Exchange, the Zimbabwe Stock Exchange, the Namibian Stock Exchange and the Botswana Stock Exchange. It was founded ...

and

South African Breweries South African Breweries (officially The South African Breweries Limited, informally SAB) is a major brewery headquartered in Johannesburg, South Africa and was a wholly owned subsidiary of SABMiller until its interests were sold to Anheuser-B ...

are now listed on the

London Stock Exchange London Stock Exchange (LSE) is a stock exchange in the City of London, England, United Kingdom. , the total market value of all companies trading on LSE was £3.9 trillion. Its current premises are situated in Paternoster Square close to St P ...

References

{{DEFAULTSORT:Economic History of South Africa