Unrest in South Africa begins to take serious economic toll. At issue: how long can Pretoria contain unrest if the economy falters
This week in world affairs the South African government's white-minority rule was shaken seriously, not by outside disapproval but by an outflow of capital. The nation's currency has lost roughly one-fourth of its value since a state of emergency was declared on July 21.
And this week in Washington, Secretary of Defense Caspar Weinberger was still talking about ``the growing military threat'' to the United States from the Soviet Union.
But presidential advisers and roving legislators were more worried about a US trade imbalance which reached $13.41 billion for the month of June, the second highest monthly figure on record. The trade deficit is calculated to reach $140 billion for the full year. (The worst month on record was July 1984.)
The economic factor has become immensely more important than either military or political factors in the relationships between nations.
In allied councils the main subject of concern and discussion this summer is less what the Soviets may try to do to us next, but more the terms of our trade with each other. When Congress reconvenes in Washington after Labor Day, the priority concern will be the US trade deficit with Japan which is running at the rate of $50 billion a year. One of the biggest issues between the White House and Congress will be whether to resort to protectionism.
President Reagan said ``no'' this week to pressure from New England shoe manufacturers. Can he make it stick through the next session of Congress, and can he resist labor union pressure for economic sanctions against Japan?
The US still has the advantage over the Soviets in economic terms. As a result, Moscow continues to be on the defensive the world around. True, this week reports told of a new Soviet military offensive against Afghan nationalists. Helicopters were said to be bringing the wounded into Kabul, the Afghan capital, in a manner reminiscent of America's once most popular sitcom ``M*A*S*H.'' But this is a reminder that Moscow's most spectacular recent act of aggression is still unsuccessful well into its fifth year, and that there has been no other significant Soviet advance during the intervening time.
Moscow's economic weakness, its inability to provide its clients with first-class goods and services outside the military area, has denied it an effective forward strategy. Since the Afghan nationalists failed to collapse, Moscow has been on the defensive worldwide. It is clinging as best it can to what it has, but has not in five years launched a new successful venture. It is still hobbled by unfinished old ventures, as in Afghanistan.
It is impossible to calculate what will happen next in South Africa because the economic factor began to operate only since July 21. Until then the dominant fact was the white monopoly on military and political power. The whites had the weapons and the will to use them. White supremacy could seemingly hold out indefinitely.
But the last month has brought the economic factor to the fore. There is a flight of capital. Not only have some US companies begun to pull out, but also South Africans themselves have begun exporting their capital.
White South Africa could probably contain black protest and rioting almost indefinitely, provided the economy continued to function and prosper.
But how long can the economy prosper if there is a flight of capital?
This week there were reports out of South Africa of growing white emigration. New travel agencies opened up to take care of those who think that a version of what happened in previously white-ruled Kenya and Rhodesia (now Zimbabwe) may well be in the offing for South Africa.
Time was when US politicians with higher ambitions used the summer holiday to make the ritual ``three I's tour'' -- Ireland, Italy, and Israel. This summer, US Senate majority leader Robert Dole, who has presidential ideas, did not make the ``three I's tour.'' He went to Asia -- primarily to Japan and China -- in search of export markets for the US.
Senator Dole's itinerary shows that he is sensitive to his country's biggest current problem. The national budget deficit is at an all-time high of approximately $200 billion.
The trade deficit is likely to hit $140 billion by the end of the year. The economic growth rate is down below 2 percent for the first half of the year and retail sales are sluggish.
What the US needs above all today is a revival of exports.
How does it do that and at the same time hold together the great trading community of North America, Western Europe, and Japan?
This is a task for highest statesmanship. The first step is to recognize the priority problem. The next step is to try to manage the actual trade wars among friends and allies without spoiling the friendships and alliances.
Senator Dole is at step one.