Pretoria hopes rise in gold price will help quell unrest

What does the price of gold have to do with South Africa's political unrest? The answer depends on which South African you ask -- white or black, official or unofficial. But this month's upswing in the price of gold, after months in the doldrums, has focused fresh attention on the question.

Gold is by far the country's top foreign- currency earner, and South African officials feel that renewed national economic growth is crucial to quelling the black political violence that has beset the country for the past two years.

South Africa is in the grips of its worst recession on record. Unemployment in some of the country's segregated black townships, residents say, is running well over 50 percent.

The official view is that the anti-government unrest is being organized by a minority that is cowing many others into at least tacit support. By arresting thousands of activists under a 12-week-old state-of-emergency clampdown, the government hopes to make such ``intimidation'' more difficult. Jobs, new housing, and investment in black areas, the presumption is, might meanwhile give more-moderate blacks a renewed stake in stability.

Black leaders dispute this reasoning. They say that the roots of the unrest run far deeper than the government says, and that the economic recession is merely an aggravating factor.

History, it would seem, favors the government's view. Previously, the worst periods of black political unrest -- in 1960 and following a student revolt in Soweto in 1976 -- occurred during times of economic trouble. They ended as the economy revived -- a process that, in 1976, was due to a sharp climb in the price of gold.

But times have changed, argued black-activist clergyman Alan Boesak recently. Gone, he says, is the era in which ``people would look on economic improvement as a reason to forgo fundamentally political demands.'' Another activist interviewed, a man who began his political life during the 1970s unrest, says: ``The issue has changed. Back then, we felt we were fighting an unjust government. Now, the issue has changed. The violence nowadays stems from a feeling that the entire system is wrong -- not merely unjust, but illegitimate.''

The South African economic climate, too, is different. Anti-apartheid pressure abroad seems to have eliminated prospects of any new major foreign loans or investments for the foreseeable future. Last year's sudden refusal by foreign banks to roll over debt payments has forced the government to earmark a large chunk of foreign-currency earnings to service loans. And pressure is building for economic sanctions against Pretoria.

Meanwhile, South African political and economic analysts say that a key factor will be just how long and how far the price of gold rises. Last week's increases have pushed the price over the $400 level, up from closer to $300 last year. The price of platinum, another precious metal of which South Africa is a leading producer, is also up. Even if the prices merely hold steady, economists estimate, this would mean an extra $2 billion in yearly earnings and could, in effect, resolve Pretoria's concern over debt payment. But the post-1976 surge rocketed the price about $800. No economist here is predicting anything on that order.

Whether an even greater price increase is in the cards, moreover, depends on a number of outside factors whose possible future impact is difficult to gauge. Among the elements in determining the gold price are the following:

The US economy. It appears that one reason for the increase in the price of gold has been a weakened dollar and market concern over the mammoth US debt.

The Soviet Union. World gold production is virtually a two-country affair, and the USSR is the other country. Increased Soviet sales could dampen any rise. And, at a time when slumping oil prices have cut into Soviet hard-currency earnings, Moscow could well take that route.

This report was filed under South Africa's emergency regulations, which prohibit reporters from being ``within sight'' of any unrest, any ``restricted gathering,'' or any ``police actions;'' from reporting on arrests made under the emergency regulations; and from relaying information deemed subversive.

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