When the dust settles as US companies leave South Africa
CITICORP, ITT Corporation, and the Ford Motor Company this month joined Coca-Cola, International Business Machines Corporation, Exxon, General Motors, and many other major United States banks and corporations in the rush to leave South Africa. More will surely follow. But will the stampede produce positive results in that apartheid-dominated country? For at least a decade, Americans appalled by apartheid have sought to pressure South Africa's government to reform. Especially since the current wave of protest, repression, and violence began in September 1984, they have expected economic sanctions to compel South Africa's rulers to grant political rights to black Africans. At the very least, those who advocate some kind of sanctions have wanted the government to begin talking to the recognized leaders of black South Africans, notably Nelson Mandela of the African National Congress.
But Mr. Mandela is still in jail, and the ANC remains banned. Although the government has slowly, timidly, begun to dismantle social and economic apartheid, President Pieter Botha refuses to contemplate ending residential segregation or scrapping the law that separates all South Africans by color.
Most of all, Africans now demand full political rights. Africans want the vote so that they can participate fully in South African affairs and order fundamental changes in the way their country is organized. Africans want to share meaningful power. Such demands, naturally, are an anathema to President Botha and his regime.
Neither corporate disinvestment nor officially imposed US sanctions have altered the political responses of Botha and his ruling National Party. Indeed, they won a major victory in last month's white elections partly by campaigning against the US and other outside antagonists of apartheid.
The imposition of foreign sanctions certainly concerned the largely English-speaking leaders of South Africa's big businesses. But if disinvestment played any part in the election at all, it produced defensive responses on the part of most whites.
Thus far the campaign to compel white South Africa to come to terms or negotiate with black Africans, by denying opportunities to export coal, steel, agricultural products, Krugerrands, and so on to the US, has produced no amelioration of apartheid. Nor has the cutting off of direct air links. White South Africa is as determined as before to deny the vote to black Africans.
Fewer than 200 of the 250 US companies that recently operated in South Africa are still there. Since 1985, about 130 have sold or given their businesses and factories to local managers or employees, or to Japanese, European, or South African entities.
More than half of the US corporations and banks have sold their assets and goodwill to local companies. There is little dispute that the primary result of their actions thus far has been the transfer of US assets inexpensively. Black employment levels have also fallen.
Neither the South African-owned companies nor the new managerial entities have pledged to maintain the affirmative-action policies of the departing companies, most of which were linked to the code of conduct articulated by the Rev. Leon Sullivan of Philadelphia. Mr. Sullivan recently urged all code signatories (now about 125) to leave South Africa by next March. In effect, given the South African government's refusal to reform meaningfully or bargain with blacks, Sullivan has given up on his own affirmative-action agenda, and on reform from within by example.
Whether the new wave of disinvestment that has followed Sullivan's announcement reflects corporate agreement with his disenchantment, or other criteria, the US companies that remain feel lonely and beleaguered. A few derive significant returns from their South African activity, but most receive less than 1 percent of their total overseas profits from South Africa.
They have left because they were losing market shares and money, or making far less than they once did in the straitened economic circumstances of today's violence-prone South Africa. Most have little faith in any early resumption of stability or economic growth.
Moreover, many have been influenced by the future attitudes of US consumers. Few companies want to be boycotted in their primary markets. Many were tired of being harassed in their board rooms by US protesters. Finally, the failure of the South African election to return real reformers to office has sent and will continue to send companies scurrying out of that country.
It is often argued that the withdrawal of US industry and investments from South Africa will hasten the day when black South Africans will successfully revolt. The theory is that the white economy will be so weakened by disinvestment and sanctions that the South African determination to resist will collapse and Africans will triumph. But there is every evidence that the departure of Americans has instead made South Africa stronger. It has begun to manufacture its own personal computers, just as it long ago made its own guns in the face of a world embargo. There is no evidence, either, that oppressed peoples become stronger as they or their countries become poorer. The evidence is exactly the reverse.
A broader boycott of South African goods would certainly have a greater impact on the South African economy than has US disinvestment or existing sanctions. But it is unlikely to do more than stiffen white South Africa's will to resist.
Aside from a depressing effect on the price of gold, which provides up to 75 percent of South Africa's annual foreign-exchange earnings, there is no easy way to compel whites there to feel pain. Even steady sales of American gold, likely to be resisted in Europe, might not put sufficient pressure on the South African government.
The precise economic shortcuts have not yet been invented. Whites and blacks will thus slug it out in South Africa for years. Only a breakthrough of common sense and statesmanship among National Party whites can avert the continued turmoil and tension that are on the country's horizon. But no one should count on it.
Robert I. Rotberg is a professor of political science and history at the Massachusetts Institute of Technology.
