3.3 Central issues of the union of sa and the new sa  (Page 6/2)

Economic and management sciences

Grade 7

Economic policy direction (1910 – 1994)

Module 14

Central issues of the union of south africa and the new south africa

1931

In 1931, twenty-one years after the founding, or the coming of age of the Union of South Africa in 1910, things looked rather gloomy.

On the economical front things were not going well:

• The world was in the grip of a depression since 1929.
• Within four years, the production of the manufacturing sector dropped by one-fifth.
• The contribution of agriculture was down 50%.
• Capital was flowing out of the country.

Jan Smuts wrote:

“The country’s economy had never been put to a test of this nature.”

Three crises in particular were identified:

1. white Afrikaners and the English speaking community were not united; the gold-mines had a limited lifespan the manufacturing sector was struggling.

(Problems on the economical front)

2. Farmers were dealing with serious agricultural challenges. The country was caught in a race against time to produce enough food for a fast-growing population.

(Problems on the agricultural front)

3. The black population was growing rapidly. This gave rise to white fears that numbers would eventually play a decisive role. What if the blacks took revenge? Would the blacks not one day bring harm to the whites who subjected them to their power?

(Problems on the racial front)

2006

What is the situation 12 years after the establishment of a “new south africa” regarding the same three aspects that were considered in 1931 (on the previous page)?

1. Today white unity is not the issue any more; it is national unity that counts. A recent opinion poll showed that a rift is developing between black and Indians on the one hand, and white and Coloured people on the other. The first group (60%) believe that relations between the two groups in question are improving, while the second group (40%) are disillusioned, especially as a result of:

• The distorted image of black empowerment and preferential treatment of blacks when posts are filled.
• The change in name of places and buildings.
• Interference in the selection of sports teams.

2. Over the past seventy years the following happened on the economic front:

• The country has freed itself from its dependence on gold and agriculture, and a strong manufacturing sector was established.
• The country has managed to provide for its own provision of food.
• Market-oriented capitalism based on private ownership is unrivalled today. But the problem that South Africa cannot provide jobs for all its people persists. Strong unions and low productivity have caused the country to lag behind its competitors. And now we are facing the nightmare of Chinese competition at our front door. About 40% of the country’s workers have no jobs.

3. One fear has become a reality, namely that a fast-growing black population would eventually undermine white authority. This happened in the 1990s.

(This information comes from an article by Hermann Giliomee in Die Burger of 10 August 2006.)

Market-oriented Capitalism