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The life 
& times 
of
Warren Swil
 
 
 
 
 
 
 
 

V 1

 

by Warren Swil

The San Diego Union Sept. 5, 1976

The call for a general strike that went out to black South Africans in recent weeks heralds the arrival of a significant phase in South Africa’s turmoil. 

Black South Africans are beginning to flex their economic muscles, and white South Africa, already beset with stagflation and recession could be forced to accede to black demands to save their economy. Although the strike was only a partial success, its affect on the delicate South African economy could be serious.

In a recent speech, Dr. J. A. Hurter, chairman of one of the larger national banks, Volkskas, warned that South Africa was facing one of its most serious economic crises in 30 years. This was before the call for black strike action went out two weeks ago. There has been a continuing drop in business activity, Dr. Hurter said, while inflation is still rampant. At the same time the country’s balance of payments deficit has become a source of growing concern to (white) businessmen. Growth measures designed to stimulate the economy, said Dr. Hurter, would have to be delayed until inflation was brought under control.

The South African economy, although it has become more diversified in recent years, is still primarily based on the mining industry. As the world's largest producer of gold and as a major exporter of diamonds, the South African economy remains particularly vulnerable to price fluctuations in the two commodities. While the rest of the world went through its most serious post-war recession in 1974 and 1975, South Africa was insulated from the worldwide slump because the price of gold held around $150 an ounce.

When the two-tier system for marketing gold was initiated South Africa rejoiced, for it meant she could now sell on the open market at a price three or four times higher than the $42 an ounce price used by central banks. For this reason, the South African economy remained buoyant through 1974 and 1975. But now that the free market price of gold has slumped to about half its 1974 peak, South Africa has slipped into a severe recession. 

Unable to sell its gold as profitably as it had over the past few years, the country's balance of payments deficit has been growing since the middle of last year.  In August 1975, the government devalued the South African Rand by about 22 per cent, from $1.40 to a new low of about $1.15. It was hoped that increasing the cost of imports for South African consumers and by decreasing the price of exports for foreign customers would help to reduce this deficit.

But an inevitable side effect of the devaluation was a boost to the rate of inflation within South Africa (which was already more than 10 per cent) as the prices of imported goods rose steeply. As happened in the United States and Europe, rapid inflation and the balance of payments situation lead the country into its present recession. Even if the dramatic decrease in the price of gold had not occurred, South Africa would have experienced a business slowdown this year.

Because of the structure of the South African economy, the first to suffer have been the blacks because most skilled jobs, and all the professions, are exclusively dominated by the whites - a situation which has existed for many years. It became officially sanctioned when the government enacted its Job Reservation legislation (as it is known in the country) which effectively excludes blacks from most skilled jobs.

The government was goaded into passing the legislation by conservative white trade unions that wanted protection from black competition. One of the results has been a constant shortage of skilled manpower, which in turn has resulted in wage inflation for white workers, In South Africa's current recession, blacks have suffered because as unskilled workers that are the first to be laid off. They do not receive unemployment or social security benefits.

Furthermore, a massive mechanization program now under way in the mines (South Africa's largest employers of black labor) threatens to eliminate hundreds, maybe thousands, of black jobs in the next few years. One study has estimated the number of black unemployed could grow to more than two million by the end of this year.

It is clear that if the ranks of black unemployed are allowed to grow unchecked it will become a major factor in the urban unrest now threatening the country. Since the first outbreak of violence in June, the foreign capital available to South African industry has all but disappeared. A Cape Town newspaper reports South African bankers are finding it difficult to raise money abroad; even traditionally friendly and helpful financiers are reluctant to invest in the land of SOWETO.

This lends credence to reports that when South African Prime Minister John Vorster met with Secretary of State Kissinger in Germany in June, he offered to help find a solution to the Rhodesian impasse in exchange for Kissinger’s help in arranging for South Africa to obtain credit from the United States Import-Export Bank.

Economics is the cause of most of South Africa's admittedly complex problems. One of the dilemmas the government has been battling for years has been how to channel and deal with black economic grievances. Black trade unions are illegal. White trade unions, in order to be officially recognized as part of the collective bargaining process, must retain their white exclusivity.

A case in point is the South African Society of Journalists which until last year was exclusively white and thus recognized and certified as an official trade union. Last year the SASJ opened its ranks to those black writers who wished to join (none did because they had already formed their own, unofficial union) and thus SASJ lost its official status.

The white trade unions have, historically, been among the most conservative organizations in South Africa, and have often impeded any moves the government might have made in opening up skilled positions to blacks.

But in recent years white industrialists have been increasingly vocal in their calls to recognize black trade unions. South African industry has been plagued by numerous wildcat strikes over the past few years; the gold mines have been especially hard hit, losing more than 10 per cent of their production because of stoppages last year. Some of the strikes have erupted in violence and 11 mineworkers at Carltonville, near Johannesburg, were killed last year. 

But the government has been paralyzed: either it tolerates the increasing frequency of spontaneous, short-lived stoppages or it recognizes some form of collective bargaining machinery for blacks, allowing them to form their own trade unions - possibly resulting in larger, more effective strikes.

The history of economic action taken by black South Africans goes back at least 20 years. In 1961, when the white government announced its intention of withdrawing from the British Commonwealth and becoming a republic, the then-legal African National Congress called for a nationwide general strike on the day the republic was to be officially inaugurated - May 31, 1961.

On the first day of the strike, less than 20 per cent of the black labor force went to work. A state of emergency was proclaimed, and the army was called in to take over many essential positions. The government acted speedily and ruthlessly: squads of para-police and white citizens were sent into the black townships where workers were attacked and forced back to work. The strike lasted about five days.

It was the last major strike action taken by blacks until recent weeks, because their organizations (the ANC and the Communist Pan African Congress) were immediately banned and their leaders imprisoned indefinitely or silenced by administrative decree. Now the blacks have begun to take economic action once again.

The writer, who was raised in Cape T own, South Africa, was a reporter for the South African Associated Newspapers. He is continuing his education at San Diego State University.