| Statement before the Senate Foreign Relations Committee on June 22, 1988. Mr. Whitehead is Deputy Secretary of State..sup.1 |
| Thank you for this opportunity to present the Administration's views on Senate Bill 2378, the amendments to the Comprehensive Anti-Apartheid Act of 1986. If enacted, this legislation could have important consequences for the future of American diplomacy in South Africa and in the southern Africa region. For reasons I hope to make clear in my testimony, the Administration strongly opposes Senate Bill 2378. American interests are not served by legislation which requires that we experiment in the economic destabilization of South Africa without genuine prospects of contributing to the solution of that country's problems. |
| Despite our strong objections to this bill, we are quick to recognize the feelings which motivated it. South Africa's apartheid system is repugnant to all Americans. While many governments tolerate or even surreptitiously encourage discrimination on the basis of ethnicity, only in South Africa is racial discrimination a civic duty and the failure to practice it a punishable offense. Among nations which profess to identify with Western, democratic values, only South Africa classifies individuals, herds them into groups, and strips them of their individual political rights according to racial and ethnic criteria. This monstrous injustice affronts us all and cries out for redress. |
| Our aversion deepens when we are confronted by the stubborn resistance of the South African Government to appeals for peaceful change. Successive generations of black activists-during the defiance campaigns of the early 1950s and early 1960s, during the Soweto uprising of the 1970s, and in the latest wave of township protest from 1984 to 1986-have been shattered by progressively harsher and more sophisticated forms of official repression. Despite repeated, worldwide censureand the imposition of severe sanctions-some of them dating back morethan 20 years-South Africa's governing elite remains steadfast in its determination to retain its monopoly on political power. |
| Injustice and inequality are entrenched in South Africa, but not all the trends are negative. Over the past 10 years, the nature of apartheid has changed markedly. Numerous petty apartheid provisions have fallen by the wayside, the Pass Laws have been scrapped, central business districts have been opened to blacks, and black labor unionshave been legalized and have made impressive organizational strides. These changes testify to a growing awareness among many South African whites that apartheid in its purest sense is impractical and uneconomic, if not actually immoral. Consistent with this trend is the finding of the Dutch Reformed Church 2 years ago that no scriptural justification exists for the practice of apartheid. Another institutional pillar of the Afrikaner establishment, the Broederbond, also broke with apartheid orthodoxy at that time. Regrettably, this willingnessto dispense with some forms of racial discrimination has not yet developed into a consensus in favor of addressing the truly critical issue confronting South Africa, which is the issue of permitting all South Africans to participate in deciding how and by whom they are governed. |
| A clear and dispassionate analysis of the crisis gripping South Africa is required if the United States hopes to play a constructive role there. Our interests demand that we avoid the pitfalls of desperate activism on tbe one side and resignation and disengagement on theother. We must accept that the transition to a nonracial democracy in South Africa will inevitably take longer than all of us would like. We must also understand that South Africans themselves, black and white, will be the agents of their own liberation, with outsiders, including the United States, playing only a secondary role at best. |
| Above all, we need to acknowledge that such limited influence as we currently possess derives from our continuing presence on the ground in South Africa. A progressive U.S. business presence, an official aid program reaching out to tens of thousands of black South Africans, our persistence in urging South Africans to confront the imperatives of dialogue and compromise and to consider what they are for as well as what they are against-these are the most important assets we have for challenging apartheid. We can condemn, censure, and sanction-as this legislation requires-and hope against logic and experience that we can achieve some beneficial result. Or we can take a longer view which refuses to dis-' engage, preserves our lines of communication, our contacts, and our limited resources within South Africa and positions the United States to intervene positively at the moment when our limited leverage can accomplish the most good. |
| The Fallacy of Sanctions |
| Three years ago, at the height of the violent unrest in black townships across South Africa, it was fashionable to argue that apartheid had entered its final crisis. Activists in South Africa, exiled black leaders, and many observers in Europe and the United States predicted that only a final push was needed to topple the system. Comprehensive and mandatory international sanctions were thought by some to be precisely the push required. |
| These prognostications were obviously wide of the mark. Few persons familiar with existing power relationships in South Africa seriously believe that a rapid resolution of the crisis is possible-with orwithout sanctions pressure. Surely it was unrealistic to expect theSouth African Government to respond to our pressure by ending the state of emergency, releasing political detainees, or meeting any of the other conditions for lifting sanctions outlined in the Comprehensive AntiApartheid Act. Not surprisingly, the South African Government refused categorically to meet these demands. |
| Presumably in recognition of these factors, Congress has modifiedits expectations. In reporting out House Resolution 1580, the HouseForeign Affairs Committee describes sanctions as "part of a medium- to long-term approach designed to maximize both internal and externalpressure on the apartheid regime." The House report further notes that to ensure their effectiveness, sanctions must be multilateralized;that U.S. pressure alone will be insufficient to accelerate the pace of change in South Africa. |
| It should be clearly understood that the Administration has consulted intensively with South Africa's main trading partners, all of whom are major allies of the United States. For the most part, these governments are strongly disinclined to either follow an American leador act unilaterally in adopting further punitive sanctions. Our allies either reject or are highly skeptical of the premise that by destabilizing the South African economy the West can somehow engineer a relatively peaceful transition to democratic rule in South Africa. Moreover, these governments judge-as does the Administration-that international sanctions cannot be effectively enforeed without recourse tomilitary measures. |
| As some of you may be aware, we have received in the past 2 weeksseparate, official communications from the European Community and the British Government informing us of their deep concerns over extraterritorial provisions in this bill. Passage of S. 2378, particularlythe secondary boycott features, could lead to GATT [General Agreement on Tariffs and Trade] disputes with our major trading partners and undermine the U.S. negotiating position in the current round of GATTtalks. |
| We should not, therefore, delude ourselves into thinking that it is possible to internationalize sanctions under American leadership.Our allies will resist this approach, at least until such time as wecan demonstrate convincingly that cutting trade links, selling off assets, and relinquishing contacts across the board in South Africa will result in something other than a costly, symbolic protest. |
| The central fallacy of the sanctions approach is not simply that it isn't feasible. Rather, the problem lies with a fundamental misreading of South African political and economic realities and with the acceptance of a false correlation between economic pain and positive social change. Simply put, sanctions are the wrong tool brought to the wrong job. |
| Sanctions are the wrong tool because South Africa has the resources to resist an economic siege and has been preparing for such a contingency for many years. Although heavily dependent on international trade, South Africa has domestic deposits of virtually every key raw material input needed for an industrial economy with the major exceptions of crude oil and bauxite. The South African Government and private sector have spent billions of dollars stockpiling strategic imports, ranging from crude oil and bauxite to computer and aircraft parts. These stockpiles would provide a cushion against shortages until alternative sources of supply could be found or import substitution projects completed. |
| Based on previous experiences with international embargoes against South Africa, we believe that direct controls on shipments to SouthAfrica would probably not prevent South African importers from obtaining the foreign supplies that they need. One possible exception would be certain high-technology goods, for which adequate enforcement mechanisms already exist. |
| With regard to South African exports, 65% of export earnings are made up of low-bulk, high-value items such as gold, diamonds, and strategic minerals. Most economists believe that an effective boycott of these commodities would be difficult or impossible to enforce. Theremaining 35%, mainly steel and manufactured products, would be morevulnerable to a general boycott. Even here, however, a boycott would not be airtight. For example, in the past 2 years, sanctions have closed 80% of South Africa's traditional export market for steel, yetSouth African steel exports were only down by about 2.9% through October of last year. Given South Africa's proven capacity for trade realignment and diversion and its still untested capacity for full-scale sanctions-busting, we estimate that even reasonably well-enforeed, comprehensive UN sanctions would cut total export receipts by something less than 25%. |
| The net result of a total trade embargo on South Africa would almost certainly be far less dramatic than proponents of the sanctions approach believe. The impact is likely to be a moderate recession over the medium term, comparable to the 1982-86 period in South Africa.Over the longer term, constraints on growth and a decline in competitiveness could push South Africa deeper into recession. |
| But, whatever their economic consequences, what counts is the political impact of sanctions. As one leading South African Marxist theoretician recently noted in a reversal of his previous position, the criterion for sanctions should be the question of whether they consolidate the position of the black worker and black organizations. He concludes that sanctions don't meet that criterion. As I will point out, sanctions are far more likely to produce perverse results: mild discomfort, at most, for white elites, but a risk of severe economic dislocation for the black work force. |
| The Economic Costs to the United States |
| Sanctions are not cost free for the United States; S. 2738 will require U.S. business to find new markets, assuming they are available, for over $1.2 billion in annual exports of mostly manufactured and high-technology goods. The foreed liquidation of over $1 billion in direct U.S. investment will change little in South Africa except toconsolidate the position of local business interests acquiring theseassets at well below market value. It is reasonable to expect that at least some U.S. companies will challenge the constitutionality ofthis provision on the grounds that it results in the confiscation ofassets without fair compensation. |
| While the precise impact of sanctions on the U.S. economy is hard to measure, some industries will be more seriously affected than others. Studies indicate that the U.S. coal industry has already lostan estimated $250 million over the past 3 years. A sizable portion of the loss is due to market distortions caused by existing U.S. sanctions against South Africa. Foreign customers of U.S. Government enriching services who use South African uranium provide $350approximately million a year in revenues. Some of these customers will take their enrichment business to Europe and the Soviet Union if the United States cannot process their material. |
| These estimates do not include the potential cost of South African countersanctions. Even a temporary disruption of strategic mineralexports to the United States would have serious repercussions over abroad range of U.S. industries. |
| According to the U.S. Bureau of Mines, the direct economic coststo this nation resulting from a decision to embargo South African strategic and critical minerals imports are estimated at $1.85 billion per year About 94% of these estimated costs are for two platinum-group metals, platinum and rhodium. |
| Platinum is primarily used in the production of automotive catalytic converters, and about two-thirds of 1986 total domestic industrial consumption was used for this purpose. In 1986, the United States imported 86% of its platinum supplies from South Africa. |
| Outside the Soviet bloc there are insufficient alternative supplysources to South Africa to meet U.S. platinum metal requirements. In 1986, the total production of countries other than South Africa andthe Soviet Union, including domestic primary and secondary production, could only satisfy about 40% of U.S. demand. |
| Rhodium is a very rare metal absolutely essential for compliance with Clear Air Act auto emissions standards for nitrous oxides. Omitting the Soviet Union and other centrally planned economies, U.S. consumption of rbodium was almost one-half of the Western world total. The primary application of rhodium is in the production of automotivecatalytic converters. Over 70% of U.S. consumption (93,000 ounces in 1986) was used in this application in 1986. Rhodium demand is increasing worldwide as emission-control requirements are placed on nitrous oxide emissions and as the control requirements are applied to a larger fleet of vehicles. In 1986, South Africa provided about 53% ofWestern world supply, the Soviet Union 38%, and secondary recovery 5%. There are insufficient non-South African rhodium supplies to meetU.S. demand. |
| It should be pointed out that while the South African Government has never threatened the United States with a disruption or a cut-offof strategic minerals supplies, it certainly has this option. Pretoria also has the option of slapping countersanctions on neighboring black states, all of whom are critically dependent on South African trade or transport routes, or both. Passage of this bill would put South Africa's intentions to the test with regard to both the United States and our interests in stable development of the region. |
| The Political Costs of Sanctions |
| If sanctions are the wrong tool, they are also being used for thewrong job. Ostensibly aimed at influencing South Africa's key decisionmakers, sanctions miss this target altogether while hitting everyone else, causing collateral damage in precisely those sectors of South African society which are pushing hardest for fundamental, peacefulchange. |
| If comprehensive, international sanctions against South Africa are extended, we should anticipate that the main losers will be South African blacks. They will be the first to suffer the effects of a prolonged recession in terms of lost opportunities; lost jobs; and decreased government spending on black housing, black education, and services provided to black townships. This is an unintended and possibly tragic economic implication of the sanctions approach. |
| At the same time, the foreed withdrawal of U.S. corporations from South Africa will end funding and logistical support for a wide range of programs designed to promote black economic empowerment, fosterblack self-reliance, and build professional and leadership skills. U.S. and other Western corporations play an important part in helping to sustain an estimated 2,000 such programs which exist at the grassroots level. In the face of mounting restrictions on most forms of opposition political activity, these programs provide a vital organizational network and fall-back position for those blacks working to build the power bases necessary for challenging the government. |
| In less direct fashion we stand to lose other opportunities to deflect repressive measures directed at blacks. If the threat of a total economic embargo on South Africa becomes reality, the South African Government will have even fewer reasons to heed outside advice on what it regards as its internal political affairs. Although our standing with the South African Government declined sharply following passage of the Comprehensive Anti-Apartheid Act in 1986, we retained enough influence to argue persuasively in favor of a stay of execution forthe Sharpeville Six. [Six black South Africans convicted for a murder committed during a protest demonstration. The United States has joined several other governments and groups in appealing for clemency for the six.] We have also successfully lobbied to postpone and, hopefully, sidetrack pending legislation which could end all foreign funding to groups whose activities the government broadly defines as "political." These are small but significant achievements. We cannot realistically expect to repeat them if we continue down the road toward punitive trade embargoes and a severance of ties with South African officialdom. |
| I cannot accept the argument that by inflicting additional economic hardship and political frustration on South African blacks we create the conditions necessary for a successful challenge to the apartheid system. Nor is it reasonable to think tbat sanctions will have a demoralizing effect on white elites, thereby rendering them more vulnerable to pressures for fundamental change. Under any conceivable sanctions scenario, the South African Government will assign top priority to protecting white jobs and to ensuring that the police and military are funded at levels sufficient to avoid any decline in their capabilities. The suppression of new outbreaks of black unrest is a foregone conclusion. To suppose that outside powers can rearrange government priorities through economic quarantines and reduced contact with South Africa is to misread tragically the staying power of the Afrikaner minority and its determination to put its security ahead of allother interests, including the interests of South Africa as a whole. |
| South African blacks will be the primary, but not the only, victims of an international sanctions campaign against South Africa. Other victims will be those South African whites who most closely identify with American democratic ideals and who support black aspirations for a more just society. Leaders such as Frederik van Zyl Slabbert, Wynand Malan, Helen Suzman, and Denis Worrall staunchly oppose an economic and diplomatic quarantine of South Africa. As they struggle to build bridges across South Africa's racial divide, they need the support that a strong U.S. presence, both official and unofficial, provides. They have seen sanctions contribute to a siege mentality among whites which the ruling National Party has successfully fostered and exploited by converting to its ranks thousands of relatively moderate, English-speaking voters over the past 2 years. They have also witnessed a steady erosion over the past year of fundamental civil liberties even in the hitherto protected sphere of white polities. The same noose which has been used to strangle black dissent is now coiled expectantly around the white, reformist opposition. By dissociating ourselves from South Africa, we simply make it easier and less costly for authorities to pull that noose tighter. |
| By the same token, ultraconservative factions in South Africa areincreasingly drawn to the prospect of cutting trade links, ending the U.S. business presence in South Africa, and limiting contact with the West. From their standpoint, a strong American presence is an unwelcome restraint on South Africa's internal and external policy options. Conservatives resent what they regard as American meddling in South Africa's internal affairs, including our financial and moral support to antiapartheid groups, and our persistance in seeking ways to dismantle racial barriers and promote dialogue. They also resent American films and televisions programs, our music, journalism, and popular culture because of their supposedly subversive influence on a younger generation of Afrikaners. South Africa's UN representative was speaking to this constituency when, in responding a few months ago to harsh criticism of South Africa in the General Assembly, he invited the international community to "do its damnedest" to Pretoria. He could have as well added: "and close the door behind you." Neither hardliners in the National Party, nor the growing conservative opposition,nor the more militant organizations even further to the right will mourn the absence of Americans from South Africa. |
| Sanctions and the Black Opposition Claims that the overwhelming majority of South African blacks support sanctions cannot be substantiated. Certainly, respected black leaders of community, labor, church, and student organizations, as well as the ANC [African National Congress] and PAC [Pan-African Congress] in exile, continue to call publicly for further punitive measures against Pretoria. Some, like Archbishop Desmond Tutu, believe that sanctions are the only alternative to uncontrollable violence. Leaders of the front-line states have also, in past years at least, been outspoken in calling for U.S. and Western sanctions against South Africa. |
| Yet there are signs that over the past 2 years a serious rethinking of the sanctions strategy has taken place. Some mass organizations, such as conservative black churches and Chief Buthelezi's Inkatha movement, which claims to represent more than 6 million Zulus, have always been opposed to international sanctions. Other organizations, such as the National African Federated Chamber of Commerce, which represents most major black business interests, officially subscribe to sanctions while leaving individual members ample room to express doubts. Even within the staunchly prosanctions COSATU [Congress of South African Trade Unions], debate simmers over the wisdom of promoting international embargoes. |
| While it would be wrong to infer that black opposition leaders are simply out of touch with their rank and file, debate over the effectiveness of sanctions is unquestionably livelier now than ever before. This new mood is captured in Soweto playwright Gibson Kente's popular drama Sekunjalo, which depicts comrades destroying a township by intimidating, burning, and boycotting. It ends with a declaration ofhatred for Afrikaner rule and a dance routine in which the actors sing "Who's gonna plant that cane? Who's gonna drive that train? Who's gonna fly that plane?" Kente's actors recount the events of the 1850s when the Xhosa nation killed its cattle and burned its grain in the faith that the dead would rise and the Russians would come to drivethe British into the sea. The actors compare those times with the current calls for sanctions and bemoan the self-destructive tradition of black South African resistance to white rule. |
| The Marxist intellectual and leader of the black consciousness-based National Forum, Neville Alexander (hardly an apologist for apartheid), makes the same argument from a different perspective. He wroterecently that "I believe . . . that the insistence on total sanctions is senseless-as senseless as an unqualified academic boycott andunlimited school boycotts-which amount to suicide if you do not havereal power, and if the government is not yet so weak that such pressure can bring it to its knees." |
| Across South Africa's borders, reassessments of the effects of sanctions and possible South African countersanctions on the economies of the frontline states are also underway. As a result, front-line leaders have modified their rhetoric, moved serious discussions of sanctions to the margins of international meetings and abandoned plans to apply sanctions of their own. Trade between South Africa and most neighboring states has actually increased over the past year. |
| These observations are not meant to suggest that black South Africans have come to terms with white domination or that South Africa's black-ruled neighbors have accepted the status of satellites to the region's economic superpower. What has occurred, I believe, is that sanctions have been reevaluated, and strong misgivings have developed about both their high costs and effectiveness. |
| Keeping Open U.S. Options |
| I alluded earlier to the combination of outrage and impatience with which many Americans react to the situation in South Africa. But neither we nor South Africans can afford U.S. policies motivated primarily by passion. There exists a broad American consensus on what iswrong in South Africa and on the steps South Africa and its citizensmust take to correct these wrongs. This consensus could provide thebasis for a realistic, workable, and nonpartisan approach to the South African crisis. |
| Any sound American policy toward South Africa must take into account at least two fundamental constraints. First, we must accept thatSouth Africa's crisis is an enduring one. There are no quick solutions. Resorting to drastic remedies-such as the misuse of American power to destabilize the South African economy-only increases chances of a catastrophic outcome for all South Africans. Second, we must alsoaccept that our leverage is limited. South Africa can survive-even thrive-without trade or contact with Americans. Our mission should be one of using all available means to maximize our influence and leverage. This can't be achieved through a policy of economic and diplomatic dissociation from the problem. |
| Operating from these premises, the Administration has constructedan approach which emphasizes both the protection of enduring U.S. interests in South Africa and the promotion of rapid, fundamental change in that society. This approach has a number of key elements. |
| * The Administration has undertaken strenuous efforts to keep open all our lines of communication, to expand contacts across the racial and political spectrum, and to open up opportunities for the kinds of negotiations which are South Africa's only alternative to a slow descent into civil wan Over the past 8 years, all groups in South Africa, including the full range of opposition movement leaders, have hadaccess to the highest levels of our government. We continue to make it clear to the South African Government that we believe it has a special responsibility to create the necessary conditions in which negotiations with credible opponents can take place. |
| * Expanding our assistance to apartheid's victims is a top priority. South Africa's struggling black communities need our financial support, our technical and professional training, and our help in developing organizational and leadership skills. These are the building blocks from which the disadvantaged majority will construct a more just and more democratic future for South Africa. To the extent that numbers of blacks already possess the knowledge and the skills, and hence the economic power, that a modern industrial state requires, they have greatly strengthened their bargaining position vis-a-vis South Africa's governing elite. We must work to develop further this leverage and to help turn it to political advantage. This is the central thrust of our official aid program to South Africa. Obviously, sanctions-induced unemployment, a turn by South Africa toward autarky and tighter state control of the economy, and a reduced American presence in South Africa would all work against this effort. |
| * In dealing with South Africa, we must continue to put a strong emphasis on the regional context. Turmoil in South Africa continues to spread outward in shock waves which threaten the economic and political stability of neighboring states. Our regional diplomacy is committed to reducing these states' economic vulnerabilities and to easing misunderstandings and tensions in their dealings with South Africa. |
| * In this regard, negotiations currently underway to secure Namibian independence and the withdrawal of all foreign troops from both Namibia and Angola assume special importance. A negotiated solution would be a signal achievement for American diplomacy and would win widespread approval throughout Africa. Progress has been made which even sympathetic observers would have said a short time ago was impossible. We have laid down the conceptual basis for a settlement and brought all parties to the realization that Namibian independence, the removal of foreign armies from Angola, and the resolution of Angola's internal conflict are interrelated problems. None of these problems can be solved in isolation from the others. |
| Our mediation continues, and it is important that Congress not undercut this effort by ordering drastic changes in our bilateral relationship with one of the negotiating parties. While it may be in South Africa's best interests to achieve a negotiated settlement in Angola and Namibia, Pretoria could well decide that a harsh, diplomatic rejoinder to expressions of U.S. hostility is a higher immediate priority. |
| As a final note, I would like to point out that in a few months' time a new U.S. administration will enter office and will no doubt undertake a review of U.S. policy toward South Africa and the region. It would be wrong for Congress to commit the United States, in the final days of this Administration, to the extreme measures contemplated in S. 2378. To do so will deny the new administration the optionof continuity in U.S. policy while at the same time seriously restricting its choices before it has even entered office. |
| The South African dilemma will be with us for some time to come. The only reasonable course Americans can adopt is one which ensures that we retain as many diplomatic tools and channels of influence as possible in the search for ways to remain relevant and involved in finding a solution. Regrettably, S. 2378 takes us in precisely the opposite direction. |
| 1The complete transcript of the hearings will be published by thecommittee and will be avallable the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402. |
