Letter to the Speaker of the House of Representatives and the Chairman of the Senate Foreign Relations Committee Transmitting a Report on Apartheid in South Africa

October 1, 1987

Dear Mr. Speaker: (Dear Mr. Chairman:)

Pursuant to Section 501(b) of the Comprehensive Anti-Apartheid Act of 1986, I hereby transmit the first annual report on the extent to which significant progress has been made toward ending the system of apartheid.

Sincerely,

Ronald Reagan

Executive Summary

Pursuant to Section 501 of the Comprehensive Anti-Apartheid Act of 1986 (The Act), the President has transmitted to the Speaker of the House and the Chairman of the Committee on Foreign Relations of the Senate, a report on the extent to which significant progress has been made toward ending the system of apartheid and establishing a nonracial democracy in South Africa. Included is the President's recommendation on which suggested additional measures, if any, should be imposed on that country.

The report concludes that there has not been significant progress toward ending apartheid since October, 1986, and that none of the goals outlined in Title I of the Act -- goals that are shared by the Administration and the Congress -- have been fulfilled. Moreover, the South African Government's response to the Act over the past year gives little ground for hope that this trend will soon be reversed or that additional measures will produce better results.

In reviewing the twelve-month period since the Act became law, the report describes a continuing bleak situation for blacks in South Africa who face increased repression, harassment, and -- even in the case of a significant number of minors -- imprisonment. Press censorship has been intensified, and illegal cross border raids by South African security forces into neighboring countries have resulted in the loss of innocent lives.

In the economic area, the report points out that sanctions have had minimal impact on interrupting South Africa's external trade because of that country's ability to find substitute markets for its products outside the United States. Where there has been a significant impact, notably in the coal and sugar industries, the loss of export markets in the United States has caused hardship among black workers who are experiencing greater rates of unemployment. Overall, South Africa's economic performance has not been robust due to the poor investment climate, unfavorable international conditions, and drought in the farming areas. Sanctions have incrementally exacerbated an already existing problem.

The report also takes note of considerable disinvestment by American companies since the beginning of the recent unrest in South Africa. The report points out that the most painful impact of this trend toward disinvestment has been the disappearance of company-funded social, housing, educational, and job training programs designed to improve living standards and career opportunities for black South Africans.

In political terms, the Comprehensive Anti-Apartheid Act of 1986, which followed selective measures instituted by Executive Order in 1985, sent a strong message of abhorrence of apartheid on the part of the American people. The immediate result, however, was a marked reduction in our ability to persuade the South African Government to act responsibly on human rights issues and to restrain its behavior in the region. Perhaps the single ray of hope during the period under review was the appearance of ferment within the Afrikaner community where there is increasing public discussion of ``power sharing.'' While this and similar terms being discussed are still devoid of quantifiable substance, they may be a precursor to eventual negotiations between the South African Government and the black leadership, a goal which the U.S. Government will be seeking to promote.

Because of the President's conclusion that the economic sanctions embodied in the 1986 Act have not been effective in meeting the goals on which the Congress and the Administration agree, and his conviction that additional measures would be counterproductive, the President recommends against the imposition of any additional measures at this time, including those mentioned in Section 501(c) of the Act, and continues to believe that the current punitive sanctions against South Africa are not the best way to bring freedom to that country.

What the United States now needs is a period of active and creative diplomacy -- bilaterally as well as in consultation with our allies and with our friends in southern Africa -- focusing on doing all that is possible to bring the peoples of South Africa together for meaningful negotiations leading to the creation of a democratic society. The essence of this process is to state clearly what goals and values the West supports, rather than simply to reiterate what it opposes. This was the purpose of Secretary Shultz's public articulation on September 29 of the concepts which must be addressed by all South Africans to undergird a settlement of political grievances and the formation of a just, constitutional, and democratic order in South Africa. His statement delineates precisely the values that the West stands for and wishes to see negotiated by South Africans as they chart a future free of apartheid.

Report to Congress Pursuant to Section 501 of the Comprehensive Anti-Apartheid Act of 1986

Pursuant to Section 501 of the Comprehensive Anti-Apartheid Act of 1986 (the Act), I am transmitting to the Speaker of the House of Representatives and the Chairman of the Committee on Foreign Relations of the Senate, a report on the extent to which significant progress has been made toward ending the system of apartheid and establishing a nonracial democracy in that country. Included also is my recommendation on which suggested additional measures, if any, should be imposed on South Africa.

Background

In Executive Order 12571, I directed all affected executive departments and agencies to take all steps necessary, consistent with the Constitution, to implement the requirements of the Act. I am pleased to be able to report that the Act has been implemented fully and faithfully. Executive departments and agencies are to be complimented for their excellent work in carrying out this complex piece of legislation.

The legislation sets out yardsticks by which to measure the effectiveness of the approach it embodies. The specific goals are laid out in the legislation itself. The Act, in Section 101, states that it and other actions of the United States were intended to encourage the Government of South Africa to take the following steps:

-- Bring about reforms leading to the establishment of a nonracial democracy in South Africa.

-- Repeal the State of Emergency and respect the principles of equal justice under law for all races.

-- Release Nelson Mandela, Govan Mbeki, and Walter Sisulu and all political prisoners and black trade union leaders.

-- Permit South Africans of all races the right freely to form political parties, express political opinions, and otherwise participate in the political process.

-- Establish a timetable for the elimination of apartheid laws.

-- Negotiate with representatives of all racial groups in South Africa the future political system in South Africa.

-- End military and paramilitary activities aimed at neighboring states.

The Status of Apartheid: October 1986 to October 1987

I regret that I am unable to report significant progress leading to the end of apartheid and the establishment of a nonracial democracy in South Africa. Indeed, the following review of events in South Africa since October, 1986 provides very little hope for optimism about the immediate future.

The State of Emergency has not been repealed. Instead, the earlier decree was toughened, press restrictions were tightened, and an increasing number of foreign journalists (including Americans) were expelled. Nelson Mandela, Govan Mbeki, Walter Sisulu, and other key prisoners have not been released. Instead, the number of political prisoners detained by the Government has vastly increased, including the detention of large numbers of minors, although some detained children were later set free.

South Africa is not any closer in late 1987 to respecting free speech and free political participation by all its citizens than it was one year ago. No timetable has been set for the elimination of the remaining apartheid laws. No clear and credible plan has been devised for negotiating a future political system involving all people equally in South Africa, and many of the legitimate representatives of the majority in that country are still ``banned,'' in hiding, or in detention. The Government of South Africa has not ended military and paramilitary activities aimed at neighboring states. Instead, such activities have been stepped up, as can be seen by Pretoria's April, 1987 raid against targets in Livingstone, Zambia; its May, 1987 incursion into Maputo, the capital of Mozambique; and the increase in unexplained deaths and disappearances of anti-apartheid activists throughout the region. The cycle of violence and counterviolence between the South African Government and its opponents has, if anything, gotten worse.

Internal Political Situation: Status of Race Relations

The absence of progress toward the end of apartheid has been reflected in generally negative trends in South Africa's internal political-economic situation during the past year.

In the recent whites-only election in South Africa, the National Party attempted to exploit a nationalistic backlash to foreign interference. Without any doubt, external factors played some role in the sizable vote totals for the National Party's right-wing opposition as well as for the ruling party itself. However the election results are interpreted, they appear to have put a brake on any inclination toward fundamental reform by the South African Government. They also helped to discredit the anti-apartheid stand of the Progressive Federal Party and have put the current government in the position of having to deal with an official opposition which for the first time in 40 years is to the right, not the left.

Even before the elections, and more so after their conclusion, the South African Government has spared no effort to stifle domestic unrest. This round of massive unrest, which began in 1984, has been put down with harsh states of emergency. The detentions and other measures taken by the security forces during this period severely damaged the opposition groups inside the country, particularly the United Democratic Front, an umbrella organization committed to the non-violent end of apartheid. The State of Emergency has resulted in the detention of much of the UDF leadership and the silencing of much of the organization's political expression. While the State of Emergency has failed to crush the organization, it has nevertheless powerfully affected its strategies and put the organization on the defensive.

The Government has also been cool to the KwaZulu/Natal Indaba, a convention representing all racial groups and a wide range of social and political organizations in the Natal Province. For many months the Indaba participants have been wrestling on a provincial basis with the great questions that must be addressed by South Africans, including the creation of a nonracial legislature and the drafting of a bill of rights. This process has shown that South Africans are capable of difficult mutual accommodation to advance the cause of racial justice and representative government. Regrettably, the government has been slow to see the wisdom of encouraging such efforts at negotiated change.

Equally disturbing has been the increase in regional tensions triggered in part by a sharp expansion of South African military, para-military, and covert operations. South African security forces have in the last year raided Livingstone in Zambia and Maputo in Mozambique, in violation of international law and, in the case of Mozambique, in violation of the Nkomati Accords (which established a regime of peaceful cooperation between the South African and Mozambican Governments). These raids, purportedly directed at the African National Congress, resulted in the deaths of innocent civilians. South African forces have also been engaged in a variety of other largely covert efforts in Swaziland, Botswana, and Zimbabwe aimed at keeping their neighbors off-balance and deflecting public attention away from the imperative of change at home and toward foreign sources of support for its opponents. Our sanctions were followed by an increase in such ill-considered actions. We have made our views known clearly, but Pretoria appears less inclined to consider external views than was previously the case.

Ferment in the White Community

A positive development has been the continuing ferment in the white South African community, reflecting, among many other internal and external factors, the messages of outrage and frustration sent by the United States and other interested nations.

Particularly notable is the debate occuring within the subcommunity of Afrikaans-speakers. The last year has seen the candidates (during the May elections) of the ``independents'' who broke away from their traditional philosophical home in the ruling National Party; the ``revolt'' of the University of Stellenbosch academics who deserted the National Party as a show of protest against apartheid; the increasing visibility of the extraparliamentary opposition, exemplified by the former head of the Progressive Federal Party, Frederick van Zyl Slabbert; and, most recently, the meeting in Dakar between leading Afrikaners and representatives of the exiled African National Congress, sponsored by Slabbert's Institute for a Democratic Alternative for South Africa (IDASA), and hosted by Senegal's President Diouf.

Even within the government, there have been hesitant, heavily qualified statements from the Cabinet concerning ``power sharing'' and the need to negotiate with black leaders. South Africans have not yet identified a realistic formula on which to base and begin serious negotiations, but the issue is surfacing publicly and is being discussed. Such developments suggest that despite all the negative things that have occurred in recent years -- the violence, killings, and repression -- there continue to be forces at work in South Africa that yet may lead to progress toward a negotiated settlement. South Africans are continuing to seek ways out of the impasse. Today, it is clearer than ever that the travesty of apartheid is South Africa's to solve.

South African Economy

South Africa's economy is ``open'' by world standards in the sense that a relatively high percentage of its gross domestic product derives from a combination of exports and imports. South Africa is a trading nation, which suggests that its economy would be relatively vulnerable to our sanctions. Yet this is not necessarily the case. The nature of South Africa's exports is such that the majority of export earnings come from sales of primary products -- gold and other metals and minerals -- that have a ready market internationally whether or not we choose to buy them.

After years of contending with embargoes on arms and oil, South Africa has shown itself adept at evading sanctions. The easiest way to avoid sanctions is completely overt -- simply shift to new export markets. The evidence available to us indicates that South Africa has been largely successful at developing new markets, both because of their willingness to undercut competitors' prices and because of the quality of their products and the perception by much of the world that South Africa is a reliable supplier. Although the sanctions voted by Congress in 1986 potentially affect a large percentage of South African industries, many still operate at capacity -- albeit with somewhat lowered profit margins -- because of their success in developing new export markets. New export markets for South African agricultural products, metals, and textiles have been found in the Far East, parts of the Middle East, and Latin America and, most ironic, in the rest of Africa. In fact, South Africa's trade surplus has risen, not fallen, since we and our major allies imposed trade sanctions last year.

On the other hand, many of the commodities covered by U.S. sanctions were already facing difficult international market conditions and chronic oversupply. It seems clear that sanctions exacerbated these problems and that some of the South African export industries have suffered some damage, including the sugar, coal, and iron and steel sectors.

South Africa is slowly recovering from an economic recession that began in 1981. This recession and sanctions, combined with the absence of business confidence and the resulting decline in new investments, have been major elements in the country's poor economic performance. It is important to appreciate, moreover, that although the South African Government has been able to avoid some of the economic effects of our sanctions in the short term, the long-term effect on unemployment and growth rates may well be more serious. There is a growing consensus among economists that a combination of sanctions, South Africa's inability to attract foreign capital, and a variety of other factors will mean that, at best, South Africa's gross domestic product growth will likely hover between 2.5 and 3.5 percent per annum for the foreseeable future. Yet studies indicate that annual real growth of 5 to 6 percent will be necessary to create jobs for the 350,000 new workers who will enter the labor force each year. To the extent that our sanctions contribute to a slowdown in real growth, we will have contributed both to an increase in unemployment that will hit blacks hardest, as population growth continues to outstrip economic growth, and to an erosion of prospects for economic progress by blacks in the future, once apartheid has ended.

In fact, economic growth and the openness of the South African economy have been among the major forces eroding apartheid. They also offer the best chance of bringing about its end. Black economic empowerment is one of the keys to progress. An open and dynamic economy provides jobs and skills for the majority of the population, provides the indispensable base for trade unions to address their grievances, and inevitably will improve educational possibilities for blacks as economic growth demands a better educated labor force.

In the overall economic context, a phenomenon worthy of note is the trend toward disinvestment among American-owned business firms in South Africa. The value of U.S. direct investment in South Africa has been cut nearly in half by disinvestment -- from $2.4 billion in 1982 to approximately $1.3 billion in 1986. By now, it is probably less than $1 billion. In most cases, U.S. firms have sold their South African holdings to their local managers and/or employees. Most of the rest have been sold to other firms, usually South African white-owned competitors, at fire-sale prices. In very few cases have these companies pulled up stakes altogether. Despite disinvestments, the products and services of departing U.S. firms remain generally available in South Africa. The main impact of disinvestment has been to damage fair labor standards programs. There is no question but that many projects in education, training, and community improvement funded by major foreign investors have been damaged or eliminated. During the past decade, U.S. companies have spent nearly $200 million on such projects. Because of disinvestment, this vital source of manpower and community development assistance has been severely cut back.

The concentration through disinvestment of more of South Africa's wealth in local white hands has, at least in the short term, marginally enlarged the economic gap between the races. Blacks at present control only a minute fraction of the country's physical capital and share equity. Black-owned enterprises contribute only about 1 percent to the nation's gross domestic product (although much more black economic activity takes place in the informal sector and goes unrecorded), and we doubt that black ownership totals more than about 2 percent of South Africa's capital stock.

Presidential Recommendations

Section 501(c) of the Act states that if the Government of South Africa has not made significant progress in ending the system of apartheid and establishing a nonracial democracy, the President shall include in this annual report recommendations on the imposition of additional measures from among the five listed in that sub-section.

The two sets of economic sanctions imposed against South Africa to date -- by Executive Order in 1985 and by statute in 1986 -- have sent a clear message to the ruling white community that the American people are outraged by the institutional injustice of apartheid and the basic denial of human rights that it embodies. Although the South African white leadership has reacted defiantly toward these measures, and has chilled the bilateral diplomatic relationship as a result, the message has clearly been registered. The American people have made their feelings clear.

Yet the most important goal of the Act was to pressure the South African Government to meet the unambiguous prescriptions laid out in the Act itself. As indicated above, significant progress has not been made toward ending the system of apartheid and establishing a nonracial democracy in South Africa in the twelve month period since the enactment of the Act.

I have reviewed the suggested additional measures listed in Section 501(c) in light of what we hope to achieve in South Africa as well as the impact of those measures already taken. My conclusion is that the imposition of additional economic sanctions at this time would not be helpful in the achievement of the objectives which Congress, the American people, and I share. While the measures imposed by the 1986 Act have registered an important message to the white South African community, and have contributed to our efforts to broaden our contacts with black opposition groups, the impact has been more negative than positive. I am particularly concerned by evidence that these measures have caused increasing unemployment for black South African workers, especially in such industries as sugar production and coal mining. While our sanctions have accentuated the overall economic stagnation in South Africa, it is clear to me that their impact on the government itself and its political choices have not advanced our goals. The ability of that country to evade sanctions by finding alternate markets for its exports indicates that it would be futile to impose additional measures that would also be harmful to United States strategic or economic interests. In addition, our sanctions measures have made it more difficult for the United States to persuade the South African Government to act responsibly on human rights issues, to move toward negotiations, and to restrain its behavior in the region. I believe that the imposition of additional measures, including those listed in Section 501(c), would exacerbate these negative developments without adding any additional positive benefits in support of our objectives. For these reasons, moreover, I continue to believe that punitive sanctions are not the best way to bring freedom to South Africa.

This experience has illustrated once again the very real constraints on the United States, or any other nation, that tries to impose its own solutions to South Africa's problems. It is clear that in the heat of debate over sanctions against South Africa, Americans on both sides of the issue overestimated the importance of the United States as a factor in the South African matrix. The impact of American sanctions to date has been significant neither in hastening the demise of racism in South Africa nor in punishing the South African Government.

What is needed on the part of the United States is a period of active and creative diplomacy bilaterally as well as in consultation with our allies and friends in Africa focusing on doing all that is possible to bring the peoples of South Africa together for meaningful negotiations leading to the building of a democratic society. The essence of this process is to state clearly what goals and values we in the West support, rather than simply to reiterate what we oppose.

This was the purpose of Secretary Shultz' public articulation on September 29th of the principles we believe must undergird a settlement of political grievances and the formation of a just, constitutional, and democratic order in South Africa. His statement delineates precisely the values that we in the West stand for and wish to see addressed by South Africans as they chart a future free of apartheid. It constitutes an attempt to challenge all parties in the equation with a positive vision of a post-apartheid South Africa, and to lend our moral weight to those many South Africans -- a majority, I believe -- who have not given up hope.

It is crucial in the coming period that we work with and, where possible, coordinate policies with our principal OECD partners. Aside from the question of the 1986 sanctions measures -- which few of our key allies have adopted -- our positions and policies are complementary with those of the OECD countries, particularly the United Kingdom, the Federal Republic of Germany, and Japan. We must work with these nations and others to buttress the Front Line States and the region against destabilization and economic decay. We must support and encourage those South Africans, white and black, that are already at work breaking down the barriers of fear, mistrust, and ignorance of each other. We must continue to strive together through public and private endeavors to assist the non-white communities in South Africa to prepare themselves for their rightful role after the inevitable end of apartheid. Most importantly, we must, together, push firmly for progress, change, and negotiation in South Africa, leading to a just and democratic future for that troubled nation.

Note: Identical letters were sent to Jim Wright, Speaker of the House of Representatives, and Claiborne Pell, chairman of the Senate Foreign Relations Committee. The letters were released by the Office of the Press Secretary on October 2.