The Politics of Economic Power in Southern Africa

by Ronald T. Libby

Overview

This book questions the notion that South Africa can exert effective political leverage over its economically dependent neighbors while itself remaining free of regional influences.

Originally published in 1987.

The Princeton Legacy Library uses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These editions preserve the original texts of these important books while presenting them in durable paperback and hardcover editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.

Product Details

ISBN-13:	9780691609461
Publisher:	Princeton University Press
Publication date:	07/14/2014
Series:	Princeton Legacy Library , #808
Pages:	388
Product dimensions:	6.10(w) x 9.10(h) x 1.00(d)

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The Politics of Economic Power in Southern Africa

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By Ronald T. Libby

PRINCETON UNIVERSITY PRESS

Copyright © 1987 Princeton University Press
All rights reserved.
ISBN: 978-0-691-07723-9

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CHAPTER 1

The Development of the Southern African Regional Economy

The formation of a Southern African regional economy with the industrial centers located in South Africa and Zimbabwe originated during the nineteenth century with the development of the mining industry. The enormous capital investment in the mining industry and its supporting infrastructure created transportation, communication, farming, commercial, and land use patterns that constitute the basis of the contemporary regional economy.

The Southern African regional economy has the characteristics of a classical, colonial economic relationship with Western industrial powers. Western countries provide the bulk of foreign investment in the area, furnishing technology and capital equipment, while the Southern African economy supplies Western countries with semiprocessed raw materials, agricultural products, ore, and precious metals and stones.

South Africa and Zimbabwe (potentially] are exceptions to this pattern, however, having formed their own manufacturing industries and secured markets for their products in the regional economy. These countries have thereby managed to establish an economic relationship with other countries in the regional economy comparable to that of the Western countries with RSA and Zimbabwe. South Africa and Zimbabwe (potentially) enjoy a trade surplus with other regional countries, while the latter run large deficits with RSA and Zimbabwe.

History

The discovery of diamonds and gold in South Africa transformed it from a white colonial settlement of only marginal importance in the British Empire to a regional center of mining industry. Table 1.1 illustrates the change in the Composition of South Africa's exports from being predominantly agricultural prior to 1880 to being dominated by the mining industry after 1884.

Both diamonds and gold were highly valued commodities that were dependent upon Western markets, especially the United States (the chief market for diamonds and after 1935 the fixer of the price of monetary gold). The effect of the mineral revolution in South Africa was to link its economy to that of Great Britain and other Western capitalist economies through the London capital market, which was the center of world finance during the nineteenth century.

The exploitation of South Africa's mineral wealth was made possible by large-scale capital investments — mostly from Great Britain. For example, between 1870 and 1936, Great Britain invested 92 percent of a total of £523,000,000 invested in South Africa and 85 percent of the total of £480,000 invested between 1946 and 1951 (Farnie 1956:127). Almost immediately after the mineral discoveries South Africa became the center of world production in diamonds, surpassing both India and Brazil. She also exceeded Russia in 1892 and America in 1894 in the production of gold, becoming the dominant world producer of gold in 1920, with 51 percent of total output.

From 1870 to 1900, South Africa functioned as an integral part of the British economy, becoming Britain's principal supplier of gold. Gold was particularly important to Great Britain since it was during this period that British economic supremacy was being challenged by the rise of Germany and the United States as industrial powers.

The flow of large-scale British capital to South Africa made possible major exports from Britain to its colony. During this period, Britain monopolized trade with South Africa; in the peak year of 1898, an estimated 97.5 percent of the country's exports went to Britain (Farnie 1956:133). This massive flow of capital had a profound impact upon Southern Africa, providing the material and financial basis for the formation of two powerful international economic interests based upon diamonds and gold. British financier-entrepreneurs such as Rhodes, Barnato, Robinson, and Beit gained a virtual monopoly over these industries with the help of legislative support from the South African colonial government and the Republic of the Transvaal (for example, through the diamond trade acts of the 1880s and the Transvaal Consolidated Gold Law of 1885).

The mineral discoveries in the interior of the region created an urgent demand for efficient and reliable regional transportation. The mines required machinery and goods from Europe, and this provided the impetus for a rapid expansion of railway construction, which began in 1876 (see Table 1.2). The Cape Provincial government financed railway lines linking the Kimberley mines with the ports of Cape Town, Port Elizabeth, and East London. The Witwatersrand (Rand) gold fields were opened in 1886, and the Transvaal government financed the construction of a railway line from the gold mines to Lourenço Marques (Maputo) in Mozambique. By 1897, the British South Africa Company (BSAC; a British chartered mining company with a monopoly over parts of Central and Eastern Africa) had constructed rail lines from Kimberley to Bulawayo (in Zimbabwe), by 1899, from Beira (in Mozambique) to Salisbury (Harare), and by 1934, between Bulawayo and Salisbury and Victoria Falls. The BSAC also financed rail lines linking Katanga (in Zaire) to the Northern Rhodesian Copperbelt (in Zambia) and to Salisbury and Bulawayo in 1909. The effect of this railway boom was to lay what is to the present day the basis of the region's transportation system.

The railway system also profoundly influenced European settlement patterns and urbanization in the region. The frontier of European settlement spread to Kimberley (in the Cape Province) first and then to the Witwatersrand in the Transvaal. This set in motion a process of regional urbanization at the ports, railheads, junctions, mining centers, and along the line-of-rail. Kimberley was the first industrial community in South Africa and the most populous settlement outside of Cape Town. In the twentieth century Johannesburg became the new mining center of South Africa and the center of finance and banking for the entire region.

Before 1900, few railway lines were constructed in Central or Southern Africa specifically to develop agriculture. Until then agricultural development in the region was essentially tied to the mining centers and to the line-of-rail for the purpose of exporting commodities overseas. For example, in the 1870s, a well-organized cattle industry was established in South West Africa (Namibia) and Rhodesia to supply beef to Kimberley and later to the Witwatersrand (Christopher 1976:122).Wool, mohair, ostrich feathers, and sugar emerged during this period as important export commodities because they could be farmed near the line-of-rail. Following the pattern set in Southern Africa, South West Africa's small railway system connects its two main ports with the mines and major towns. Its only interregional railway line runs to South Africa (see Map 1).

Sources of Energy

South Africa and Zimbabwe have a virtual monopoly of the currently worked coal deposits in the region. The first coal was mined in the Cape Province in 1864. This overlapped with the discovery of gold and the development of mining and secondary industry, and supplied the fuel needs for the railway and bunkering trade. It made South Africa the foremost producer of coal in Africa, with enormous reserves of 75,000 million tons.

Coal has played a vital role in the growth of South Africa's economy. An estimated 10 percent of its total annual output is used by South African Railways and secondary industries. The urban centers take about 35 percent of the total output, and Electricity Supply Commission (ESCOM) alone uses an estimated 55 percent of South Africa's internal coal consumption to generate electricity. In addition, an estimated 40 percent of South Africa's total petroleum requirements are met from Sasol oil-from-coal plants.

South Africa has also exported large quantities of coal to Japan, Israel, and Europe. The country's coal exports rose from 2.7 million tons in 1975 to 30 million tons in 1981, and they are expected to increase to 44 million tons by 1987. In this regard South Africa ranks alongside the United States and Poland as the major supplies of coal to the European community.

Although Zimbabwe produces only 10 percent of South Africa's total output, its coal production has also played a vital role in the industrial development of Central Africa. The Wankie (Hwange) area of southwest Zimbabwe possesses an estimated reserve of 5,000 million tons of coal of high-coking quality that is necessary for the iron and steel industry. Because the deposits are close to the surface, mining costs are among the cheapest in the world. The coal production in Wankie began in 1903 and grew with the development of the Copperbelt and the railways. Zimbabwean Railways transports ore and other bulk materials for the Copperbelt, requiring about 25 percent of Zimbabwe's coal output for fuel. The Wankie mines and industries take another 10 percent of the coal, with the remainder going to the Copperbelt and to iron and steel plants in Zimbabwe.

Zimbabwean coal has played a key role in the industrial development of the Zambian and Malawian economies as well. Prior to 1973, an estimated 70 percent of Zambia's fuel needs for locomotives, thermal power stations, and copper smelters came from Wankie. Malawi has imported Zimbabwe's coal in large amounts for its major thermal power plant in Blantyre. The Shaban copper mines and refinery plants in Zaire have also been taking an estimated 100,000 tons of coal and coke annually from Wankie.

Infrastructure and Settlement

The Rand cities in South Africa and the cities on the Copperbelt grew on the sites of mineral deposits and expanded with continuous production and demand. Thus Johannesburg and the Copperbelt towns of Zambia and Katanga (in Zaire) originated with the mineral discoveries there. Johannesburg eventually merged with other mining settlements to form, along with Cairo, the only other major conurbation in Africa, the Witwatersrand. The other center of economic wealth in the region is the Zambian-Katangan Copperbelt of Central Africa. These two areas are the focal points of regional infrastructure, including transportation, communication, power, industrial plants, and urbanization. An understanding of the role of these areas in the economic unification of Southern Africa is therefore important.

The Rand extends sixty miles from Randfontein to Springs in the Transvaal. Its location and growth are largely due to the discovery of gold fields, local supplies of coal and iron ore, water, the ease of constructing lines of communication on the veld (open grazing areas), cheap labor, and the availability of numerous other important industrial minerals such as fluorspar, fireclay, dolomite, chromite, and magnesite. Thirty-five percent of South Africa's industrial establishments (employing 43 percent of all industrial workers) are located on the Rand (Pritchard 1971:182). In 1982, it was estimated that the Southern Transvaal, which includes Witwatersrand, Pretoria, and Vereeniging (PWV), alone was responsible for 37 percent of the country's total gross geographic product (Hanekom 1982).

As the economic center of South Africa the Rand is linked to subordinate industrial concentrations in the country, all based near major port cities: Cape Town, the Eastern Cape centered at Port Elizabeth and East London, and the Durban-Pine town region of Natal. Most secondary industries in South Africa are also concentrated in these areas. For example, the PWV plus Durban, Cape Town, Port Elizabeth, Bloemfontein, East London, and Kimberley combined produce an estimated 60 percent of the total gross geographic product of South Africa (Nedbank Group, Ltd. 1983:203).

The Zambian-Katangan Copperbelt of Central Africa is a mining zone 280 miles long and 160 miles wide that produces 20 percent of the world's copper and 66 percent of its cobalt. These metals are among the most sought after by advanced industrial economies. The belt is a complex of mining towns extending from Lubumbashi northwest to Kolwezi in Zaire, to Ndola, and south to the Broken Hill district in Zambia. Each of the major mining areas has large towns and cities, residential areas, shopping centers, and commercial zones. In addition to copper, the belt contains 150 other mineral deposits, such as radium and uranium, lime, manganese, tin, zinc, coal and iron ore. Including Lubumbashi, the chief city of Katanga (now Shaba), and the secondary regional city, Jadotville, the CopperbeIt contains an urban population of over one million people.

With the exception of the port of Cape Town (which occupies a strategic position commanding ocean trade routes and functions as a naval base), port cities in the region have grown in their role as entrepôts for the hinterlands. Generally speaking, ports lie at a junction of sea and land routes and handle the produce of overseas territories and the produce from their own hinterlands. Because they are points through which exports and imports pass and become storehouses for raw materials, they often develop industries based upon these raw materials. Frequently they become regional capitals or route nodes for whole areas of countries. Map 1 shows the major ports in the region and the railway system that links the ports with the regional hinterlands.

Although the port of Cape Town serves South African and Zimbabwean traffic, its industry is based largely upon its own produce. Durban, on the other hand, serves as a regional capital and major entrepôt, having developed along with the growth of mineral production and agriculture in the Transvaal and Natal. Because of the bulkiness of the cargo they handle, Richards Bay and Durban import and export more than other South African ports. Their importance lies in the fact that they are entrepôts and collecting centers for the entire southeast of South Africa, which includes the Rand.

Maputo (formerly Lourenço Marques) developed as a port city in response to the growth of the vast Transvaal, Zimbabwe, Zambia, and southern Mozambican hinterland. The port handles Zambian copper, Swaziland ore, fruit and wool of the Transvaal, Zimbabwean tobacco and minerals, and Mozambique's cotton, sugar, cashew nuts, and copra. The port city has attracted a number of secondary industries and has major oil refinery and rubber processing plants. Its primary role of serving an international regional hinterland is evident in the fact that there is no railway connecting it with northern Mozambique, and until recently there were no good road connections with Beira, Mozambique's second major port.

Beira also developed primarily to serve a wide hinterland beyond the borders of Mozambique. With the completion of the railway line to Harare (formerly Salisbury) via Umtali and later to the Copperbelt, Beira became the natural outlet for Zambia and Zimbabwe's mineral ores and agricultural produce. However, since Beira's harbor was unable to handle the huge increase in post-World War II traffic, much of this trade was rediverted to Maputo.

Towns and cities tend to form at the focal points of regional transportation routes. Bulawayo in Zimbabwe is a good example of this, having developed from a small settlement in 1893 to the second largest city in the country next to Harare. Its rapid growth began when the South African Railway reached the town and constructed extensions beyond it to Salisbury and Beira, Wankie, Livingstone and Lusaka, the Copperbelt, and Lubumbashi. This placed Bulawayo at a strategic junction of major routes. Principal roads converge on Bulawayo from Beit Bridge on the South African border and from Umtali and Beira (in Mozambique), Ndola (in Zambia), and Lubumbashi (in Zaire). This has made Bulawayo the natural headquarters for Zimbabwean Railways and an ideal place to locate factories, iron and steel plants, and assembly plants.

Before 1950, the region's road system was based upon the railways that linked the major commercial centers with the ports. Postwar expansion of agricultural production led to the development of feeder roads in the main commercial agricultural areas leading to the main railheads. Hence the main flow of road traffic is from the interior to the coast rather than between countries. The only inter-country route that can be classified as long distance but that does not intersect industrial centers is between Zambia, Malawi, and Tanzania.

Air transport in the region underwent a major expansion after World War II due to the growing use of air traffic for the transport of perishable exports and for the moving of supplies such as food to various regions of a country. The air transport system, however, paralleled the existing rail and road systems by connecting the major hinterland towns and cities with the ports. Until recently almost all interregional flights originated in Johannesburg, Harare, and Windhoek (in Namibia). A similar pattern obtained with respect to regional mail, telephone, and radio broadcasting flows, which tend to be concentrated in the Rand, on the Copperbelt, and at the ports (see Map 2).

(Continues...)

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Excerpted from The Politics of Economic Power in Southern Africa by Ronald T. Libby. Copyright © 1987 Princeton University Press. Excerpted by permission of PRINCETON UNIVERSITY PRESS.
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Table of Contents

• FrontMatter, pg. i
• CONTENTS, pg. vii
• LIST OF MAPS, pg. ix
• LIST OF TABLES, pg. xi
• FOREWORD, pg. xiii
• PREFACE, pg. xvii
• LIST OF ABBREVIATIONS, pg. xxiii
• INTRODUCTION, pg. 1
• CHAPTER ONE. The Development of the Southern African Regional Economy, pg. 19
• CHAPTER TWO. State Strategies and Political Division: South Africa and Zimbabwe, pg. 62
• CHAPTER THREE. Urban Threat and Defensive State Strategies: Botswana, Lesotho, and Swaziland, pg. 109
• CHAPTER FOUR. Bolstering State Power through Regional Inputs: Malawi, Mozambique, and Zambia, pg. 181
• CHAPTER FIVE. Marginal State Involvement in the Regional Economy: Tanzania and Zaire, pg. 246
• CHAPTER SIX. Namibia's Preindependence Transitional Mode of Involvement, pg. 280
• CONCLUSION, pg. 313
• BIBLIOGRAPHY, pg. 329
• INDEX, pg. 355