ECONOMICS AND APARTHEID LABOUR SHORTAGE WILL TEST “JOB RESERVATION POLICIES

Press, Volume CIV, Issue 30643, 8 January 1965, Page 8

ECONOMICS AND APARTHEID LABOUR SHORTAGE WILL TEST “JOB RESERVATION POLICIES

■ IBy “Lynccus” of the "Economist"! (From the "Economist" Intelligence Unit)

Politicians may propose but it is economic reality that disposes. There are signs that this old thesis will hold good for South Africa much more in the future than in the past. The republic’s first economic plan has made its debut; it points in effect to a slackening of industrial apartheid.

The most important single fact jn the complete document, officially known as the Economic Development Programme. is the growth target of 54 per cent a year. This is way above the British, German and French targets and all three of these countries are having difficulties in hitting their more modest objectives. Three Targets Actually the South African planners examined three different targets. They looked first at 41 per cent, which is close to the growth rate of the South African economy over the last 30 years. But they found that this would be too easy and would not employ South Africa’s resources to the full. It would have led to an increase of something like 60,000 in the total of unemployed labour in the period covered by the plan, 1964-69. It would also have boosted the republic’s gold and foreign reserves to around R7OO million (£350 million) by the end of the period. The planners found that 6 per cent on the other hand would put too much strain on the balance of payments and also make worse South Africa’s most serious problem —that of labour supply. So they have plumped for a compromise figure, although it has been fixed much nearer 6 per cent than 4| and this suggests that the Department of Planning is confident that its target can be achieved. It would involve a drop of about RllB million (£59 million) in the gold and foreign reserves by 1969. The growth target has yet to be approved by Prime Minister, Dr. Verwoerd, and his cabinet but, since the Government has allowed the plan to be published in fairly full detail, it is hardly likely that it will fail to support the proposals of the planners. The crucial question mark in the planning projections hangs over labour supply and this brings sharply back into the picture the South African Government’s whole policy of apartheid and complete separation of white skins from black.

White And Non-W T hites The official policy of Dr. Verwoerd’s Government is that every white person in South Africa should have a job and to achieve this policy they have not only a racial colour bar but also an economic one—“job reservation” with most skilled jobs being open only to whites. In making their calculations the planners have broken down the estimated demand for labour between whites and nonwhites. On their assumption

of a 5j per cent growth rate there should be a drop in the number of unemployed from 329,000 in 1963 to 191,000 in 1969. But this overall figure understates unemployment among non-whites by 47,000 which is the estimated number of “white” vacancies by 1969.

homelands and border areas. But it seems doubtful whether this will go far in solving the problem for the types of industries suitable for such areas are not primarily those suffering from the acute shortage of labour. Erosion In Colour-bar Unless the South African Government can jack up its immigration rate it will have to allow non-whites to do more and more advanced work and in the places and industry where more skilled labour is urgently needed. Already the private sector of the South African economy has recognised that “job reservation” cannot now be taken too seriously. In many industries government regulations are not being completely adhered to: otherwise numerous factories would grind to a halt. Even in the public sector there has been some erosion in this economic colour bar. In parts of the republic Africans are now employed as shunters after the railways had failed to recruit enough Europeans for the job. It seems that this erosion will have to be at a much faster pace than in the past if the necessary industrial growth is to be achieved and it makes even more impracticable and incomprehensible the dreams of those Afrikaaners who still want a complete separation of the two races. The economic impracticability of apartheid has always been its main stumbling block, although its adherents have refused to recognise this. Will they be able to go on doing so?

The planners have understandably erred on the side of caution in making these estimates since they are based on an assumed net white immigrant rate of 20,000 a year, which is only about half the current rate of immigration. However, in the last two or three years this rate has been inflated by whites moving further south from other parts of Africa, particularly from the many newly independent African states. It seems that the planners have assumed that most of those who are likely to travel across the Limpopo have already done so and that the bulk of the new immigrants will be coming from outride Africa. The planners recognise that some sectors of the South African economy are already facing serious shortages of labour and that if the growth rates set down for such industries as building, motors and engineering are to be achieved they will need considerable additional white labour. To get over these labour bottlenecks, it is suggested that more opportunities should be given to non whites to undertake more skilled and advanced work although only in restricted areas such as the African