World Bank Document

Report No. 1688-EA nnni It Mieration from Botswana, rILc bur i Lesotho and S~'VAaZiand Public Disclosure Authorized February 21, 1978 Country Programs Department I Eastern Africa Regional Office FOR OFFICIAL USE ONLY Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of the World Bank This document has a restricted distrikbtion ann may be used by recipients only in the performance of their official duties. Its contents may not LIoftews beAdiosACOed witFhoutF Worldl Bank authorization CURRENCY EQUIVALENTS Lesotho, Swaziland, and the Republic of South Africa Currency Unit - Rand (R) US$1 - R 0.87 R I - US$1.15 R 1 million - US$1,150,000 Botswana I/ Currency Unit - Pula $1 - P 0.83 P1 - US$1.20 Swaziland 2/ Currency Unit - lilangeni (plural - emalangeni) ABBREVIATIONS BLS - Botswana, Lesotho and Swaziland ILO - International Labor Office MLO - Mine Labor Organization NRC - Native Recruiting Corporation RSA - Republic of South Africa WENELA - Witwatersrand Native Labor Association 1/ Botswana introduced an independent monetary system in August 1976; the Pula exchanged at par with the ranrd until May 1977 when it was revalued in effect by 5 percent. 2/ Swaziland issued its own currency in 1974 but the rand remains legal tender with the iilangeni. This report is based on the findings of a mission in September i9i7 to Botswana, Lesotho and Swaziland; the mission was composed of Messrs. Callie Boucher and Walter Elkan (consultant). Messrs. Francis Wilson and Dudley Horner were consultants to the mission and also contributed to the report. FOR OFFICIAL USE ONLY MIGRATION FROM BOTSWANA, LESOTHO AND SWAZILAND Table of Contents Page No. SUMMARY AND CONCLUSIONS i -v I. INTRODUCTION ............................................ I II. NATURE A-ND EXTENT OF MIGRA-NT LABOR ...................... 3 Labor Migration Elsewhere ..... ............ 3 Circtilar Migration .............................. 4 Extent of Migration ..... ................ 4 III. POPULATION AND ECONOMIC ENVIRONMENT .... ............ 6 Population ....... .................. 6 The South African Economy ..... ............ 7 Economic Growth in the BLS Countries ............... 7 IV. EMPLOYMENT, WAGES AND FARM INCOMES .... ................... 11 Employment ....... ... ..... ............ ............ 1.1. Wages ........ ............... ....................... 12 Farm Incomes ...... ................................. 14 V. THE ORGANIZATION OF RECRUITMENT ......................... 17 The Legal Framework ................................ 17 Country Agreements with the Republic of South Africa 18 The Selection Process .............................. 20 The Deferred Pay System ............................ 20 VI. FOREIGN MIGRANTS IN THE REPUBLIC OF SOUTH AFRICA ........ 23 Mobility ....... .............. ...................... 23 Labor Relations ................ .. .................. 24 Wage Determination ................................. Employment .................... ..................... 25 Impact of Foreign Migrants on Agriculture & Mining 26 VII. RECENT DEVELOPMENTS AFFECTING EMPLOYMENT AND EARNINGS ... 30 Mining ...................................... 30 Alternative Sources ......................... 32 Consequences of Change ............................. 34 VIii. THE IMPACT OF MIGRATION ON THE SENDING COUNTRIES .... .... 38 Return Flows ....................................... 38 Agriculture ........................................ 4 Education and Skills ............................... 41 Bias in Pattern of Development ..................... 42 IX. TOWARDS A COORDINATED MIGRATION POLICY .................. 43 The Case for a More Comprehensive Policy .... ....... 43 Policy Proposals ................................... 44 Further Research ................................... 48 STATISTICAL APPENDIX MAP This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. SUMMAR! AND CuNCLUSIONS i. Migration in southern Africa has been a significant economic process for nearly a century; currently, most migrant workers are employed in the Republic of South Africa, mainly in mining, but large numbers also seek work in agriculture and services. Traditionally, the main sending countries have been Botswana, Lesotho, Malawi, Mozambique, and Swaziland. The distinctive feature of migration to South Africa is its temporary nature (between 9 to 18 months at a time) and its close interrelationship with the pattern of subsistence production in the sending countries. Since the early days of organized migration, the mining authorities established a network of recruiting agencies in the sending countries in order to ensure an adequate and steady supply of labor to the mines; this system of foreign labor recruitment has remained essentially unchanged, and has provided at times as much as 80 percent of the total labor requirements of the mining industry. ii. The cause and sustained flow of this migration derive in part from the integration of the economies in the southern Africa region and polariza- tion of development within South Africa. The exploitation of South Africa's vast mineral wealth (diamonds, gold) through substantial inflows of capital, skills and technology, created a dominant industrial economy to which the largely subsistence economies of Botswana, Lesotho and Swaziland became closely linked; in particular, through trade, a common currency, banking and financial institutions, tourism, as well as by transportation because of their landlocked positions. iii. Economic conditions in the sending countries themselves nrovide a strong motivation for continuing migration. These include low and uncertain incomes. Darticularlv from cron nrodtiction: low agricultural nrodtietivitv characterized by extreme soil erosion in Lesotho, and erratic rainfall in Botswana; and lack of adequate domestir emnlnyment at wages comparable to those in South Africa. In addition, South Africa's rapid economic growth since World War II strengthened the demand for foreign migrant labor as employment in non-mining sectors became available to increasing numbers of black Sniith Africans at higher w:lPR :nd iindrr hatter workino rnnditinnQ than thnos in mining. More recently, migration from Botswana, Lesotho and Swaziland has increased significantly following the substantial rise in t-he minimtum wage per shift for an underground miner, from R 0.72 in 1972 to R 2.50 in 1976. iv. The ready availability of foreign labor whose wages are unilaterally determined bDy the min-ing authorites, maAe possible a lower level1 ofwae L.11 U11L1 LQ1L_ XLL.&& iauLu = -LUW=J. -CVCJ.. UL a =. than could otherwise be paid if South Africa had to rely completely on its ownonLUL labor uI0NL markret. 1.Vt:L1L'e thugLLIUUILt U.0LLZ-blacI--I waeCt,- LICLU-re-- OULUI=LiLLIV_soetme --- beenUCt=n. noinallyHrteynoinll duced in order to sustain the viability of the gold mines and real wages had hardly risen, between 1911 and 1969, the sending countries depended on migration to provide employment and supplement household incomes, particularly of the rural population. In Botswana, up until i972, the number or migrants in South Africa was almost equal to total domestic wage employment in Botswana itself; and in Lesotho, where the extent of migration is unique among labor exporting countries, about one half the male labor force is employed in South Africa. Swaziland is least dependent on migration because of its more diver- sified economy and sustained economic growth. v. Recruiting requirements witn the sen counties are in line with the relevant ILO conventions relating to contracts of service and sys- tems of foreign labor recruitment, and are administered by country labor commissioners who validate the contracts of service between the employers and workers. Botswana, Lesotho and Dwaziland have also concluded bilateral agreements with South Africa providing for individual country representatives there to lialse with their migrant populations. One of the main features of these contractual arrangements is the deferred pay system under which a proportion of migrants earnings is systematically deducted as forced savings, and made available at the end of the contract period. In Lesotho, where this system has been compulsory since i975, 60 percent of migrants' earnings are repatriated to the Lesotho National Bank. These accumulated funds are becom- ing increasingly important in the GovernmentCs effort to mobilize domestic resources, and as a potential source of development finance; net remittances are estimated to be almost equivalent to the country s gross domestic product. vi. The migration process, when viewed from the demand side, is closely integrated with a labor market which functions within a legislative and ad- ministrative framework determined by South Africa's doctrine of apartheid or separate development. The effect of this policy has been to regulate the training and mobility of the labor force, and to create along racial lines two largely separate and non-competitive labor markets; foreign migrants from Botswana, Lesotho and Swaziland form a natural segment of the black labor force. Mainly because of legislation, restrictive practices of white trade unions, and the lack of adequate educational and training opportunities, the maiority of Africans remain unequipped for skilled work, and, relative to white workers, without any effective labor organization which could influence

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