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 polarization 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 diversified 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 becoming 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 administrative 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 their wages and working conditions. In recent years, the severe shortage of skilled whites in several sectors of the economy has led to the removal of some restrictions to African training which could become one of the critical factors in South Africa's future economic growth; by partly ensuring an adenuate sunnlv of skilled manpower for its highly industrialized economy, and by creating the purchasing power potential from rising incomes of a large and skilled labor force. vil. Labor shortaoes in the mining sector have often been met by increasing foreign recruitment; this access to migrant labor was not generally available to the non-mining sectors. The main effects of this nolicv were not only to sharpen the wage differential between the mining and non-mining sectors, but also between black and wh4te in4g th mining sector itself. For example, over the 1935-70 period, while the average wage of a white worker in manucacturing reumaned at about six times that of a black worker, in mining, the average white wage increased from 12 to 20 times that of the average blac'k- wage. At the same time, migration particularly from Malawi, increased from less than 2 percent to 20 percent of total mine employment. Although restrictions on sKills training and tLe asence of black traude unions have influenced the level of mine wages, the 'unlimited' supply of foreign labor has had a significant impact on the traditional low wage structure of the mining sector. viii. Towards the end of the 1960s, prospects for an increase in black mine wages became closely linked to a rise in the gold price following the separation of the official and private gold markets, and the 1971 Smithsonian Agreement under which the US dollar was devalued for the first time in 40 years. By the end of 1974, the price of gold on private markets had reached an all-time peak of US$197.50 per ounce in contrast to the fixed official price of US$35.00 ner ounce which had nrpvailed for nver 30 vyars. In addition, a number of events combined to strengthen the case for an increase in black mine wage: a rnntinuiing decline in the recruitment of local South Africans; the Malawian Government's decision to withdraw its workers (follow- inga plane disaster in which 74 Malawian migrants were killed) who accounted for about 27 percent of foreign migrant labor; the increasing number of disturbances on the compounds; the amverse publicity abroad to the l wages in South Africa; and future uncertainty about the traditional labor supply from Mozamulbique whfich provided abiout 28 percent of foreign migrant labor, andu which was soon to achieve political independence. These factors underscored the cri4tical reliance of the mining i-ndUustry on fLoreiLgn 'labUor, the possibL e instability of labor supply, and the need to improve the competitiveness of miInin[Ig reLatiLve to othIer sectors of thLe econo-my. Between 197U anu 1974, Liie nominal minimum wage of black workers increased fourfold; at the same time, the mining autnorities stepped up recruitment from other traditional sources (Botswana, Lesotho and Swaziland), introduced Rhodesia (Zimbabwe) as a new source of supply, and launched an aggressive campaign to increase recruitment of black South African workers. These measures proved successful, and an adequate supply of black mine labor was soon restored, while the industry embarked on a long-term research and development program to accelerate the mechanization of gold and coal mines. ix. Any analysis of the effects of migration on the sending countries is likely to be controversial, particularly in assessing their development implications. Migrants' remittances have increased the incomes of a large segment of the population of the BLS countries. This positive impact has to be set against the social costs of migration. These include the recurring dislocation of family life, health and occupational effects of mining employment, and foregone educational opportunities for children who, in the absence of adults, must engage in agricultural production and livestock rearing. At the national level, while migration enhances employment and foreign exchange earnings, it adversely affects long-term development policies. For example, implementation of income and employment policies is hampered by the continuing upward pressure on domestic wages because of higher wages in mining, and investment in education and training must be periodically assessed against the drain of able-bodied males required for domestic development. Also, the formulation of government policies in rural development calls for a better understanding of the relationship between migration and agricultural productivity, particularly in Lesotho which was once a net exporter of food. Given the recurring absence of males, research should be concentrated on migrant household decisions relating to cultivation, choice of crops, division of labor, investment, output and household savings. - iv - x. It is difficuit to assess tne future demana for foreign migrant labor in view of the range and nature of events which have influenced the demand/supply situation particularly in gold mining over the years. While the industry is committed to greater mechanization, assessments differ re- garding the extent to which alternative techniques could be developed to reduce labor substantially, given the special geological features of the ore body, such as hard, narrow, discontinuous reefs two miles deep. However, while there is limited feasibility for varying production techniques of operational mines in response to changing relative prices of labor and capital, new mines are expected to be increasingly capital-intensive. Other factors influencing future demand include the pace of local substitution of foreign migrants, the future role of gold in the international economy, the rate of economic growth in the sending countries, and political considerations stem- ming from current developments in southern Africa. xi. As the BLS countries improve their development planning machinery, they have begun giving greater attention to migration in their development strategies; in this regard, a strong case exists for a regional migration policy. The absence of such an approach is a notable feature of international relations among the labor exporting countries of southern Africa; this stands in contrast to the establishment of the first employers' organization in 1889. Since independence in the 1960s, the BLS countries have successfully negotiated with South Africa increased benefits under the southern Africa Customs Union; in 1975/76, receipts from this source ranged from about 30 percent to 50 percent of Government revenues. These arrangements established the principle of compensation to the less developed members for the economic disadvantages of partnership with a highly industrialized country; in particular, the loss of fiscal discretion in tariff policy designed primarily to serve the interests of the dominant economy. This principle of compensation might hp Pniiallv tranRfprnhle to trade in 'labor'. and governments might wish to consider the possibility for negotiation along similar lines. xii. The BLS countries and other labor exporting countries have contributed substantiall- to South A.fric-a's economnic developnment. Whore- nolicy1 calls for continuing migration, Governments might consider ways in which it 1 4 could A cnce AleA AtmeC,4- n Adxometidello Wi1mnt 4 thO appnrtoah tn this C0 t 4e;iv would be determined largely by political considerations, the following steps are indiJcative:(1i) fGtovernments soUIAd estzblisb, probably at the offic.ial level, a committee for regular exchange of information on migration; (ii) such an LinLter-country committee couLdU eventually condu.t co-ordinatd nego- tations with the mining authorities on the terms of migrant labor including uniform fees, tax and deferred pay arrangemenits, andU improved sic'Kness, disa- bility, and death benefits for miners and their families; (iii) negotiations should further explore the possiDiiity of direct financial transfers based on mining industry profits or from mining taxes which presently exceed the combined gross domestic products of the BLS countries; and (iv) a review or regional industrialization policy within the framework of the southern Africa Customs Union should focus on the feasibility of producing within the lend- ing countries, commodities directly consumed by the mining industry. xiii. Efforts to foster a regional approach to migration and to enhance i.ts contriLbutiLor. to domestic dUeve'lopment should blueaccompanied lUy an ongoing program of policy-oriented research; a number of studies on regional migration are presently beingcarried out with international assistance. In addition, it is likely that an Institute of Labor Studies will soon be established in Lesotho; this project deserves international support as it would localize regional research on migration on a continuing basis. This report outlines some of the country issues on which research should focus to improve migration policy.

CHAPTER I. INTRODUCTION

1. This report is concerned with labor migration to the Republic of South Africa. nrincipallv but not excrlusivelv. from Botswana. Lesotho and Swaziland (BLS). Where necessary, reference is made to migration from st-her nonntirnries, nprt-iv'iiIrlv Mnlnwi and Mozambiquie (and more recently Rhodesia), for many years important sources of labor to South Africa. The report, which iQ a f4rst- sta towards further work on migrstion in ouithern Africa, tries to assess the extent and nature of migration from these countries, describes the legal and institutior.al arrangements under which it takcs place, and examines some of the economic consequences for the sending coun- tCries~ . Thereport&L1~ L=jJ%JJL L. LLt0a LC---- L~L IJL----- UWjJ L.=U-rmpe jJpartl GIL. ±)' byU.Y' conr_ UL¶JIL.- )' Y J.Llinterest L.= QL IJybyU, llmiteA6 Bank Group knowledge of migration as a significant economic process in member cou,.tries of the southern AfLr'Lca regiLon, and I-teipiaioswihmga tion has for development-policies, particularly in Lesotho where the migrant laboU s'LudLatIIon Liscritical, with onlie-ihJa'lf' of' the male labor force employed in South Africa.

2. The modern system of migration began after the discovery in South Africa of vast deposits of minerals (diamonds and goid) during the iatter hali of the 19th century. The economy was still predominantly agricultural, with wool the major commodity. The exploitation of gold, unlike the surface operations of diamond mining, required deep-level mining which necessitated large- scale organization ot capital and technology. The combination of demand for labor in large quantities created by the mining revolution, and intense competition among mining companies, led to a system of 'group control of mining enterprises 1/ and the establishment of a central mining agency, the Witwatersrand Chamber of Mines in 1889.

3. During the early period of organized migration two important and inter-related measures were introduced to secure an adequate supply of labor to the mining industry; they have had far-reaching economic and social consequences for the evolution of modern South Africa. First, the Government imposed taxes on non-mining employment, and restricted the movement of Africans into urban areas. Secondly, the mining industry established two separate organizations specifically to recruit labor. One, the Native Recruiting Corporation (NRC) was to recruit within southern Africa and the British 'Protectorates' as they then were (Botswana, Lesotho and Swaziland), whilst the other, the Witwatersrand Native Labor Association (WENELA) was to recruit workers from outside this labor catchment area, mainly from Mozambique, and later from Malawi and Rhodesia,. 2/ The operation of these institutions eliminated open competition in recruitment, and stabilized and even reduced labor costs. This pattern of foreign recruitment has remained essentially unchanged, and has at times accounted for the supply of as much as 80 percent of the total labor requirements of the mining industry.

1/ A system under which a finance house controlled a group of mining companies.

2/ Sincp 1976; NRC and WENELA have been combined into one agency. -2-

4. Currently, migration organized by these recruiting organizations, recently combined into the Mine Labor Organization (MLO), 1/ takes place principally from Botswana, Lesotho, Mozambique and Swaziland and in very recent times from Rhodesia; the Malawi Government suspended recruitment in 1974. Recruiting through an agency is mostly for employment in the mines, but large numbers of workers from the sending countries also migrate in search of work in agriculture; some of them through smaller recruitin_ organizations, but many make their own way, sometimes illegally.

5. In contrast to the historical links which exist in trade, 2/ there has hben little rpeional coonprationn on mntters relating to migration; all official agreements between sending countries and South Africa are on a bilateral hbais Tnfnrmation on the migration nrnocep is scanty Pvpn within the administrations of sending countries themselves, and it appears that no atte-mts have bee.n made to assess the econromic effects of migratinn nn a periodic basis. However, in recent years, sending countries have recognized that migration should be given more serious consideration in the formulation of development policies, and that policy-oriented research is required on an ongoing bas4s.

11 Recently renamed The Employment Bureau of Africa (TEBA).

2/ In 1910, the Southern Africa Customs Union between South Africa, Botswana, Lesotho and Swaziland was established. - 3 -

CHAPTER II. NATURE AND EXTENT OF MIGRANT LABOR

6. Relatively poor countries situated on South Africa's periphery have provided a highly elastiC. supply of la-or at lower wages than those which would normally have been paid if South Africa had been obliged to rely completely Uo iLLOsWLE UoUwnoL.Le laUL IrL -rkL. SinceLte sUpply JJiLe oL labor is a function of its alternative opportunity, the sustained flow of ilabor iLnto South Africa 'L anU indication o0f thle extent to wnicn these wages constituted the most remunerative work opportunity for large numbers in the peripheral countries. A once prevalent view was that Arrican men go to work in South Africa because a spell of work on the mines has replaced tribal warfare as an initiation rite or passage to adulthood. If this were tenable, many young men could be expected to go to the mines only once or twice in their working lives. All the evidence, however, indicates that the majority return to work in South Africa time and again, and that very young men are a minority of the total stream of migrants. It is obvious, therefore, that the motive of labor migration is primarily economic, although migration itself might still retain a social importance particularly in some rural societies.

Labor Migration Elsewhere

7. One-way migration from country to town occurs everywhere, but circular or oscillating migration across international boundaries which is so marked a feature of southern Africa is also found in many other parts of the world. For example, in Western Africa, Western Europe, North America and South America, the movement of workers from a rural base to jobs in other countries is common: cocoa pickers from the Upper Volta to the Ghana coast; Turkish workers building American cars in Cologne; Senegalese farmers cleaning the streets of Paris; Mexicans swimming across the Rio Grande to swell the vast army of illegal workers in the USA; Bolivians cutting sugarcane in Argentina.

8. Despite the similarities, however, there are some significant differences in degree, if not in kind, between labor migration in southern Africa and that found elsewhere; differences both in terms of the length of time that the process of oscillating migration has continued, as well as the proportion which migrants represent of the economically active population of the sending countries. Thus, for example, the migration of Turks to Germany or Algerians to France developed since the Second World War. In southern Africa, on the other hand, the oscillating migrations from Botswana, Lesotho, Swaziland. Mozambique and Malawi date prior to the First World War. and economic growth which has taken place primarily within South Africa has always drawn on temnorarv' labor from far beyond the national boiindaries. Moreover, migrants from Lesotho, for example, constitute about 55 percent of the malp noniiuation of th. conuntry, whereas migrannt fre-m c-nuintriec in nther areas of the world generally form a much smaller proportion of their national 1n n ef1^ A _.A -4-

Circui,qr Mi1yrqtic9n

9. The most distinrtive feature of black labor migration in southern Africa is that it is purely temporary; hardly ever for more than two years at a time, and generally for much shorter periods (currently an aierage of nine months) but migrants will make these trips several times in the course of their working lives. A number of factors account for this circular or oscillating pattern of migration; the most important being that the South Afr4can lovernm.ent limits suc-h migrant employu.ent CL -L£L If SJVLIt iL ~L.LUL-LLZ OUklI UiiL_giCiL UWP_LUyUL~1RLLL L_UILLLcontracts .C LL: toLU LUUL-o LUULmore U th-anLIll two years at a time. In addition, there is no family accommodation; men Live TnuailLy Ln traditionaUl compound4 each of whieh houses several thoubsands; but plans for hostel accommodation are gradually being implemented. Migrants, particularly tilose witn families, may also be exercising tne option to maximize family income (defined as income from wage employment plus farm production, wnether it be a cash crop or food grown for home consumption) while maintaining some subsistence production and thus preserving land rights. Prior to i963 when entry from Botswana, Lesotho and Swaziland was little controlled, some migrants settled in South Africa. However, even if South Africa per- mitted some degree of permanent settlement and accommodation near the migrants' place of work, it could not be assumed that large numbers of men would necessarily bring their families with them, given the importance of the traditional farm household in the socio-economic life of the sending countries, as well as the restrictive environment of life in South Africa itself.

Extent of Migration

10. Over time, the total numbers of workers supplied to the economy of South Africa and the sources from which they are derived have changed significantly. Table 1 gives a broad indication of these magnitudes and changes over the last half century. The data relate only to those officially recruited by the Chamber of Mines and are, therefore, grossly underestimated. The actual numbers working in South Africa would have been greater in each respective period, but reliable estimates of (other than for those officially recruited) total migration during this early period are difficult to obtain. The table shows a large increase in employment, particularly between the turn of the century and the mid-1930s as well as the importance of Mozambique as the major source of migrant labor during the early period of organized migration; also, the rising proportion sent by the BLS countries (especially Lesotho) and the countries North of Latitude 22 (particularly Malawi). More recent develoDments concerning the numbers and sources of migrant workers are discussed in Chapter VII. " 5 -

Table 1 GEOGRAPPTC. SOURCES OF BLACK LABOR EMPLOYED BY THE CHAMBER OF MINES

1896-8 1936 1972

South Africa

Transvaala.1.a7.0 2 1.8 Natal & Zululand 1.0 4.9 1.2 Cape - 39.2 17.7 Orange Free State - 1.1 1.6

Sub-total 24.4 52.2 22.3

BLS countries

Botswana 3.9 2.3 5.2 Lesotho 11.1 14.5 18.5 Swaziland - 2.2 1.4

Sub-total 15.0 19.0 25.1

Mozambique 60.2 27.8 21.4

North of Latitude 22 (mainly Malawi) 0.5 1.1 32.2

TOTAL % 100% 100% 100%

TOTAL 54,000 318,000 414,000

Source: Wilson, Francis, Migrant Labour in South Africa, The South African Council of Churches, Johannesburg, 1972. -6-

C-HAPTER llI. POPULATION AN-D ECONOMIC ENVIRONMENT

Population

11. Between 1911 and 1974, the population of South Africa increased from some 6 million to about 25 million (of which Africans comprised about 70 percent), while that of the BLS countries grew from 0.6 million to nearly 2.5 million; population growth in the region ranged from 2.0 to 3.0 per year during the last decade (Table 2). In South Africa, 80 percent of the non- African population live in urban areas. Government policy provides for nine Bantustans for the African population, but only about 46 percent currently live there; the rest live and work on white-owned farms, and in the main urban and industrial centers.

12. The population of the BLS countries, with which this study is principally concerned, lives mostly in rural areas; only in recent years has there been some trend towards urbanization, particularly in Botswana where 15 percent of the population now live in urban areas; in Swaziland, 8 percent and in Lesotho, only 3 percent. In Botswana, urbanization was initially spurred by the development of its new capital, Gaborone, but since the late 1960s, mineral development has led to rapid urban growth, currently estimated at about 15 percent a year. In Swaziland, people have recently begun to move to towns but since the few large-scale concerns in both agriculture and industry are geographically dispersed, there is as yet no serious urban concentration. In Lesotho. there are neither agricultural estates nor large minps or industries and the only urban area of any size is Maseru, its capital.

Table 2: POPULATTON OF RSA AND MAIN SFND)TING~GOUNTRIES (000)

1960-74 1M11 1936 io96 1071. ( Rr L\ ______~ j - CLLLLUC&. rL Uw LL[

South Africa 5,973 9,588 16,450 24,940 2.7

Botswana 125, 266c rn2 6v41. LL..-uu JUI 0J

Le;>Vth. 0U Lesotho 404~~~1U'in/ 562 8780 1,191lll 2.2.

Cwazi'an; 157 3i6 478 3.0

M1alaw 970 1,603 /a 3,462 4,958 2.6

MozamDique n.a. 5,086 lb 6,806 9,030 2.0

/a 1931 /b 1940.

Source: Country population censuses and World Bank Atlas, 1976. -7-

The South African Economy

13. South Africa has been the magnet of migration from the BLS countries and beyond, especially since the major discoveries of gold and diamonds during the second half of the 19th century transformed a patriarchal subsistence economy into one of the major investment areas of the western world. It is well endowed with most of the economically imDortant minerals. The lack of oil is partly compensated by vast deposits of coal which is the major source of the country's fuel and nower: only about a quarter of nower renuiremenrs is met from imported oil. In addition, the country's oil-from-coal technology is among the most advanced. and i8 rnmmprrinllv epnlnitctd; the export potential of coal has been significantly enhanced since the energy rrisis= Suith Africa has become a major mining country, and besides coal, diamonds and gold, of which the country has the world's largest known de- ponsits, there are large deposits of otherr minerals, including platinum (of which it is the world's largest producer), chrome, manganese, uranium, iron ore, copper and zinc.

14. 'The country's susta4ned4 growtbh hLas been lase' on the exploitation ~LLL.SJILLJ 0 0f0& IJW L 110 U u1 u00 U s. L1L _ADLP.A ~L . LI of its vast mineral wealth, and was accompanied by substantial inflows of capital, skills ariU technology. Al't hough mining remdiL1s thie maListay of the economy, the economic structure is well diversified. The country is virtually __ar~~~ _ J _ - _..1 _ __ -______n ___ self-sufficient in iUou au iLs aUso a major exporter OI agricu'Ltural products. The manufacturing sector covers the full industrial spectrum and since 1960, has replaced mining as the largest contributor, about 24 percent, to the domestic product (Appendix Table 3.1); the contribution of agriculture has fdilen steadily and is now less than 10 percent. Current GDP growth is about 2.2 percent a year, compared to 5.0 percent during the past decade, mainly on account of the economic recession since 1975; and GNP per capita was estimated at about $1,200 in 1974. 1/

Economic Growth in the BLS Countries

15. Prior to independence in 1966, there had been little economic growth in Botswana and Lesotho. In fact, the economy of Lesotho had remained virtually stagnant for more than a decade. The economies are all characterized by the dominance of subsistence agriculture, which directly supports about half the population in Swaziland and over 80 percent in Botswana and Lesotho; much of agricultural production is for self-consumption. Agriculture, including subsistence production, contributes between 30 percent and 47 percent of the domestic products. Swaziland is well endowed with water, fertile soil and a favorable climate; these support modern large-scale agricultural enterprises such as forestry, sugar, and fruit, and offer considerable potential for a more diversified production. In Botswana and Lesotho, however, subsistence agriculture is carried out in a largely unfavorable environment. In Lesotho, most of the country is mountainous and there is extensive soil erosion; less than 15 percent of the area is considered suitable for intensive cultivation. In Botswana, rainfall is highly erratic and the country is prone to frequent

1/ World Bank Atlas, 1976. - 8 -

drou-ghtsn. Only ahboit A nprcent of the area i Qisiitnble for arahle nrndoiution, compared to 20 percent in Swaziland. Given the traditional system of land allocatlon and the problem of soil erosion, population growth has intensified the pressure on land resources, particularly in Lesotho where the population density p. agri-4cul-tral 'and has increased romJL in42 1060 to about 40 in 1973. Table 3 shows the sectoral distribution of GDP.

Trabl e 3:P GDP BY SECTOR, 1978/f74A (percent)

Botswana Lesotho /a Swaziland

Agriculture & forestry 32.1 47.2 31.5

Mining 8.3 0.3 2.4

Manufacturing 5.3 2.1 21.6

Construction 11.0 2.3 3.7

Electricity, water, etc. 1.8 0.6 1.9

Trade, (inc. hotels & restaurants) 18.4 15.4 10.6

Transport & communications 2.8 2.3 6.0

Finance & business services 5.7 1.7 2.4

Community, social & professional services 11.3 14.7 15.7

Ownership of dwellings 3.3 13.4 4.2

100.0 100.0 100.0

/a Relates to 1972/73.

Source: IBRD countrv economic reDorts.

16. Swaziland has experienced a period of substantial economic growth over the last two decades= During the 1950s and 1960s, GDP grew at about 12 percent a year, following the development of mining (asbestos, iron ore), large-scale plantati-ons onf forestryu, suganr, ctuand ieape, rd so ciated processing and manufacturing industries. Since 1970, GDP has increased in real terms at about 7 percent a year. In Botswana, th.e develop.ment of the modern economy really began with the exploitation of minerals (copper/nickel, diamonds) in the late 1960s, anA resultedI in the rapid growth of GDP at over ~15percent ayr LL up until 1974; c urrenLtU _LD Lis icanLU I t aboutUL pecn 15 percent a year up until 1974; currently GDP is increasing at about 8 percent - 9 -

a year. ComDared to Swaziland and Botswana, Lesotho's economic growth has been modest; following a decade of stagnation, GDP growth is currently about 5 percent a year. Apart from a small diamond mine which is expected to start production in 1977, no other minerals of any commercial significance ha-ve son far been ident ified.

17. A significant feat-uire of the RT.B Pronomips is their close links with the economy of South Africa; this integration derives in part from their

histori-ca rel-a1onFship., TPast :i t-ho constra-intsQ of thpir Inndilocked positions. Migration has been a factor in this process, as has trade, money andf banking, a.d tourism. Since 1910, the BLS countries with South Africa formed the Southern Africa Customs Union, which provides for the free flow of goods and free industr1al access within the regional market. The bulk of merchandise imports (in the case of Lesotho, over 90 percent of totaL merchar.dise tralUe)l comes directly from, or passes through, the distribution system of South Africa. The Customs Union also provides for the paymerit ofL aLLL customs and excise re-venues into a coUmon fund; the share of each BLS country is then determined in relation to the value of its total imports and production of taxable goods, plu8 a cUWpesUatory adjustment of 42 percent for the economic disadvantages which derive from membership with highly industfialized South Africa. Following the revision of the Customs Union Agreement in 1969, customs revenues have increased significantly and have eliminated the chronic deficits which characterized the government finances of the BLS countries. Customs receipts under this agreement have become the main source of government revenue. In recent years, the emergence of a downward trend in these receipts has led to a revision during 1976 of the revenue-sharing formula of the Customs Union Agreement, which will increase the growth of customs receipts over the next several years. One consequence of the Customs Union, and especially of the fact that so much of what is consumed in the BLS countries is produced in South Africa, is that much of the money earned by migrant workers ultimately finds its way back to South Africa and further strengthens the polarization in development which characterizes the regional economy.

Table 4: CUSTOMS REVENUE AS A PERCENTAGE OF TOTAL GOVERNMENT REVENUE, 1967/68 - 1975/76

1967/68 1968/69 1969/70 1974/75 1975/76 /1

Botswana 21.2 18.2 44.7 37.6 31.0

Lesotho 31.8 29.4 52.5 60.1 56.2

Swaziland 26.1 19.3 48.4 44.6 32.2

/1 Estimate.

Source: Ministries of Finance. - 10 -

18. The money and banking system in the BLS countries was essentially an extension of that in South Africa. Until 1974, the rand had been the common currency in these countries which together with South Africa comprised the Rand Monetary Area. Although Swaziland established a Monetary Authority and introduced its own currency (the lilangeni) in 1974, the rand continues to be legal tender. Lesotho has retained the traditional use of the rand as its currency, but under a new Monetary Agreement between Lesotho, Swaziland and South Africa. Lesotho now receives an annual comnensation based on the estimated volume of rand in circulation. In 1975, Botswana established a Central RBnk and in Augqus 1q76 introndticd an indtpnndnnt rflrrPnrvy the pula= Al- though these traditional arrangements have benefitted the BLS countries in terms of investments and markets, they have until recently, hampered the development of local financial institutions through which monetary policies for acceleratir.g domestic development could be implemer.ted. 4 4 la iinin.F n,Amomi ntga"ntmnl4n anmnro ennancelA n,nian 1~~~~ n wA_:FA_ v ;A;O_1O^ .;w._;., A_

* J . AI-VLSVII. n aL..tJL- *0 ail.t, V 1LLy r apidlyr expandiunLtg6 *VI.JL IIUt in each country, and the growing demand for imported goods from South Africa. Si-nce 1969, there 'as beer. a significant increase in the number of vi-sitors, 1 7U 7 , LL L iid~ U~L J. _iLI_ .L i A. Li LII [U UL UtI ViLUL 90 percent of whom come from South Africa. In Lesotho, for example, the lOLA to -AIOUt4 1A7r .… r,umbUer rose from 5,000 in 19U6 tLUaut 85,00UV in 197j. Tourism si concentrated on weekends (average length of stay is 3 days) and its growth is partly assocLatedU with the prLUVislU UoL casLIU Ldai.LLLes Which dLa currntLLy unavailable in South Africa. - 11 -

CHAPTER IV. EMPrLO-MENT, WTAGES UND FAIuMi INUOMES

Employment

20. Every adult male in the BLS countries faces three basic employment options: (1) to work on the smaliholding to which he is entitled under the traditional land tenure system; (2) to seek domestic wage employment, including self-employment; (3) to migrate for contractual employment in South Africa. These choices are repeatedly exercised during the working lives of the adult male population so that circular migration has become an integral part of wage employment. For example, McDowall finds from a sample of work histories of Basotho migrants, that a miner spends on average 35 percent, or 15 years, of his working life in the mines of South Africa. 1/ Domestic employment itself involves some migration, since work opportunities are mostly concentrated in only a few urban areas, mines or plantations.

21. Although wage employment has expanded rapidly in Botswana and Swaziland since independence in 1974, it engaged only about 24 percent and 50 percent respectively, of all adult males. Until 1972, the number of Batswana working in South Africa was almost equal to the number in wage employment in Botswana itself. In Lesotho, the situation is unique among labor exporting countries; an estimated 55 percent of all adult males are at any one time employed outside the country.

22. The process of migration follows closely the Harris/Todaro thesis which relates decisions on rural/urban migration to the relationship between the income which can be earned in agriculture and (a) the level of exnected income, and (b) the probability of finding a job. 2/ In the case of southern Africra thp deicQisnn procesnrs isreatrlv influipnrpd hv the addifinnal nnfinn of external migration to South Africa, and by the known high probability of finding employment; the demand for migrant labor from the BLS countries cor- tinues to be strong, although some slackening became apparent in 1977.

23. Differences in the rate of migration partly reflect the extent of 4 em-loymtent opportunities in each country.. Some ousi--emirat t-he official recruiting machinery, particularly for employment on farms, hence the extent of total migration is n.ot fully kn-wn. The decen ial population censuses provide some data on temporary absentees, and though census data

__nLaLi a LL_. LLJ_ L_ u L _-_LJ L eL6 :L._ _ : L±D,_ v: LI_.

1/ McDowall, M. Basotho Labor in South African Mines, in Agency for Indus- trial Mission Report, Transvaal, 1976.

L/ M. Todaro, 'A model of labor migration and urban unemployment in less developed countries' AER, (March, 1969). - 12 -

provide useful insights into the tota'l m.igrant situation. _/ ensus d'ata UVLU~ U ~UL L[I. L.ELL L.LIL LLUI~L ~.IL6iL~ LL L/ -I indicate that between 61 percent (Botswana) to 67 percent (Swaziland) of the 15-59 ma'le age group uroaUdLy taLken as representative OL the worLking life OL the migrant population) engage in wage employment. Aaditionally, the proportion oL males in local employme-nt varies inversely with that employed in South Africa. In 1975, 40 percent of male Swazis in the 15-59 age group were in wage employment in the domestic economy, compared to 17 percent at work in South Africa, while in Lesotho, only about 10 percent of the relevant age group was employed at home, as against 55 percent in South Africa. Since country agreements limit contractual employment to not more than two years at a time, and since the average contract period is currently about 9 months, a substantial proportion of the adult male population would, at one time or another, have worked in South Africa.

Wages

24. The extent of external migration and the continuing exercise of this option by a significant proportion of the working male population hamper the effective implementation of national wage and employment policies. In addition, the level of wages in South Africa, particularly in the mining sector, exerts a continuing upward pressure on wages in the BLS countries. Against the background of a large, low income and low productivity traditional sector, government policy must be addressed to the following interrelated aspects of the wage and employment problem: (1) to contain the widening differential between urban and rural incomes not only on grounds of equity, but also to dampen the incentive for rural/urban migration; (2) to accelerate the supplv of skilled manpower, the severe shortage of which has exerted a strong upward pull on urban wages; (3) to consider the policy trade-offs necessary to achieve and retain an adequate supply of labor (skilled and unskilled) for acceleratinR domestic develoDment. particularlv in the case of Lesotho: (4) to slow down the migration of skilled and semi-skilled workers to South Africa at the same time that shortages of labor have emergpd in modern nariuii1tairP, more particularly in Swaziland; 2/ (5) and to attract and retain in the domestic mining indii.trv Pynpripncpd miners who continue to migrate to South Africa, as in the case of Botswana, where a labor turnover rate of 50 percent is being

25. In general, wage policy is still in an el s -an far, only Botswana has taken steps to integrate wage policy with national dev- elopmentuJ.pL1LL planning. LLiLL~ Ini JJUlotswana, L~~ theLLL~'U lovernment'sUU LJL1[ concernLL withI..L tLIIftheshr Ziiiarp

1/ Defined as persons absent for less than 3 years; the number of absentees eisewnere tnan in South Africa is considered insignificant.

2! Reducing Dependence, A strategy for Productive Empioyment and Development in Swaziland, ILO, June 1976. - 13 -

upward trend in wages influenced bv a ranidlv developing mineral sector. led to the introduction in 1972 of a national policy on incomes, employment, prices and profits. 1/ The mainr oh4ect-ive warp to redilrc the wage incentive for rural/urban migration by restricting the gap between urban and rural incomes to the approximate differential in the cost of living, and to relate the wage structure in the private sector more closely to that of Goverr.mer,I. In aAAto.on, the policy was designed to retain +he count- w.age cost advantages in the promotion of private investment, and to prevent the creatLLoiI Of a wage andU salaLy structure (largely geared to expatriate recrult ment) which would be inappropriate to the country's long-term development objectives. Because of political constraints during the early years, tLhis policy was not vigorously implemented; for example, the minimum wage rate for government employees doubled in 1974/75, bDUt hne Government nas since movea with greater determination to implement its policy of 1972. Minimum rates have been laid down by wages councils for certain occupations in the private sector, but the large establishments (for example, mining) generally follow government guidelines in this respect. In both Lesotho and Swaziland, no general wage policy has yet been developed, but minimum wages have been established in the Government as well as in the private sector; in Swaziland, wages in a number of sectors are determined by wages councils, while in Lesotho, minimum wages over a wide range of commercial and industrial occupations have been established under legislation enacted in 1975.

26. The rise in minimum wages in recent years must, however, be viewed against the rapid increase in mine wages in South Africa. Currently, the minimum rate for black underground workers (novices) is R 2.50 per shift (about R 65 per month), which contrasts with R 0.72 per shift in 1972; mine wages are exclusive of free board, lodging, transportation and medical services.

Table 5: GOVERNMENT MINIMUM WAGE PER DAY FOR UNSKILLED LABOR AND MINIMUM UNDERGROUND MINE WAGES (rand)

1972 1974 1976

Botswana .80 2.00 2.40

Lesotho /a .60 1.00 1.85

Mine wage (minimum Der shift for .72 1.60 2.50 underground miners) /b

/a Unofficial minimum wages up to 1974.

/b There are about 26 shifts per month.

Sources: Ministries of Labor.

1/ -N-.tionalPolicy on ITncnrome mrployment-, Pricces andiv4Profit-, Government Paper No. 2, Gaborone, March 1972. - 14 -

Farm Incomes

27. Low and uncertain incomes, particularly from crop production, provide a strong motive for external migration. In Lesotho, subsistence production, which is largely determined by the vagaries of weather, showed a significant fall in the output of maize (the main staple) between 1950 and 1970 and only a modest increase in that of sorghum and wheat. Maize output increased substantially in 1973, as did the output of wheat which was twice as great as it had been three years earlier; sorghum production too was almost 50 percent higher. But this was a year in which harvests were exceptionally good. What is more important is that the production of maize and wheat which account for over 70 percent of basic grains, is less than that of 1950.

28. Another important characteristic of subsistence farming was noted in Wallman's 1963 study which found (from a sample of households in a lowland village) that less than 20 percent of households produced enough for minimum subsistence (defined as four bags of grain per person). 1/ A similar survey by Murray in a northern village in 1976 showed that the average yield of maize and sorghum was 7.2 bags per household or about one-third of minimum subsistence requirements. 2/ Tt is difficult to detprminp whether this decline in output is a cause or consequence of increasing migration, but it has serious implications for a countrv which was once a net exnorter of hnsir grains. This is an area to which further research needs to be directed to assess the extent to which a steady stream of supplementary income from migration is shifting agricultural effort from crop production to livestock rearing, f-urther exacerbting soil rnosin, an-d whether the absence of so many able-bodied men reduces the efficiency of crop cultivation.

Table 6: LESOTHO: PRODUCTION AND YIELD PER ACRE OF DDT7rPTDAT FOODI CROlPC 1i95070

195 19 60. 1 Q70 1 970

in 200 bags per (000's) 2,354 1,329 733 1,351 bags per acre 5.3 3.3 2.3 3.8

Sorghum in 200 lb bags (000's) 543 590 627 926 bags per acre 3.9 3.5 3.1 4.3

Wheat in 200 lb bags (000's) 549 634 638 628 bags per acre 4.5 3.8 2.4 3.1

/a Murray, Colin. From Granary to Labor Reserve, op. cit.

1/ Wallman, Sandra. 'Conditions of Non-development; The Case of Lesotho,' JDS, Vol. 8, No. 2 of 1972. pp. 251-261. 2/ Murray, Colin. 'From Granary to Labor Reserve' An Analysis of Lesotho's Economic Predicament. Capetown, SALDRU Conference on Farm Labor, September 1976. - 15 -

29. As regards livestock, wool, and mohair (which account for 70 percent of the value of merchandise exports), recorded trade shows that while prices have increased rapidly in recent years, the volume of exports has actually declined. For example, between 1970 and 1974, export prices almost tripled, while the amount exported fell by 12 percent. Although some unrecorded trade in these commodities is known to take nlace across the border, this is not considered significant enough to reverse the downward trend in the nuantitv of exports. This general decline in subsistence production and in exports is accompanied by a steady upward trend in food i,m,ntrt- which hvue incrrased in niiantityv hv abhut- 12 nprrpnt a year sinrc 1970.

30. Current data on rural incomes are not available, but the consumption and x,pndiA4 e.. survyof 196T769O -india . 1,4 4 , A-ne n 4 F A ---- A,AmA 1-A, rural households on off-farm receipts. 1/ Average income per household was estimated a- R 214 per annuru (includifng doesiAosmto--- farm prodC----uce) ~L.L uI ~ ~L1' ~.J-t JL IL.U1\-ILUUI16~ ULVLU=a#L.AL _L10ULWUI L.LLJL ~ J CLJLLUjAPLUUU of which off-farm receipts - mainly migrants' remittances - accounted for '44 percent, with 1L8Uperent dUeriLveU fLrom c-ereaL prouuctLon andU 21 percent fjrom livestock. Farm income in cash and kind was estimated at R 118 per household, adl'u is currentLy abtout R LUU 4f a year, DUt Lti[s 'Ls sL11i su'Dstantially Lower than income from wage employment within Lesotho, and even more so when compared with the level of income wnich can be earned ini South Africa. For example, the minimum wage for unskilled labor in Lesotho is about R 40 per month, compared to R 65 per month (excluding food, lodging, medical expenses and transportation) for employment in the mines of South Africa.

31. In Botswana, mean monthly earnings of local employees during 1975 were R 56 per month in the private sector, and about R 70 per month in public sector employment. 3/ The recent rural income survey provides some details on the level of incomes and the variety of sources from which rural income is derived. In addition to subsistence crop production, these sources include hunting, wild food gathering, fishing, livestock rearing and cash employment on commercial farms. The rural population is characterized by an uncommon system of settlement; most people live in nucleated villages from which they migrate seasonally to their lands and cattle posts. The 1971 population census shows 27 percent of the population living in larger villages (more than 1,000 persons) and 60 percent in smaller villages and cattle posts. This internal migration is continually taking place, and in recent

1/ Rural Household Consumption and Expenditure 1967-1969, Bureau of Statis- tics, Maseru, 1973.

2/ Marres and Van der Viel, Poverty Eats My Blanket; a Poverty Study, the Case of Lesotho, Government Printer, Maseru, 1975.

3/ Employment Survey 1975, Central Statistics Office, Gaborone, 1976. - 16 - years has shown signs of assuming a more permanent character. I/ People living in these smaller villages are among the poorest segments of the rural population. While the average income per rural household was a high P 1,068 in 1974/75 (median income P 630) this reflected both the high profitability of commercial livestock production, and severe skewness in cattle ownership; about 45 percent of households owned no cattle at all, while 10 percent of cattle-owning households owned 50 percent of all the cattle. However, in the small village households (without livestock) the average income from crop production was only P 76 a year, as against P 258 in households dependent on cash emnlovment: the corresnonding avera2e income of small village households with some livestock was significantly higher at P 410 a year. Migration to South Afrira haA thuis bepomp an important meang for suppnementing the inrome of those households with no livestock. 2/

32. In Swaziland, modern farming accounts for 44 percent of total wage mrlnmeritn ar.d average earr.gnes rof an iincleil laed woerlrar in !97L were E 38 per month, and ranged from E 21 in plantation agriculture to E 47 in the mining industry; the minimum w-age in South AF-4-a mines at the time was R 42. No data are available on incomes in traditional agriculture which provides the livelihood,-. of about balf the pop-ulation. Tn two Aevelopment .L.V 0.LLIU 'J. O tU. ll.L LLCe.J40..1IJUI*0II tLICone tJ.-LWJor ruralL lI& 04. lICY 4..JjLUCIL. areas, particularly in the northern region, where agricultural inputs have b.een concentraledA, th,ere have been encouraging reslt bohi trso Li~1 LAI L . L0LU , L.LL L ~IV~I~1L~ ILlU 6 LLLr L _~UL~O U.J LIL LL L.~_.LUII %J.L increased crop yields as well as farmers' incomes. However, rural income is genrerally considered to bue low. Estlimates by a recentIL.L 0 mi-oLA average- rural income from paid farm employment at 2.6 times that earned in the tradi- tiornal sector. 3/ In addition, the legal minimum wage in agriculture in 1975 was less than half (about 45 percent) the corresponding wage of a general laDorer in manufacturing and processing inaustries in urDan areas. Altnougn the level of migration to South Africa has remained fairly stable at about 8,000 a year over the last decade, since 1974, this level has almost doubled, and includes a new element of skilled and semi-skilled workers. The causes of this new upsurge in migration are not fully known, but it occurs at tne same time that a shortage of workers exists mainly on the sugar plantations; the substantial increase in mine wages in South Atrica appears to be one of the principal factors.

1/ Botswana National Report for Habitat, Gaborone, 1976.

2/ Income of rural households includes transfers from migrant workers.

3/ Reducing Dependence, ILO, op. cit. - 17 -

CHAPTER V. THE ORGANIZATION OF RECRUITMENT

The Legal Framework

33. This chanter desRrihes the organiz2tion of rerruitment in some detail, largely because differences in country arrangements are not well known from one rotintrv to another.

34. The laws and regulations goverrning the recruitment of migrant workers are broadly similar in each of the BLS countries. They derive from the consol--idatedA r mployment A+ts ----as Au-4in the Into0 which basically reflect the main provisions of various ILO Conventions relating to contrac's of ric an-- ytm ffrirZlbrrcutet LU L1LaA%- &.. 0=LVA.%L= CAIU MOCUJ .L kUL=.L6nL 'Lauor recru'Ltmerit. -mheh main requriements concern the licensing of recruiting agencies, conditions affectLing their operations, and the enforcement o0 theSe requirements by the Labor Commissioner.

35. Recruiting licenses are issued by the Labor Commissioner in each country, after consideration of the following main criteria: (a) the possible effects upon the population (especially health, welfare and development) of the withdrawal of adult males from any area; (b) adequate provision for safeguarding the health and welfare of persons recruited; and (c) verification of the recruiters' ability to fulfill the required legal obligations. All countries prohibit public officers as well as chiefs and headmen from engaging in recruitment or from persuading others to be recruited, and the Labor Commissioner is empowered to restrict or close recruitment in any specified area. Generally, the granting of licenses is seldom denied. While health and welfare arrangements for workers and the industrial relations record of employers can be routinely checked, labor departments are not adequately staffed to analyze the social and economic effects of male migration on any specified area, and this function is not normally considered. Recruiters are also required to keep proper records of their operations and to provide relevant statistics to the Labor Commissioner on a regular basis. These records which have been built up over the years by the recruiting agencies have become a rich source for research, since they permit detailed analysis of the social, demographic, and economic characteristics of migrants over time; however, they have not been sufficiently exploited to help governments in the formulation of policy (para. 117).

36. The level of licensing fees varies from country to country. In Botswana, the annual fee for a type A recruiter's license (recruitment of less than 100 workers) is R 20 and that for a type B (over 100 workers), R 100. These fees were fixed in March 1976; prior to this date, they were last fixed in 1964 at R 2 and R 50. respectively. In Swaziland foreign employers may recruit up to 20 workers directly without payment of a license fee, but a fee of R 10 is payable for recruitment of between 21 and 50 workers; more general is recruitment of over 50 workers when a fee of R 50 is charged. In Lesotho, the licensing fee Der agencv is R 50, and in Mozambiaue R 250. 1/

1/ 1964 Agreement. Country Agreements with South Africa 1/

37. Apart from Mozambique, country agreements between South Africa and the other supplying countries are of recent origLn (the first was with Maiawi in 1967) and represent formalization of traditional arrangements following the independence of these countries. The first formai agreement on the recruitment of foreign labor was concluded between the Chamber of Mines and the Portuguese authorities in 1897. Subsequent amendments between 1901 and 1914 consolidated procedures for the organization and recruitment of workers and gave a recruitment monopoly to the Witwatersrand Native Labor Association (WENELA). In particular, the agreement provided for the issue of passports, a system of voluntary deferred wages, and the recovery of local taxes. In 1928, a new agreement was concluded. Under a unique provision generally known as the Mozambique Convention, a proportion of the earnings of Mozambican miners was remitted to Mozambique in the form of gold at the official price and recovered in local currency upon completion of workers' contracts. The agreement also stipulated the volume of South African goods to be transported by rail and shipped from the port of Lourenco Marques (now Maputo). The sale of this gold on the free market, particularly in recent years, made this arrangement extremely profitable to the Portuguese authorities and more recently, to the new Mozambique goyernment. The Agree- ment also set limits on the maximum number of miners to be recruited annually and made the deferred pay scheme compulsory.

38. In 1964, a new agreement, essentially an extension of the provisions of the 1928 Convention, was concluded between the Republic of Portugal and South Africa. It enlarged and detailed the functions and responsibility of the Labor Representative stationed in Johannesburg, including access to the South African authorities on consular and other matters relating to the welfare and employment of Mozambicans under the Agreement. Since the independence of Mozambique in 1975, it has been reported that this agreement was revised, but details have not been made public.

39. Although Malawian (formerly Nyasaland) workers have been recruited for employment in South African mnes since 1904, no formnl arra.ngements were concluded with the Chamber of Mines until 1936 when the recruiting agency (WENEL..A) w-as granted :a monopoly. Under. a nee, aoree,ment conrclud-ed irn 1965, the Malawian Government assumed direct responsibility for the recruitment of workers through its Department of Labor andu sough tto maximiJze the finar.cial returns from migration through the following main provisions: (a) compulsory deductions o'L Malawian taxes anu ami-ly remittanIces; (b) rtepatriatiOU UL U percent of workers' monthly wages after six months' service; and (c) 50 cents attestation 'ee for eacn contract of service with an extra 10 cents per migrant for each month's service rendered. The country agreement with South Africa came into effect in 1967. This provided for payment of a basic sum of R 240,000 for an annual recruitment of 20,000 migrants and adjusted at the

1/ Breytenbach, W.J., Migratory labor arrangements in Southern Africa, Pretoria, 1972. - 19 -

rate of R 6.-00 noer recru it- i f tho atutii I nuimhbor ovrexAe d o r fel scho rt o f 20,000. The Agreement incorporated the recruitment practices already in force and established the preference of the Malawi Governent for the transport of its workers by air. It also regulated Malawian employment in the non-mining

sectors of tht-e economy (a number of Mzlawlans- we alr -Ad-y -engaged An non=IL mining employment), detailed the functions and responsibilities of the Malawi LbrRepresentative in 'out' Africa, an,d tiLglhtenedu th'e proviLsions f'or th'e LI'UU L J_±1 ~JJLL r.L I 5.,dL ±ILL~ 1~jLULi[~LLLL repatriation of illegal migrants.

40. The geo-political history of the BLS countries and their special economic relationship with South Africa made for minimum regulation of migration from these territories, and large numbers of migrants have become permanently absorbed into the South African population. In fact, otficiai Soutn African policy following the establishment of the Union in 1910, envisaged the political integration of the BLS countries within South Africa. However, in 1963 the South African Government introduced labor control measures, which differentiated between migrants from the BLS countries and local South Afri- cans. These measures, which became fully effective in 1966, required foreign migrants to carry passports instead of the traditional "reference books" which were required of the local African population. Country agreements on migration have since been concluded between South Africa and the BLS countries; with Botswana and Lesotho in 1973, and with Swaziland in 1975. 1/ The main provisions concern the appointment of country Labor Representatives in South Africa and the definition of their responsibilities. So far, Botswana has appointed one Labor Representative in Johannesburg, and is currently considering the expansion of this service; while Lesotho has established representation at four locations in South Africa with negotiations currently in progress for a fifth. Although no diplomatic representation exists between the BLS countries and South Africa, it is generally recognized that an effective liaison between the migrants and their country Labor Representatives in South Africa is essential to the operation of the migrant system, and that the wide dispersion of migrants across South Africa calls for further strengthening of existing representation.

41. However, the effectiveness of labor Representatives could perhaps be improved if they were highly trained in industrial relations and administration, and were selected from the more senior ranks of the public service. Tax collection continues to be one of the main functions of Labor Representa- tives in addition to quasi-consular activities concerning the general welfare nf migrants; industrral rp1nr1nns and personnnl rmnmsrl1ing seem to have a low priority, but in view of the unrest which has occurred at the mines and com- nnponds frnm timei tn time,a rnnsiderat-inn might ha aiiven tn oextenAding basir consultation in these areas.

_/~ThrUsdt~ ~. e Joint representation through an official stationed

.55 LLC-L c UD=U Lu U jJ .L L. cjL~~ L.L6.LLL LLLi 5.J L1 Li &.iIL. -L -L 0 LC±LL uL in Johannesburg, but this ended when the BLS countries achieved in- depen'dence . - Lu -

The Selection Process

42. The pattern of recruitment is basically similar throughout the BLS countries, and selection is facilitated by the presence of agencies in the main population centers. In Botswana, there are twenty such centers; in Lesotho nine; and in Swaziland six. With migration an established way of life, there is little need for recruitment publicity; generally, most workers call on recruiting agencies at their own convenience. Agencies give daily postings of those mines open for recruitment, and miners can request employment in the mines of their choice; recruiting agencies in the BLS countries assume full responsibility for all aspects of the recruitment process. The Labor Commissioner works closely with these agencies to ensure that recruiters satisfy the requirements of the licensing laws, and to validate the contracts of service between employers and workers. Payment for this attestation, as it is generally called, varies among countries. It originated as a charge for defraying the necessary expenses of government administration and was for several years fixed at R 1 per migrant in all the BLS countries. Currently the attestation fee per migrant and the effective dates are: R 10 in Lesotho (1974) and Botswana (1976); and R 1 in Swaziland (1965).

43. Sending countries require all migrants to be medically examined before departure. However, on arrival in South Africa, miners are subiect to rigorous medical examination and those declared unfit are either assigned to siirface work only or repatriated at the emnlovers' exnense. In 1975; of a total of 424,535 miners examined, 18,923, or 5 percent, were rejected on mpdial grouind, hbut only 3-212 wprp actiu211v rpnatriated. The MLO maintains a wide range of free medical services to migrants including two h zie t-.1 cwir.^cAr17 rac::vrrh int.^ nperitnnti.nnnl eiiczt-ncoc ic rnrripr1 out. The cost of transportation, which is mainly by road and rail, is normally borne by employers. Country agreements specify the mode of transport, the passport control posts and the required travel documents for migrants entering South Africa. The principal provision, of employer/-po c tracts which are verified by the Labor Commissioners, relate to terms and

Lt L LUUding LJ4.ULllLUI- UU Co Cf.L X LaLILCO X L LSUOt_l conUdLtuion V emloCLmLCUuoi L n W6 5 and medical services.

The Deferred Pay System

44. A system of deferred pay, whereby employers systematically deduct a proportion of migrant earnings, has long been a built-in feature of recruiting arrangements. It provides a minimum accumulation of savings which are readily available to migrants at the end of their contracts. Tne system currently in operation raises two principal issues: (a) whether it should be voluntary or compulsory; and (b) where should the amounts deducted be kept during the period of accumulation? Except for Mozambique and Malawi, 1/ the system was voluntary until recent times and savings were held by the MLO in South Africa. Interest earned did not accrue to the migrants, but was partly distributed annually to a number of welfare organizations (for example,

1/ Under the Malawi and Mozambique agreements with the mining authorities, the deferred pay scheme is compulsory. - 21 -

mission hospitals) in the sending countries. In Botswana, 99 percent of mine recruits continue to participate on a voluntary basis (according to information provided by the MLO): some Dersuasion is probably exercised, but this does not infringe upon the right of the worker to opt out of the system if he so wishes. What form. if anyv this npersiasion takes is not clear, but it is probable that the administrative procedures are such that deferred pay would he dediurtod aiutonmaiticllv iinless tha micyrnnt- snprifiral1v reqiutested ot-herwisPe In Swaziland, 95 percent of recruits participated in 1975, while for Lesotho the level of particQpation was 98 percent. In Botswana, workers are faced with a simple option of having 60 percent of their wages deducted or none at all; t-here is no allowance for varying the prop---r-- tnn to- be dedAuctedA S4ln & L ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~LV ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Uy ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~L1 ji~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~II - 1 I - .- . - - 5 ~ the system is administered by the MLO as an apparent free service, this

restrictionLA. LL L.tJ L isLb ipsdfradmin'strative-.WI IJOCU LU I. 6UUIIJ.bLL& LLV t- %_ULIV iLJ.~L_LLk_ , OILU d.LOVULUomnmz IIILJLILLonelec,adas costs by avoiding possible requests for frequent changes in the proportion d3eductedU.

/. C T_ ~'1 7 - t_LI __ L _ __ :__ _ __ti _1 45. ILn 1974, the Lesotho Government passedu legislation under which 60 percent of migrants' earnings are repatriated to the Government-owned Lesotho National Bank; no deductions are made during the first and last months of the contract period. Although there had been a high rate of voluntary deferrment in tne past, tne reason for making deferred pay compulsory was related to the government's efforts to mobilize domestic resources, and thus channel these savings into productive investment.

46. In Botswana and Swaziland, the administrative machinery between the mines and the respective banks for implementing the scheme appears to work satisfactorily, but in Lesotho, the compulsory scheme which became effective on January 1, 1975 has encountered a number of problems. First, largely because of inadequate public relations, Basotho miners in South Africa reacted sharply when the scheme was announced and there was unrest at a number of mines. Secondly, some small mines, not affiliated to the Chamber, defaulted in remitting the lawful amounts deducted under the scheme, and while the Government was taking steps to recover these obligations, one or two of these concerns were declared bankrupt; settlement of this issue could reach litigation. Although the major companies have not been involved, the climate created by these developments could affect the good relations which traditionally exist between the Government and the Chamber of Mines.

47. Since the scheme came into effect, the average duration of the contract fell for a short period in 1976 from nine months to six months, but is generally about 9 months. Although this could be attributed in part to the faster achievement of migrants' financial targets because of rapidly rising wages, substantial numbers now extend their contracts while on the job without first returning home. The result has been a fall in compulsory remittances, since the law provides for deductions only during the period of the initial contract signed in Lesotho. The Government has been considering measures to close this loophole; for example, by validating migrants' passports for only six months from the day of departure. Migrants would therefore become illegal if they extended their contracts while remaining in South Africa. - 22 -

48. Legislation relating to the deferred pay scheme falls under two separate ministries. While the general conditions governing recruitment are contained in the Employment Act, 1967, as amended (and administered by the Department of Labor within the Ministry of Commerce and Industry) the Deferred Pay Act falls under the responsibility of the Ministry of Finance. The Deferred Pay Regulations, however, form part of the Employment Act, and are therefore administered by the Labor Commissioner. Experience so far points to the need for strengthening the administrative machinery as well as increasing collaboration between the relevant ministries in the implementation of the scheme. Under current arrangements, payments to returning migrants recruited by the MLO are advanced by the local agency (pending reimbursement by the Lesotho National Bank). The amounts credited to each migrant are verified against a certificate of entitlement which he receives at the end of his rrntrArt. Migrants then present 2 nayment vnouhpr nn thp basis nf whirh the Lesotho National Bank pays accrued interest at the rate of 5.0 percent a year= Cnrrepnnndina inteprpet ratest nn dpfprrpd npaments- arccimulnIated in l,cal banks in Botswana and Swaziland are 4.5 percent and 5.0 percent, respect- ivolyv ThGCovarnment nlanc to nl :v G ro:tor rnlmb in tho nelm4n4atcrat4oAnf the scheme, particularly in the verification of accounts, and is discussing wtht.,.e mining. authorities way f -nwhcthjs can be effected. A presCntL the Lesotho National Bank is unable to determine in advance the amount to the crredit of Jn4nAil4,4- 1 m4r-ant; this wuld reui-re detailed report-ing by the mining authorities. However, the extent of accounting would be beyond the present adM4nistrative capacity of the Lesotho National Bank and would neeA to be mechanized. In general, the deferred pay scheme has worked satisfactorily witLhL th1Ie XLIJ uUA i .mpletation bUL_LUILLy somULe ofL the smabL'Ler mines couLdU b)-e improved and should be more closely monitored. By the end of 1976, accumula- tions were about R 10.0 million equivalenL Lo aDOUL 60 percent of Government planned capital expenditure in 1976/77; although this amount is less than originally projected, it represents a substantial mobilization of resources. The fund is administered by a Board of Trustees and, so far, an amount of R 4.75 million has been earmarked for investment, and includes loans for electricity for the new diamond mine, and for the recently established Agri- cultural Development Bank. The deferred pay tund should gradually become an important source of development finance, and Government should formulate a detailed investment policy tor its management.

49. The Governments have not yet fully assessed the taxable capacity of the migration scheme. Migrants are exempt from taxation in South Africa through double taxation agreements, but apart from local government taxes, part of which is collected through the Labor Representatives, no other taxes on income are currently assessed in the home country. In Botswana, for example, it is estimated that if the collection of local taxes (R 84 per migrant) could be enforced through compulsory deductions at source, current local government deficits would be largely eliminated. - 23 -

CHAPTER VI: FOREIGN MIGRANTS IN SOUTH AFRICA

Mobilitv

50. The structure and functionine of the South African labor market reflects sharply the political doctrine under which the country has been governed esneciallv since 1948. Under the Government's nolicy of apartheid or separate development, racial origin (as legally defined) largely deter- mines the role of intliduals in societv= This policy is based on the assumption that about 87 percent of the total area of the country is the rightful preserve of 'white' South A-fricans, while the remainder belonas to the African population. The basic legal instruments (the Population Regis- tratioon Act, the Mixed Marriages A.ct and the Immorality Act) are complemented by an extensive legislative and administrative framework (namely the Group ,AreasAL 8 In;e ;[T theI~.aIU Bantu L[Urban .U L Areas]j£4A d 'ConsoliduaULD.J.la tL~1 ion A Ac t; t heL~JJiL Bantu ~ Labor~ '~ AI.-c and Regulations; and the Bantu Affairs Administration Act) which govern the mobility of the various segmen1ts of the population, regulate their social intercourse, and direct labor supply accordingly. These measures have closely linked population and labor policies, and the position of the migrant worker in the South African labor market must be viewed against these arrangements.

51. Local Africans fall into two broad categories: (a) those who have rights, however tenuous, to reside in urban areas in the 'white' area, or on farms in white rural districts; and (b) those who cannot acquire such rights and who are therefore forced to remain inhabitants of the Bantustans 1/ and reserves, but who may migrate, for restricted periods to take up employment in the 'white' areas. The Bantu (Urban Areas) Consolidation Act confers residential rights in specified 'white' urban areas upon certain Africans while denying them to others. In brief, Africans in a 'white' urban area acquire residential rights if they were born in that area; or lived and worked lawfully and continuously in the area for fifteen years; or if they were the spouses or unmarried progeny of Africans already enjoying such rights, or if granted special permission. Since 1968, regulations prohibit Africans from the Bantustans and reserves from acquiring residential rights within white urban areas by mere passage of time. Similarly in the 'white' rural areas, the presence of Africans on farms is governed by the Bantu Trust and Land Act of 1936 read together with the Bantu Labour Act of 1964, under which policy is clearly intended to limit the growth of the permanently settled African population in white urban and rural areas to the natural increase in the population.

52. It is this environment which circumscribes the economic role of the foreign African migrant who enters the country as an adjunct to the local African labor force which is subiect to rigorous controls upon geo- graphical mobility. Furthermore, the foreign migrant is debarred from ever acauirina residential rights in either the urban or rural 'white' areas, and is to a large extent insulated from the wider South African society.

1/ Tho Bantustans are nine snecified areas designated for the exclusive occupation of the black population. - 24 -

53. The constraints placed upon the horizontal mobility of the African segment nf the Ibhnr fnrre are augrmented by further barriers to their vertical mobility. Educational policy particularly towards the African population has been characterized by lack of adequate opportunities at all levels. In effect, the majority of Africans are subjected to the system of legal job reservation, which, coupled with , 4ite trade unior. prracti-e and -estrictiv polices4o. training and apprenticeship, have created a labor force which remains very largely a reservoir of semi=skilled and unskilled worklers. These various policies and practices have led to separate labor markets which are split £largely aLor,g raci'aL .Lines an,U which fLor the most part are non=competitive.

54. Until 1973, Af-ricans were legally excluded from skilled training within the main industrial centers. The Government has recently introduced measures to advance industrial training, through tax concessions ana subsidies to employers, and by establishing a number of industrial training centers for Africans outside the Bantustans. However, the outcome of these programs will largely depend on the cooperation of trade unions, which must approve the jobs for which Africans can be trained. The relaxation by both the Government and the trade unions of some of the restrictions to African training has been prompted by the severe shortage ot skilled whites in several sectors of the economy; for example, the mining industry has introduced a training scheme under which Africans are trained as 'aides' to white artisans, though such "concessions" are generally made in return for significant wage increases to the white trade unions. African education and training could become one of the most critical factors in South Africa's future economic growth, by providing on the one hand an adequate supply of skilled manpower for the highly industrialized economy and on the other, the purchasing power potential from rising incomes of a large and skilled labor force.

Labor Relations

55. The principal legal instrument governing industrial relations is the Industrial Conciliation Act which gives both employers' and employees' organizations official sanction within a complex administrative framework for resolving industrial conflict. Africans do not have the legal status of 'employee', and are therefore ineligible for admission to trade unions registered under this Act. This exclusion constitutes a serious obstacle to any effective influence which organized African labor might have upon their wages and working conditions.

56. The authorities have provided an alternative system of conciliation between African workers and their employers in the form of in-factory committees estahlished under the Bantu Labour Relations Act of 1953 and revamped after a wave of industrial unrest in 1973. While this mechanism of works and liaison committees could -rove useful in resnlving fa torv-secrific disnutes and ameliorating grievances peculiar to any one factory or industrial group, it is n.ot consideredAa form of collective bargaining in the conventional sense. The machinery allows African workers little direct representation, while providing for a substantial measure of inAirvet offirinl rpnresentation nnd control; this tends to limit their effectiveness in dealing with management on an inAepenAent basis. - 25 -

Wage Determination

57. Minimum wages are determined by two main mechanisms:

(a) Industrial Council Agreements, negotiated between registered unions (for white.. coloirped and Asian workers) and rgisteprped employers or employers' organizations and duly sanctioned by the Ministry of Labor; and

(b) Des 4 air.s4 of Wnagc orn,v co-mpriscA of governmnnt-e nn-a4 ntees, which set minimum wages and general conditions of employment in sectors where no 4oint r.egotiating_ .inry -xits

C~~~~~a Q .~t LLL _ XJ L _ _ ___, _ C_ tL0 t.J..L: AACMhl :_ *. ._ J.J A 4___O _ _O_*

Lvu L L L ULjLaILL LU £UJL LIL WIJ.Jl £1LL1 L WUJ LLI .sL aLt LIUL to Industrial Council Agreements, they are nevertheless bound by their provisions, and are i±nCr U- 'lLLy becoming the maJority of workers covered by them. It is of even greater import for the foreign migrant that minimum wage regu- lating measures do not cover farm labor, domestic workers in private nouse- holds or African miners; wages for these classes of work are determined unilaterally by employers. As regards mine wages, tne Cnamber of mines announces its new minimum wages for African workers annually, and the new rates usually come into effect in June each year; in recent years, wage adjustments have also been made in December. However, neither the African workers themselves nor the authorities in the sending countries take any part in these wage determinations.

Employment

59. A significant feature of the employment structure (Appendix Table- 2.1) is the concentration of more than half of the African labor force in agriculture and services. In 1970, while agriculture accounted for 31 percent of the economically active population of South Africa, Africans comprised 91 percent of total employment in the sector; the corresponding situation in services was 20 percent and 68 percent respectively.

60. Similarly, the occupational classification of the economically active population shows a high concentration of Africans in the non- professional and non-technical occupational groups. For example, Africans comprised 70 percent of the labor force, but they represented less than 5 percent of the administrative and managerial group compared with 92 percent for whites.

61. The overall extent of unemployment in South Africa is difficult to gauge from official sources which cover only white, Asian and colored workers. Between 1960 and 1970, registered unemployment declined from 27,000 to 8,000, a negligible proportion of the economically active white, colored and Asian labor force. While full employment of these segments of the labor force had probably been attained by 1970, recent studies showed considerable urnemployment and underemnlovmant among the African labor force. 1/

I/ TLR= Knight; Labor Supplv in t-he Sniith Afrfcan Economy and its Implications for Agriculture, Capetown, SALDRU, Working Paper, No. 18, 1976; and C= Simkinsi Employment, Unemployment & Growth- Canptown SALDRU, Working Paper, No. 4, 1976. - 26 -

Although adequate statistics of African unemployment are unavailable, these studies indicate that the magnitudeis significant and shows a rising trend.

T2 4Is against this background of an inrcease i4. the potential domestic supply of labor that the role of foreign migrants should be seen. Foreign mi grant"s are em-ployed princip-ally in mining, wh4ch accounts for over 80 percent of the foreign labor force, and commercial agriculture which employs about 5 percent of these workers in legal employment. The balance are spread over the other areas of economic activity where their employment in recent years appears to be on the decline. It is principally the mining and agricultural sectors therefore to which attention is airected.

The impact of Foreign Migrants on Agriculture and Mining

63. The number of foreign migrants working on South African farms is not known precisely since there have been substantial 'free flows' and clandestine migrations over the years trom the surrounding countries, especially from Lesotho into parts of the Orange Free State and Natal, from Mozambique into the eastern Transvaal lowveld and northern Natal, from Southern Rhodesia into the northern Transvaal, and from Botswana into the maize triangle. However, during the 1960s, the South African government began to tighten control of these free flows. Prior to 1963, Africans from the 'High Commission Territories' (now Botswana, Lesotho and Swaziland) did not require passports to enter South Africa although they were, like other Africans, compelled to carry reference books. With the introduction of migrant labor control measures which differentiated between South African and foreign Africans, the flow of unchecked immigrants, reports Breytenbach, "was drastically curtailed." 1/ The impact of South Africa's declared policy of reducing the number of foreign blacks "as fast as is feasible in practice" 2/ may be gauged from migration statistics over the period 1960-70 which showed that the number of persons from Botswana, Lesotho and Swaziland working in South Africa fell by 32 percent from 431,000 to 294,000. 3/ However, over the same period, the number of men from these countries working on mines affiliated to the Chamber rose by 20,000. As regards the total number of foreign Africans between 1946 and 1970, the number of women fell sharply, whilst the number of men remained around 440,000. 4/

1/ W.J. Rrevtpnharhn Micratnrv Lahouir ArrnnvPments in Rnmlth Afrirn (African Institute, Pretoria, 1972), p. 61.

2/ ibid, p. 40.

3/ Ibid, p. 41.

4/ J.L. Sadie, Projections of the South African Population (Industrial

Development Corporation, Johanr.esburg, 17 p. 26. However, in the gold mines, (and the coal mines of the Transvaal), the number

of foreLign black mir--. ---- by '70 percentI LA.U 17,0IJ,V LAoJt U0,00 Lr, that the overall statistics are reasonably accurate, and that the number of Loreign-born workers claim'gLL1 LU Ue SoULtL JALL±QdiL fLo pUrposeb Us eHUUUt!LL.LU1 was not significant, there appears to have been a sharp decrease during the i960s in the number of foreign workers employed in commercial agriculture at the same time that employment increased in the mines.

64. Basing its predictions on past trends, the Department of Planning in Pretoria forecast that over the period 1974-79, the annual rate ot growth of employment in agriculture would be 1.3 percent compared with a projected economically active growth rate of 2.9 percent. 1/ More recent evidence, however, suggests that the absolute level of black employment in commercial agriculture reached it peak at the end of the 1960s and is now declining, as a result of mechanization and other changing techniques of production. 2/

65. The mining sector has had a significant impact on the functioning of the labor market. The most complete information on the sector is provided by the Chamber of Mines, which accounts for about 70 percent of total mining employment. In 1975, total employment in the mining sector was 692,000, of which 37.8,000 or 55 percent were engaged in gold mines. Over the decade (1966-75), total employment increased by about 2 percent, although employment in the gold and coal mines dropped by 10 percent; but this was largely offset by the expansion in other mines, in particular, chrome, copper and platinum.

Table 7: EMPLOYMENT IN MINING, 1966 AND 1975 (000)

Mineral 1966 1975 1975

GoldI4255 377-9 55 Coal 82.2 76.9 11 Quarries ~24=1 21.2 3 Asbestos 23.7 20.1 3 D1amnndR 21 1 IQ9 3' Other 99.2 175.9 25

Total 675.8 691.8 100.0

Source: Dept. of Mines; Mining Statistics, Pretoria, 1966, a.dA 1975

1/ Economic Development Programme for the Republic of South Africa In071.1974-9 '7fln (PELCLUra.... LL.d.)- .a pjpo.P55-- r.r andl- . 80.of%

I 'Farm Labuor 11 South't Africa: A Review, Social D-ynamics Vol. 2 No. 2, December 1976. - 28 -

66. The effect of the traditional ready supply of foreign workers on the labor market was nartlv to hold down mine wages. In addition, the expansion of manufacturing with the rapid diversification of the economy and the switrh hv lc,al Afrirann frnm mining to maniifarturing emnlnvment; not only helped sharpen the differential between wages in the two sectors but also between toh waag of black ar.d white workers in the minina erctnr itself= Tn 1936, only about 3,000 migrants (about one percent of the mine labor force) were recrui ted from north of latitude.A 220 ,but by !960, recrudi-m-rt- from t-his region (mainly Malawi) reached 83,000 or one fifth of total mine employment; over thel oame perio, Lt-; nuiber oft bJ.fla South AL Afc WaflLOCLtA.A.LILSL to 37 percent of the mine labor force. Also, between 1936 and 1960 the ratio of manutfacturing to mUi.ingQ.L wages foz black, wr had4- -in-.reased- Lr 1 .2:. t 2.5:1. Real wages in manufacturing had risen substantially, whereas those in mLining hiad actuadl1ly fallen. OVerL L[h periLod 15J.IJJ. , Llth aVeLage wag6 VL a white worker in manufacturing as a proportion of the average black wage remai[,eU aULmost stabLdUe (from 5.5: 1 toLU.7: LO bDutUL in minirLg, theLLu correLsponUding ratios increased dramatically from 11.5:1 to 21.0:1. Although other factors (the recruiting system, the color bar and the absence of trade union organization) influenced the low level of wages in gold mining, the access which the mining sector had to additional iabor, mainly from Malawi, and whicn was not available to manufacturing, was a crucial factor in determining the wage structure of the mining sector in the quarter century following the second World War. Since 1969, however, there has been a marked change in the pattern of black wages in the gold mines where they were no higher and possibly even lower in real terms than they were in 1911. 1/ Between 1969 and 1976, wages which had hardly risen in over 50 years almost trebled in real terms; the minimum cash wage, in current terms, of black mine workers increased from R 0.34 to R 2.50 per shift. Although during this period the average earnings of white workers grew more slowly than those of black, the absolute difference almost doubled (R 7,000 in 1975 compared to R 3,800 in 1969) and reflects sharply the continuing dichotomy within the mining industry, that is, a largely white skilled/black unskilled labor force, and the effectiveness of union power in partly maintaining a contrived scarcity of skills in the labor market.

1/ Source: Wilson, Francis, Labour in South African Gold Mines, CUP 1972. - 29 -

Table 8: ANNUAl AVERAGE CASH EARNINGS IN GOLD MINES, 1969-75

Index of Year Average Earnings EarninRs EarninRs Real Earnings Rand Rand (1970 = 100)

White Black Diff. Ratio White Black

1969 4,006 199 3,807 20,1:1 97 100 1970 4,329 208 4,121 20,8:!1 100 100 1971 4,633 221 4,412 21,0:1 101 100 IQ I I 19.72107) 4,9361. a 1A 257 4,679I.q A7Q !9,2:!101 110 1973 5,881 35Q 5;531 16,8:1 109 136 1974 6,974 565 6,409 12,3:1 117 197 1975 7,929 948 6,982 8,4:1 118 294

Source: Chamber of Mineso Aunnual Reports.

67. The pattern of earnings in other sectors of the economy also shows a similar narrowing of the earnings ratio between the two racial groups, though the substantial cash difference remains a striking feature of the national wage structure. In 197i, the average earnings of black workers in manufacturing, were three times greater than those in the gold mines, but this ratio,had fallen to 1.3 in 1975. The significance of the changing pattern of earnings within the mining sector, in particular between the gold and coal industries, and also among different sectors lies in the possible implications for the future demand for foreign migrant workers; an assessment of these implications calls for the examination of a number of isolated yet interlocking events which led to the dramatic change in the pattern of earnings since the early 1970s.. - 30 -

CHAPTER VII: RECENT DEVELOPMENTS AFFECTING MIGRANTS' EMPLOYMENT AND EARNTNGS

Mining

68. During the two decades that followed the 44 percent increase in the price of gold caused by the 1949 devaluation of sterling, the price of gold remained remarkably stable. Between 1950 and 1968, the price [IUVLCU LUULU I LLo-veredu arour.du RI25U cper L ounce,UE ~ fallir.gL L± g to ~ its ±.W~'lowest poir.tUIL of 11"A 24-.IL 'It .1.---n 1953 and reaching a peak of R 25.2 in 1968. Prospects for an increase in the price of gold, however, appeared in 1968 when the two-tier system was established to separate the official and private gold markets. In 1971, the average price received by the industry rose by 11 percent, and towards the end of the year, the Smithsonian Agreement, under which the US dollar was devalued for the first time in 40 years, led to the further apprecia- tion in the price of gold. The strong upward trend continued during 1973 and, by the end of 1974, the dollar price reached an all-time peak of R 137.08 per ounce (US$197.50).

69. The effect of this bonanza on the mining industry was to bring a number of marginal mines back into production and to intensify a new round of explorations. Because of the unilateral system of wage determination, a rise in the price of gold would not inevitably result in increased earnings in black mine workers. In fact, during the period 1946-51, when the price of gold rose by 44 percent, and the average white cash earnings increased by 12 percent, the real value of black earnings actually declined by about 7 percent. 1/ Without the rise in the price of gold during the early 1970s, however, an increase in real earnings would have been unlikely. The effective pressure on wages actually derived from the general shortage of mine labor towards the end of the 1960s, the main cause being a 45 percent decline in the recruitment of black South Africans (from a peak of 157,000 in 1963 to 87,000 in 1971) who were being absorbed at higher wages in such sectors as construction and manufacturing.

70. This development highlighted the increasing dependence of the mines on foreign labor which by the end of 1973, was 80 percent of total mining employment. The ensuing debate within the mining industry sought to resolve the issue of whether the mines should meet labor shortages by the traditional approach of expanding foreign recruitment, or by raising wages to a level where the minpe could compete morp effpctivplv with other ecrtors of the economy, particularly, construction and manufacturing. At this time, a nunhsbr of ePunts tonk place whirh influinratd the doicisnn tn raise wnaoes

I/ Frans.i T-4 'son, CUP, op. c - 31 -

First, a series of strikes in Durban in 1973 suddenly focused local as well as international attention on the low wages being paid to African workers. In the United Kingdom in particular, public opinion focused on the level of wages paid by British firms in South Africa, and as a result, the British Government appointed a Parliamentary select committee to investigate the labor policies of British companies there.

71. In the meantime, two further events were to aggravate the problem of labor sunnlv. The first occurred in Anril 1974; when a Chamber of Mines aircraft carrying Malawian recruits crashed near Francistown in Botswana, killina 74 mine workers. The Malawi nverrnment rearted sharnlv hv stopping further recruitment of Malawians. At this time, over 100,000 Malawians, or ahniot 27 nperent nf totnl fnreign migrants, were working on tho gold minas but by the end of 1975, the number had dropped to 3,000, and to fewer than 200 by June 1976. 1!

72. Secondly, iust three weeks after the Francistow- aircrash, a coup in Portugal toppled the regime of President Caetano and heralded the end of. thJe Portuguese empire in Africa. hl_esusequent independence ol Mozambique and the political ideology of the new Government added another e'lementL of uncertaiLnty regardi'ng 'labor supp'ly f'rom th'I's trad"L'tona'l source (which accounted for about 28 percent of total mining employment) whose workers were among the most highly skilled and experienced of the migrant labor force.

73. This combination of factors resulted in a substantial increase in the real earnings of African workers from 1973. By July 1976, labor strength in gold mines had been almost fully restored from a level of 25 percent below requirements in December 1974 when gold reached a record US$197.50 per ounce. The number of migrants from Mozambique (86,000 in mid-1974) rose to a peak of 107,000 in December 1975, filling part of the gap caused by the Malawi withdrawal; but by June 1976, the number had fallen to 68,000, and to 38,000 in April 1977.

Table 9: UNDERGROUND MINE WORKERS AS A PERCENTAGE OF REQUIREMENTS, 1974-76

1974 1975 1976

January - 74 91 July 89 91 96 December 74 81 -

Source: MLO, Johannesburg.

1/ Recruitment of Malawians for work in South African mines resumed in 1977. 74. The reason for the current decline in recruitment from Mozambique is riot altogether cLear; no orficial explanations are available, but some SOULI African commentators attribute it in part to a slowdown in the administrative and recruitment process in Mozambique. Other reports indicate that tne mining industry is gradually moving to minimize its risk by reducing demand for labor from this potentially uncertain source; and that traditionai arrangements (the Mozambique Convention) under which the Chamber of Mines pays the government of Mozambique the deferred pay of its nationals in the gold equivalent (at the official price) of their cash earnings are being reviewed. This method of payment currently spreads the costs across the industry as a whole; any adjustment which would shift the burden on to the individual mines themselves would probably be a disincentive to the employment of large numbers of Mozambicans.

Alternative Sources

75. Increasing black mine wages (from a minimum of R 0.72 a shift in 1972 to R 2.50 in 1976) was an important counter to the twin problems of a labor shortage and the fear of a labor boycott. But it was also part of a broader strategy which included a program for more intensive recruitment within South Africa itself, and the inclusion for the first time of Rhodesia within the labor catchment area. The publicity campaign waged by the recruiting agencies in the Bantustans through mobile cinema and radio, extolling the improvements in wage levels and working conditions in the mines, brought the mines into direct competition for labor with the agricultural sector. Traditionally, when the mines were faced with new shortages of labor, pressure was relieved by recruiting from still further afield outside South Africa rather than drawing workers out of agriculture. While commercial farmers would support limited recruitment by the gold mines to relieve unemployment in the agricultural sector, they took strong exception to any attempts at luring good workers away with higher wages. But although farmers were unable to counter the favorable publicity about iobs on the mines at cash wages far higher than many of them were paying their own workers, and to prevent men leaving with their entire families for the resettlemennt are2 (P.O Sada in the Ciskei or Witszieshoek in the Orange Free State), they did use their nolitiral nnwpr tn dplinpetep somp 7nes from which mine recruitment was excluded.

76. The combination of events during the early 1970s which led to an i.ncrease ir.mine wages, followed by active r-ecruitmen.t in tbe a-cutu.ural sector had a considerable impact, notably in the Natal sugar belt and in the fruit-growir.g areas of th-.,eWestern Cape wbhich h1-ave cometorlhevy on oscillating migrant labor from the Transkei and Ciskei. Agricultural wages were LorceU upwarlds, resulting ir a doubling of cash wages between 1971 and 1974, with a further increase in 1975. The outcome of this strategy on black SouthI African recruitmlent Lfor tne ILLLneb tso far, hlas been very successful; between December 1973 and June 1976, the number of black South Africans recruited by the Chamber of Mines rose irom 86,000 (20 percent of tne total African labor force) to 175,000 (45 percent). However, this increased recruitment occurred at a time of high black unempioyment resuiting from the current recession in the South African economy; the extent to which it will be sustained can only be gauged when full economic recovery takes place. - 33 -

77. in December 1974, tile Chamber ol Mines conciluded an agreement with the Rhodesian Government for the recruitment of up to 20,000 mine workers a year. As mine wages in South Africa were far higher than those in Rhodesia, the agreement precluded the recruitment of workers who had been engaged in local mining employment during the previous year. Thus, from a position of net importer of labor ever since the First World War, Rhodesia has become a net exporter of labor, sending 25,000 migrants by April 1977. Recruitment from the BLS countries also increased substantially, by 26 percent between 1974 and 1976. In absolute terms, the increase was greatest in Lesotho, but in the other countries, where migration is on a smaller scale, the number of migrants increased by one third to 26,000 in Botswana and doubled to 12,000 in Swaziland. In April 1977, the BLS countries accounted for 32 percent of total mining employment, compared to 25 percent in 1974, and 67 percent of total foreign migrants. The main changes in the pattern of labor supply since 1974 have been the rise in the number of Rhodesian recruits, the virtually complete withdrawal of Malawians, the sharp fall in the numbers of Mozambicans, and the significant increase in the recruitment of local Africans. There are indica- tions that the success of local recruitment has led to some slowdown in the hiring of foreign migrants without previous experience in the mines. The following table shows the geographic breakdown of black workers employed on mines affiliated to the Chamber of Mines during 1969-1977.

Table 10: EMPLOYMENT BY AREA OF BLACK MINERS BY MLO 1969-1977 /a ('000)

Year S. Africa Lesotho Botswana Swaziland Mozambique Tropical /b Total

1969 116.5 6=- 14 8 5.0 99.8 69a9 371.1

1970 96.9 71.1 16.3 5.L 113.3 98.2 &01.2

1971 86.5 68.7 16.0 4.8 102.4 129.2 414.

1 Q79 Q7 9 7Q 1 7 A - Q7 7 1)90 9 I.A^

1973 86. 2 87.2 16.8 4.5 99.4 128.0 422.2

1974 9A.1 708. 14.7 5.5 101.8 73. 163.5 ~~Li*~~ ILi._ i . I -.J.a .IJL . U I-) . .J UJ.

In 7 II)1 0 a~ r.1 £ 7 11 11 0 A i , 1975 IT..1..\~ 121.o 00. a 7.2 18.A0 IJ.J 364. 7

1976 (July) 174.6 88.3 25.9 I22.1. 68.4 39.. ,

1977 (April) 217.1 100.0 24.8 11.8 38.2 28.7 420.5 /a Numbers at 31st December up to 1975. Figures for 1976 and 1977 not strictly comparable because of seasonality. /b Defined by the mining industry as those parts of the African subcontinent lying north of latitude 22°S. Up to 1975, mainly Malawians; since then mainly Rhodesians. /c Employed in gold, copper and platinum mines. Sniurce: Mine T.Lahr Organniztrinn (WENELA) Annual Reports= - 34 -

Consequences of Change

78. Having examined the main changes in the pattern of wages and labor supply in the gold mines we consider the possible consequences of these changes for future employment. It should be emphasized, however, that any assessment of future demand is largely tentative, given the nature and uncertainty of events which, over the years, have influenced the supply/demand situation in the gold mining industry which accounts for over half of mining employment. The following table shows employment by racial groups in the gold mines over the period 1969 to 1975.

Table 11: EMPLOYMENT IN GOLD MINES, 1969-75 1/ ('000)

Employlment Year Total Black White Ratio b:w

10t0 a.l0 2 I. ') '20 7 0~.

*,, JV V Jo-). v V J,. v ., , V. .I. 1970 416.8 378.1 387. 10.8:1 I n7n Q Q1W0. fN 70Q

1972 405.A~1 368.0 37.1 9.9:l1

1973 422.6 38J.6 37.0 10~~~~~~~~~l.'4:1

1974 ,9.1ifo59.2 .36. 9.7:i

1975 370.6 333.4 37.2 9.0:1

1/ Average number employed during each year.

Source: Chamber of Mines, Annual Reports.

79. A number of points emerge particularly when viewed against employment trends in earlier years. Since 1960, the number of white employees declined steadily from 50,000 to 37,000 in 1974, the lowest level since 1945, but rose slightly in 1975. The pattern of black employment over this same period was more uneven. From a peak of 399,000 in 1961, employment gradually dropped to 362,000 in 1967. Thereafter, the level fluctuated; it increased to 386,000 in 1973 as the rapid rise in wages began to take effect, but fell again to 333,400 in 1975 (partly the net effect of the Malawi withdrawal) the lowest level since 1955. While black employment decreased by 8 percent between 1969 and 1975, the minimum wage increased sixfold over this period. - 35 -

80. It is difficult to assess the imDact on the future emplovment level or on the racial composition of the mining labor force following the sharp upward trpnd in wneps in rerent year Whlile in 1969 i-hp averag earnings of white workers were about 20 times greater than those of black workers, this AdfferentI4a1 had drnnnop tan hnut A timos ao mucoh in 19Q7S. Over the same period, the employment ratio of black to white workers remained around 9 to 1. At the same time, other relevant variables affecting employment such as the price of gold, capital costs, stores, etc. all rose at different rates. It 4s no, yet clear whethler the d-ecli4ne in employtment since 1974 reflects A. t . L u L CI.tt a i .tC i 1S. LLC £1 Chj LtJ L 0 £L ~ t 1 .7I CL_ CL L changes in supply (e.g., the Malawi cut-off) or in demand (e.g., management shale-up to reUuce labor costs at a time oUf rapidly rising wages) or some combination of both. The difficulty is further compounded because such recent changes caninot yet be identified as part of any underlying trend.

81. Nevertheless, it seems likely, unless there are furtner spectacuiar discoveries of gold or substantial price increases, that employment in gold mining has passed its peak and may decline still further in the longer run. There is no doubt that significant rise in real wages combined with uncertainty over the possible future instability ot the labor torce (whether because of political decisions by sending countries, compound disturbances and walkouts 1/, the future of gold, or a combination of these factors) have influenced the industry to launch a long-term research and development program for greater mechanization.

82. Assessments within the industry differ greatly as to the extent to which it will be possible to mechanize gold mining. There are some who argue that the special geological features of the ore body, such as hard, narrow, discontinuous reefs two miles deep, place severe limitations on any alternative techniques that could be developed. Others indicate that by the end of the 1980s, new techniques could be developed to reduce labor substantially. Much depends on whether a dramatic breakthrough can be achieved with some new way of cutting rock at the stope face. It might be assumed that the number of men employed per unit of ore hoisted will gradually decline as old, more labor-intensive mines (such as East Daggafontein) are closed and new more capital-intensive mines (such as Elandsrand and Deelkraal) are opened. The feasibility of changing the production techniques in response to changing relative prices of labor and capital is severely restricted once a mine has become operational. Nevertheless, new ones will tend to be more capital- intensive through the normal advance in technology; the general consensus seems to be that within the next two decades, employment on the gold mines will continue to decline. One guesstimate from within the industry is that the number of Africans employed by the gold mines around 1990 would be about 200,000 men, approximately 60 percent of the 1976 complement. However, some increase in mining employment is expected from the expansion of base metals such as platinum, copper, iron and chrome.

I/ Fnr A dpRrrintinn nnd 2nn:lvqi nf thp wnvp nf rnnfrnnt-nwtinnQ thnt spread through mine compounds from September 1973 see: Dudley Horner and Alide Kooy; Cornflict on South African Mines 1972 - 1976, Saldru Working Paper No. 5, Cape Town, August 1976. - 36 -

83. However, any overall future reduction in employment does not mean that employment of foreign workers will necessarily decline. If for example the price of gold should fail to rise whilst inflation increased production costs substantially, the industry could well find itself allowing wages of black workers to decline in real terms, as happened after the first World War; in such an event, higher wages particularly in manufacturing and construction, would reduce local recruitment and increase demand for foreign migrants. In addition, on an individual country basis, a reduction in recruitment from one source. e.g. Mozambique. could lead to an increase in demand from other sources, e.g. Lesotho and Botswana. Between 1973 and 1975, for Pxamn1pe dipenite a derlinp in total hblck emnlovment on the aold mines of over 50,000 men there was a significant increase in the employment of Rhoregian Africans=

84 T compt-irnnThe doma.ndc for Ibhnr hbt-weaen mining and narirciiltiire could also lead to increased foreign recruitment. If the mines became more aggressive in4r ecrut.g local 1abDor., pa clarly from agricult-ur,41 farmers might be unwilling or unable to match the higher wages and seek to employ more foreign migrants, c throuu * * crXX - oo _as _ *i _;-. eL some other parts of the world, such as California, the agricultural sector may empLoy more adLU more illegal migrants, whose prese,ce on fLarms is far more difficult to police than it would be in a highly concentrated and centralized sector such as mininng.

85. This scenario whle illustrating the range o' factors which are likely to influence future demand for foreign migrant labor, underscores the tentative nature of any assessment in the absence of detailed research. - 37 -

CHAPTER VIII. IMPACT OF MIGRATION ON THE SENDING COUNTRIES

86. Any analysis of the national costs and benefits of migration is likely to be controversial particularly in assessing its social and political implications. But even on the purely economic side, there are a number of difficulties in assessing the consequences of a process of oscillating migration which has gone on for many years across national boundaries. In this chapter. we examine some of the more direct and immediate benefits of migrant labor before addressing some of the consequences that are more difficult to quantify but no less real in their negative effects.

Return Flows

87. Return flows from migration consist of deferred pay, postal remittances, and goods and services brought back by migrants. Reliable estimates of total flows are not available, mainl1y beaue f thein lack o-f andequa-te data on migration for non-mining employment (mainly in agriculture and services), wh4ch is corsidered substantial, particularly from T,-eoho. D4 --. - - -- through the MLO system, which represents about 70 percent of the total labor f:orce inmining, are shw,-or the ---io T-nuary=December I975r J.AJLL LU L1..iL..It, dLJ.~- QLIULJ.L J.V.J. ~Ll1_ FJ_L_LUU ~~ICJJ ~_-W~, .L 7I.J .

Table 12: NUMBER OF MIGRANTS ON DEFERRED PAY SCHEME AND

AMVUN-. rPAiDL'4ON RETIuiRR - JJNuirm I L-u '.IB, 1I97

Average No. on Amount Paid Average Amount per Deferred Pay (Rm) Migrant (R)

Lesotho 85,130 i0.0 117 /a Botswana 23,202 4.1 /b 176 Swaziland 16,337 2.6 159 RSA 88,902 11.8 132

/a Reflects the exclusion of the first and last contract months from compulsory deferred pay.

/b Estimates by Botswana authorities are R5.9 million.

Source: MLO, Johannesburg.

88. In addition to the deferred pay system, migrants use a number of means, such as the postal and banking system, returning friends, cash in hand, and goods purchased, to transfer savings and real resources. Estimates

1/ Additional remittances from previously accumulated deferred pay were R 8.1 million; no country breakdown is available. - 38 -

of total flows by MrnDwall indiratpd that in 1972173- RBnathn migrants repatriated almost 70 percent of their earnings. 1/ No comparable estimates have been made for Swazis or Batswana, hbit a imilar npttern of remittanres is likely to apply.

89. Migrants remittances have improved the living standards of a large segmeit ofL the population. of the BLS countries, most particularly in Lesoto. In 1972, when the minimum wage for a miner was R 0.50 per shift, and annual mLinLingllLLiiL~ recruiLtmentLI.LULU1 about4auL U L. 10,0LU'J'JUi L.n Lesotho,L~ILLJ theL-IL 'eve'L ofULL migrants'L. IL tranLsfersLdILL (including goods) of about R 16 million; this compared with total government recurrent revenue of only R 13 million. With the substantial increase in the current minimum wage to R 2.50 per shift, and the number of migrants employed in mines at a record of about I2u,uuu, the impact of transfers on the domestic economy has increased significantly. While negative domestic savings have long characterized tne performance or tne Lesotno economy, tnis gap in resources has been more than offset by migrants' remittances, which largely account for a level of national savings equivalent to about i5 percent ot the gross national product. In addition, about 25 percent of the total value of imports represent goods purchased in South Africa and brought back directly by returning migrants; since these goods form part of recorded merchandise imports, they enhance the Government's receipts under the Customs Union Agreement. It is important to note, however, that given the extent of economic dependence, such purchases generate further employment in South Africa rather than in Lesotho.

90. In Botswana, prior to August 1976, the significance of remittances was largely related to their income effects on farm households. However, with the establishment of a Central Bank and an independent currency, migrants' remittances could become increasingly important in supplementing the country's foreign exchange earnings. In 1975, estimated migrants remittances were equivalent to about 7 percent of merchandise exports. Swaziland has so far been the least dependent on migration, but the doubling of recruitment in the last few years is a significant new trend.

Table 13: ESTIMATED FlNANCIAL RETURNS FROM BASOTHO MINE WORKERS DURING A 12-MONTH PERIOD 1972/73 /a

Rm %

Deferred Pay 3.4 215 Remittances 5.8 36.6 Gash in hnnd 2.8 17.7 Goods 'in hand' 3.9 24.2

TOTAL 15.9 100.0

Source: M. McDowall, Basotho Labor in South African Mines, op. cit.

1/ M. McDowall, Basotho Labor in South A-rican ir,es';, Up. cit. - 39 -

91. The above tahla shnow the actimated value of cash and goods that returned to Lesotho as a result of the migrants' work. Similar studies need to be undertaken in other sending countries in order to obtrain correspond4ng estimates of return flows. Whilst return flows in the form of both cash and goods are an important and measurable benrefit of l1a,b mig4r--tio there are also some other consequences which are difficult to assess but which are r.ev-.erthLe'less extremely important. OUre of these concerr.s the LLUpctLL Uo lab migration on agriculture in the sending countries.

Agriculture

92. The absence of men from farms reduces the available labor supply, but increases the farm households' total resources if migrants' remittances, accumulated savings, and goods brought back exceed what would otherwise have been produced. Tne effect of a reduction in the labor supply on tarm output is difficult to assess. The demand for labor in agriculture is subject to considerable seasonal variation, and production may be greatly influenced by the timing of the departure and return of migrants. The effect will partly depend also on the marginal productivity of labor in agriculture. If this approximates zero, because of over-population on the land, as is probable in Lesotho, then the absence of migrants may not adversely affect output, but could result in increased per capita consumption. However, even if in the short-run the marginal productivity of labor is zero, the absence of the more enterprising farmers could slow down the modernization and expansion of the agricultural sector.

93. Statistics from the MLO show that migrants plan their arrivals and departures so as to ensure an adequate labor supply on their holdings at peak periods. Thus, in Lesotho for example, between January and May, the majority of migrants come from the lowland areas; men in the mountain areas are engaged at this time in the harvesting of wheat and peas, and in the shearing of sheep and goats. But during the following three months, when it is harvest time in the lowlands, most recruits come from the mountain region. In September, the lowlands aRain provide most of the recruits because of ploughing time in the mountains, while from October to December, the situation is again reversed with most recruits coming from the mountain areas. Over time, a clearly identifiable migration cycle has been established. This seasonal pattern of migration casts some doubts on the assertion that plouRhing by boys and women has become widespread, and that men increasingly supervise rather than directly engage in agricultural activity.

94. Whilst boys might nlouigh less efficiently than men- thp Rnme should not be assumed for women. However, even though men may be present at critical neriods during the agririiltulral cvcleP their rpriirring ahsenvct probably result in some conservatism in household farming methods and in the rhonir of rrnnos The crucial farming decisions might still be made by men rather than by women; in such a case, it would reduce the effectiveness of the Agricultural ExtensioV Service in persuading farming households to adopt change. Some recent evidence suggests that the absence of men does in fact reduce agri.ultural output substanL.ally. I/

/ G.LL.L TnTbLstULL, VU "les to the De-velopment of Trar.skei Agrilte, Capetown, SALDRU Farm Labour Conference, Paper No. 26, 1976. - 40 -

95. In Lesotho, few farm households grow enough to support themselves even when the cash earnings from the sale of crops, livestock and livestock products (meat, wool, mohair) are taken into account. In the Thaba Bosiu Project Area, provisional results of one survey show that 80 percent of farm household income was derived from off-farm sources; in addition, the country-wide sample survey of 1973/74 found only 4 percent of arable land left fallow, thus indicating some degree of population pressure on the land. 1/

96. Although traditional aariculture in Lesotho is characterized by low productivity, which could be partly attributed to migration, the extent to which migration is itself snurred by low nroductivitv calls for further research. On the one hand, migration offers a less risky alternative to spinnlpmenting inonme than the addtionnnl effnrt reniuired tn incrreas farm output; this option has been progressively exercised to the point where an off-farm supplement to farm household income has become an absolute necessity. On the other hand, the pressure of population has expanded the frontier of cultivation to more and more marginal land. If therefore the unit to migrate, especially in the case of Lesotho and Botswana, is removed, the only prospect for avoiding a s4g.niJf4cant 'fall in the sLtanAarA of 14.if 4i the short-run lies in more intensive agriculture.

97. In Swaziland and Botswana, there has not been a substantial decline, comparable to that innesotho, 4n th±e output of..agrc.ulture. Both1Ucountries have more favorable ratios of population to land, though Botswana has ex- perL±enced a sim'LUar extensLonL OL the 'rLontLer ocuiltivationt to that of Lesotho. But the arguments earlier relate equally to these two countries. in choosing to migrate, people weign tne alternative opportunities of raising houshold income either by seeking to increase the output of their farms or by supplementing that income by migrating. Rising wages in Soutn Africa, unmatched by comparable opportunities to increase farm incomes at home, have tilted the scales in favor of migration.

Education and Skills

98. One of the less tangible effects of migration is the cost inherent in the transfer of a readily productive resource (labor) from one country to another without the latter bearing any of the costs (education, health, training) of its production. In the BLS countries, while the majority of migrants are considered unskilled, reports indicate some migration of skilled and semi-skilled manpower, particularly from Swaziland and Lesotho, following the significant wage increases in mining in recent years. 2/ Currently, little is known of the educational and skilled levels of the migrant population. The recent introduction of a job tracer system for secondary graduates in the BLS countries should provide some insights into this alleged new trend.

1/ Agricultural Production Survey, 1973/74, Bureau of Statistics, Maseru, April 1975.

2/ Reducing Dependence, ILO, op. cit. - 41 -

99. The policy implications call for determining an 'aDDroDriate' level of investment and manpower training given the leakages of skills through migration to South Afrira. In Lpeothno for exAmn1p. rpriirrpnt Penpnditu,re on education represents about 27 percent of the Government recurrent budget and hboiit 11 nercent of nlannnd inuPvtmPnt irntir thr RprnneI Natinnal nD7ae_ opment Plan (1975/76-1979/80). Because of the critical shortage of technical and skilled mTannower at- all I evel s t-he BLS countrie hair- r vn hci,h pro-I ity to manpower training. Given the opportunities for skilled employment in South AMfrica, such training enhances-A migrants' earning capacity, thus increases remittances; at the same time, skilled migration tends to slowdown th.e pace of Aomes`i development bywaenrgimlmr,ain.aa ~L~LJICL.LL_ ~=VJUZ~IM_LL U,F W=C&&=LL.LLUr ±mkI±LIue[iLd-LLC..LULL UUpa- city. In addition, the recurring absence of large numbers of the 20-45 age group on whLL.ich traLining programs will bue largely concentratedU, makes long- term manpower planning difficult, particularly in Lesotho. Government policy or, education and training must therefore assess the effects of maximizing remittances through skilled migration, and expanding training to accelerate the supply of skills necessary to impiement development and iocailzation programs.

100. In Lesotho, where the problem is most acute, the country is already producing more graduates at the lower-secondary and upper-secondary levels than it needs for its own manpower requirements. But the main cause of the domestic manpower shortage is the wage differential between jobs in South Africa and jobs in Lesotho, not a lack of education and training in Lesotho. While the Government has only recently begun to tap the earnings of migrant workers through the deferred payment scheme, it must continue to explore ways to share directly in the returns from the productive investment in its migrant labor.

Bias in Pattern of Development

101. So far, the argument about the effects of oscillating migration sustained over a long period of time have been fairly straightforward. Men go off to the mines because by so doing, they can improve their material position. Seen from a macro-regional perspective, there is a transfer of labor out of agriculture into mining; resources are allocated more efficiently and output increases. The sending community as a whole (including migrants) benefits although there may be redistribution of income which leaves some worse off. However, there is another consequence of this migration which merits serious consideration, namely, the bias in the geographic location of capital accumulation which such migration causes. The importance of this bias becomes apparent when one considers the impact of a national boundary between the migrant's home and his place of work and also the capacity of an economy, within national boundaries, to generate iobs and incomes. Ultimately, this capacity to generate employment at a "reasonable" standard of living depends upon the capital accumulated in that society both in the form of material goods such as roads, dams, and factories as well as in the form of appropriate "know-how" or resnonsiveness imbedded in neonle through education. exnerience and the social structure. What then is the long-term impact of a migrant - 42 -

labor system on the nrnopcs of ranital fnrmAtinn- nnd henrc ranntA y tn generate development, within the sending country? There are a number of differert factors which we shall consider brieflvy First, migrants' expendi- tures near their place of work generate jobs in South Africa for the produc- t-ion and sale of the goods bought. Thus, one consequence of oscillating migration is to hold down substantially the 'multiplier effect' in the sending country bVe'low wrhat- it- would be if migrant's ---re a-ble to spend more of thIAe ir money on home produced goods. Second, there is the question of the use to

,,I .L,LIL: L1~ bLi 4.4Ld . o A .J.U~L OU,i _~~1f~U .O4L. L J- jJU 4 AJ I LA 4- WI. .XL __I_ is over and above the due payments such as interest, dividends and wages to alL factors of productior. - Ls ger.erally seen as belongir.g to tLe wIole community and is not regarded as the sole property of any one factor; but rather thfe fLruit of Joint proUuct.

102. But in practice, this 'social diviaena is spent on roads, education etc. only within the political boundary of the nation in which it was collected. Tnus an economic infrastructure is built up by one state within boundaries that are more limited than those of the labor catchment area. Yet where oscillating migration has taken place over a long period of time there is a case for arguing that for the purpose of sharing the benefits of migration more equitably, the national boundary should not always exclude the sending countries from funds which they have helped to generate.

103. Through this localized expansion of markets and the political limitations on the geographic extent of state expenditure, the process of oscillating migration serves to intensify the bias of development in favor of the core, that is, South Africa. This bias, built up over eighty years or more, is as much an effect of migrant labor as are the return flows or the impact on agricultural production discussed earlier in this Chapter, and should be duly considered in formulating a policy for regional migration. - 43 -

CHAPTER IX: TOWARDS A COORDINATED MIGRATION POLICY

104. One of the most surprising aspects of international relations in southern Africa is the absence of any coordinated agreements between countries which export labor to South Africa. This omission is all the more notable when seen against the long-standing and increasingly sophisticated financial arrangements between the countries which form the Southern Africa Customs Union. In view of the magnitude and long history of migration, sending countries such as Botswana, Lesotho and Swaziland should consider whether the terms on which labor is supplied are open to negotiation. Despite the complexity of the situation, some tentative proposals are put forward for a mOre rnmnrehenqive and coordinated nolicv on migration; and for an assertive role by the sending countries in forging greater collaboration on migration with South Afrira. ARsniatepd with these nrnnopals are qsggestionn for further research necessary to illuminate the way ahead.

The Case for a More Comprehensive Policy

105. There is a pressing need for each government to create an official m4gration portfol14, pOssily w4ithi.n the Department of Planning or Ministry of Finance, and to delegate to a senior professional responsibility for s-imulatir.g an' coordiuating -le de-velopment of a comprehensive policy o L..LIU L~ L.LL dU U ULU.dL.L L. L_II uV JAjULIi JJ. G U.JIjL LLLJV JJ%.L.L_y ULJL migration. This recommendation derives from the obvious gains that have aLreaUy accrueU to the BIAS countrLies as a resu.Lt ofL thle intensive work which the respective governments have, since independence, put into negotiating revisions o'L the Customs Agreement wi South ALfrica. ThI'Lat agreement justifies further work in developing an analogous accord relating to the consequences of the flow of labor between the countries. The former aemon- strates not only that the less developed countries can achieve substantial economic benefits despite wnat might appear to be a weak bargaining position, but also the notable precedent that compensation should be paid to these countries when it can be shown that they suffer some economic disadvantages as a result of these specific links with South Africa. In the case of the Customs Agreement, the customs and excise revenue accruing to each country according to the basic revenue-sharing formula is increased by a factor of 42 percent in order to compensate the smaller countries for the negative effects from economic association with a larger and more developed economy. The compensation is based on an estimate of the extent to which polarization in the process of economic growth tends to favor the core at the expense of the periphery; such polarization for which compensation is being paid results from a common market of goods only. It does not take into account the common labor market which has existed in one form or another for over eighty years. These flows of labor across national boundaries have had the effect of polarizing development heavily in favor of South Africa, and there is a case for arguing that some compensation, analogous to that paid under the Customs Agreement, should be negotiable. - 44 -

Policy Proposals

106. We consider some of the possible components that would need to be examined and ,-.-,en negotia.ted policy-1 unf T fi need- 4 for e the governments or other organizations representing migrant mine workers to

ai;e U:LweeU :dAlI ULIotLh soU Lo ue u e tLU UULUoLLoiLn nIegiLatLioUU W.LL1 mine employers, who have long formed their own coordinating body, the Cham- ber of Mines. Such an inter-country committee would be able to prevent one country from being played off against another. It would also ensure that such matters as attestation fees, deferred pay, and tax arrangements i/ were standardized. It is possible that such a committee would develop to the point where it could eventually negotiate wages and other conditions of employment.

107. For example, negotiation could be extended to securing improved benefits to families of workers killed and to disabled workers themselves as a result of accidents in the mines. At present, such benefits are related to the level of a miner's earnings at the time of his death. But if the accident rate is comparatively low, it might be possible for an insurance scheme to be devised which would cost the mines relatively little per employee, but which would ensure a considerably higher compensation than is currently the case; the wider question of social insurance could bear further investigation 2/

108. Perhaps the greatest potential for constructive negotiation between sending countries and South Africa is that of harnessing resources accruing, at present, to the core in such a way as to generate income and employment in the peripheral countries. The basis for negotiating a different growth pattern of the southern African economy and enhanced benefits for labor exporting countries arises not only from the existing capital accumulation which South Africa derives from imported labor, but also from the historic benefits derived from oscillating migration in previous decades. The following table shows the approximate number of man-years invested by different countries in the gold and coal mines of the RSA since the Second World War. Over the thirty years 1946-1975, black miners worked approximately 10.7 million man-years. In gold mines alone; the totals were 10.4 m. black and 1.3 m. white man-years. 3/

1/ This latter might require negotiation with the RSA Government rather thar. the- Chamb-er of Mir.es.

1/ lee 'or a brief lescriptlon of in4ur4es ar.d Aealths in C.A. mines: DnuAley 1./ LUA IJJ.±LU OLJ A.. L.9 LLSL SL . J U L ~ LU SAu . O L I A .ULIA ~ JU.Ly Horner and Alide Kooy, Conflict on South African mines, Capetown, Saldru Cf7L -- n_'1 I a L~ I7 Working Paper No. J, 96, pp. a,a 447.

- . f_C_mE__ r MnsJ ____u_1 np_ if/ UI1allDtL Dl UllUtS BlillUd.X L'st/U L Lb . - 45 -

Table 14: APPROXIMATE NUMBER OF MAN YEARS (BLACK WORKERS ONLY) INVESTED IN MINES, MEMBERS OF THE CHAMBER OF MINES, 1946-1975

Area of Origin No. of Man Years %

C>as~~~~~~~~~~~~~~~~mo{m4 11 v4 I 4

Ciskei and Transkei) 3.6 34

Mozambique 3.0 28

"Tropical" (mainly Ma.law') 1. in

ILesotho 1.0 Id

Botswana 0.4 4

Swaziland 0.2 2

Total 10.7 100

Source: Mine Labour Organizations (Wenela).

Notes: 1. Discrepancies due to rounding.

2. These figures refer to all large gold mines, coal mines of the Transvaal and to one or two others (e.g. Lohnro Platinum) but not to most other mines such as diamonds and copper.

3. Numbers are of those employed at the 31st December each year. For the purposes of this table, we assume these to be constant throughout the year.

109. Countries such as Mozambique and Lesotho, and other countries which have invested 7.1 million man-years in the South African mines since 1946 (to say nothing of the millions of man-years in the sixty years before that) would seem to have some legitimate claim on the resources generated by the mining industry, over and above the amounts paid in wages to their migrants. In view of the wealth generated by migrant labor in South Africa, there is a reasonable case for a substantial contribution by South Africa to the development of these labor exportinR countries.

110. If this view should become more Renerally acceptable as the basis on which to negotiate a structure of growth that was less biased in favor of the core, along what lines should the peripheral countries bargain? There appear to be two main areas of negotiation. - 46 -

111. The first relates to the difference in capacity between South Africa and the countries on the periphery to generate income that even a small transfer of the tax revenue from sectors to which labor is supplied could enhance substantially the ability of these countries to build an economic infrastructure. For example, in 1974. the combined Gross National Products of the BLS countries was about $550 million, while in 1974/75 income tax paid by the aold mines alone was anproximately $800 million; in addition, gold mining leases accounted for $260 million in Government revenue.

112. The other area of negotiation lies in the field of markets. We illsiQtratp the nAceihilitipe with a snprifir eYrmnle. Supnnnp that Lesothn negotiated a guarantee to the effect that for every thousand Lesotho migrants employed on the minac in ai-uan year South Afrirc woituid niirrhae a rcrtain quantity of specified commodities, i.e. vegetables produced in Lesotho. Suppose further that, in eAdition to guaranteeir. a morket, Sot.h Afr4a also- agreed to help provide investment funds either from a share of tax revenue or from reLtained mining profits.; such an arr a n gement would remove two of the most critical barriers to development namely, funds for investment and amark.et ign 'hchto sell th-e fir.nal product. Counttries that h-ave been a ma L L. WLI.L LL L. L IL. L.LL L . . jL uU L. .LLL #-LI LLL developed as peripheral areas have the potential to use the core country's

eedu of their labor as an LUportUaL-1t UoL1bid'UeraLtLo in1- U-L±L±- L'Lfor a more even shape to the pattern of economic growth in southern Africa. Because ofz tLue d0minCan-cCe of the South- African economy, su.h arrangements wou'ld not necessarily cost South Africa a great deal. But a regional industrialization policy which would increase labor-intensive production could significantly enhance the sending countries' capacity to generate employment and income and accelerate development.

113. Commodities on which attention might be initially directed are meat, leather and boots in Botswana; timber, especially poles in Swaziland; and vegetables, bolts and nuts in Lesotho. - 47 -

1m-Ir . T7AT W f%' Lt'T Dlf"I'Tk1 nV&%XfIT%TIT1V 'P ~T,~ abUle la. V'lAUtJE UN .0LEC,TE. TwCKALODITIES U MED0LJJ BY THE GOLD MINES, 1975

Commodity Value

Beans & Peas (dried) 2,160

Sorghum & sorghum products 8i0

Maize & maize products 3,411

Meat (incl. offals & fat) 15,704

Sugar 750

Fresh vegetables 1,539

Timber (incl. Poles & laggings) 45,392

Boots (leather) 512

Clothing (incl. protective jackets) 6,361

Furniture (incl. office equipment) 4,700

Bolts, nuts, rivets and washers 7,973

Locks, hinges & Ironmongery 422

Nails, screws & pins 597

Source: Chamber of Mines Annual ReDort. 1975.

114. While the linkage of migration and industrial investment offers possibilities for accelerating development in the labor exporting countries, nrosnects for Imnlementatinn will dnepnd lareelv on nolitical considerations. Such a program would no doubt strengthen the economic links between South Afrlca and the peripheral countries nrnhnhly at a time when poliry in the latter is being directed increasingly toward reducing the current level of economic dependence on South Africa. This deper.dence is most severe in Lesotho which will continue to critically rely on migration for the fore- seeable future;r,everti-heless, in the s.or rt.run the Governments should ser- iously consider ways in which migration could further contribute to domestic development.

1 1 CZ MI Cllp-e Ias_ -- -- m o-C _1- -_tOLO4- ns .U4 I -1 __ __

* *L. L.Ls D LLa JCL LIOCD =Za U1.LL1= DU J.U LIM U L.LLUIID WLL.LLlL LCaUUL AJJULJ L.bLL countries might explore in an attempt to maximize the returns from migration and to influence the future pattern of economic growth in order to reduce - 48 -

the marked regional inequalities. Greater cooperation among the sending countries is essential if these objectives are to be achieved. Currently little formal or informal consultation takes place on migration policies, and contact is usually limited to ad hoc enquiries for information on specific issues. Local practices and policies in connection with migration are not, therefore, generally known outside each individual country. Sending countries should foster a regional approach to migration while giving it greater emphasis in development policies.

Further Research

116. Migration is a complex process and ongoing research is essential tn tho fnrm112nt-inn nf pnlicvy Tn this regord- thp nrnnqpoed stahlishment nf an Institute of Labor Studies in Lesotho is a step in the right direction and deserves international support. It is necessary to emphasize however, that governments should clearly define their research needs if the design of researchl programs is to focus effe.tively on n.ational policy. Aresearclh program might include the following elements:

(a) Since the decision to migrate is a function of aL ternatveL opportuntites, 'or anyone w`LLo has once worked abroad, migration may continue to

be the optiLmaL cashl CearninL g UppUlo LUnitJy uULsUid agriculture. Migrants are hardly a random sample of adult males but will almost certainly prove to be from families and locations which research would reveal to have special characteristics. This whole question of precisely who migrates needs to be further explored. In none of the countries is the decennial Population Census used to update on a national basis the migrant labor situation. Given that even in Swaziland no less than 17 percent of adult males work abroad at any one time, this lack of detailed attention to the sources of migration needs to be re- dressed in future research.

(b) The economic consequences of a substantial reduction in the flow of migrant labor. Malawi's experience since 1974 of apparently re-absorbing some 120,000 migrant workers is of great importance and needs to be understood far more than it is at present.

(d) The level of education and skills of migrant labor.

(e) Country snecific feasibility studies on selected commodities consumed by the mining industry. - 49 -

fLJL ie recordus ofL thie recruLtiting agenc'Les Lin each country are ready to hand, and could prove a rJAc I'L source JLor muchl' ofL the basic information required. The Central Statistics Offices in coliaDoration with the local universities should be encouraged to give priority to researching these records.

(g) While the material benefits (employment, remittances) from migration are obvious, it is generally recognized that its social effects could represent a substantial cost to the development effort of labor exporting countries; however, there is no ongoing research into the impact on development of this less tangible problem. For example, the recurring dislocation of traditional family life through the absence of heads of households; occupational and health effects of mining employment and the social charge to governments; education opportunities foregone by children who must assume greater household responsibilities such as farming and livestock rearing; the psychological effect on the enterprise (so essential to nation building) of migrants towards domestic development as a result of prolonged exposure to an environment which severely limits the social and occupational advancement of their counterparts. The Human Resources Laboratory of the Chamber of Mines Re- search Organization is undertaking psychological and attitudinal research on the black labor force of the mining industry. Communication and exchanges between country researchers and this instituutinn would be mutually beneficial and should be explored.

117. More generally, as part of an ongoing research program into the whole migration nroress; the hbair inter-relatinnships between migration and agriculture need to be better understood. Emphasis and priority in research wounld dpennd nn countrv rircuimstanr's, huti a study aonna the fonllwina line1 would be particularly useful in Lesotho. If we trace a cohort of departing mirantQ4 ftn the mines in SouithiAfrica while 1InkIng simultaneoUsly the activities of their farm households, this would permit the analysis of household behavior patterns, particularly in relation to subsistence prouA.-i-4 r The sampling frame would be constructed from the records of the recruiting agen-

ci_es of the MLO, andA hlouseholds could be 4nterV4 eweA tW4 ce dlur4 n g the contract period, which is about 6 months. Briefly, the survey would cover the follow- inmag i areas of houseeold activity: managemen, Aecision process, ctiv=U4 tion methods, inputs and output, cattle and livestock, division of labor,

remiLttances, i,vestment, role oflJ.ILn extension service; Cetc. the light of the Government's emphasis on rural development, and the extent of migration, the resu'Lts should provLUe esse,tiala benci rIark Udata Lor GUovernment policy in agriculture and migration. Such a study could either incorporate or dovetail with research already mentioned. - 50 -

118. Current issues in Swaziland and Botswana al'so empLhasize the impor= tance of policy-oriented research in shaping Government policy. The following examples illustrate this point: In Swaziland, increased recruitment during the past two years coincides with a labor shortage in agriculture, in parti- cuLar, sugar cane cutters an.dirrigators. Lhe sugar cane prouucers hLIave Lounid this shortage perplexing, since their own preliminary investigations indicate a favorable competitive positioLn (in pay anud living conditions) with that of the sugar cane growers in South Africa. They emphasize that unlike the situation in South African agriculture where workers live in single quarters, the Swazi industry provides for family housing, rations, and medical attention, in a familiar environment. They favor the institution of a system of deferred pay in the sugar industry similar to that in mining as an incentive to recruitment or, alternatively, more positive action by the Government to discourage migration.

119. The South African sugar cane growers at Pongola, near Swaziland's western border, have the advantage of proximity to one of the poorest areas of Swaziland. People in this region might have been obliged to work on Swazi sugar estates, were it not for the alternative--and clearly preferred option--of crossing the nearby border and working in South Africa. Some workers are provided with daily transportation, while others commute on a weekly basis. There is therefore no prolonged absence from home such as would occur if they went north to the mines; this employment pattern is reflected in the 1976 population census which showed this region to have the highest concentration of persons classified as temporarily absent.

120. The provision of family housing as an incentive to the creation of a stable labor force is probably less attractive than generally recognized. Wage employment through migration is viewed in the traditional system of values mainly as a supplement to, rather than a substitute for, farm income in cash and kind from smallholdings. Family resettlement on sugar estates could infringe the right to traditional holdings and threaten the social security which this system of land allocation provides.

121. As regards the introduction of a system of deferred pay, it seems that the law does not preclude any such voluntary arrangement between employers and workers, with proper safeguards approved by the Labor Commis- sioner: one small sugar estate whirh introduced a deferred pay scheme has reported some measure of success in substantially reducing absenteeism. The sugar cane arowers would support a dferred nay system which would ensure against the sudden loss of workers during critical periods of the season. The ob4ective s therefore not so much asystem of deferred pay as is generally understood, that is, a form of forced savings, but rather a system undAer whi"ch employers coul wihhl Af deereAthe --- A pamelt__ (ur;i th en WLL.LLJ a .. tJU.UA LL~LhVLLU± U=4C.= L CU kjyICLY L a \LL"unil.L theC enIU oL thIt- season) as a penalty to those workers who leave before the expiration of their conLtracts.

'2Aquate infLomation on wich tLhe competitiveness of local wages with those in South Africa can be assessed is not available. A wage compari- son by a recent ILO mission shows the monthly earnings of a general laborer - 51 - in Swaziland to be R 1Q (including rations) as against R 25 - R 30 (plus rations and housing) in South Africa, implying the Swazi wages were not conmpettiive. ~ 1! uoevr, this cmpaiQriso~I ninoc is usiv since it is aedo minimum wages in Swaziland as against wages derived from employment contracts which !argel- reflect average wages paid.

1..4,a) 1 To 4i some imes4 ,o allegedAno m th1,at - v trdiioa reluc=

* ~~ J.L. L OJ. ~ UALLL.L OLIL L. JWCLZ..LO *kCLV~ OLIWWLL ~ L.CLuLLLLJ.LIa.L L.'.LUC. tance to working in the sugar industry which, until 1973, relied heavily on .. l-sata nu_r 01 __4 grn 'a.or L_ 'rom_^_ t__e w__traa o' _.c_:. _.thfik sUUDL LL - UUUCL UL UIlLA. E CU L ItVLLIJ1iU U.LLjUC' LIL1 WLL LIIU dWd U LLLb migrant labor has aggravated the labor shortage. The search for measures to arrest this decline snoulU include an examinaLion of the current wage structure and its probable effects on labor supply. Due to the lack of well organized trade unions together with tne current system of wage determination, sugar workers have not been in a position of strength to negotiate a part of the surplus generated by the very favorable sugar prices in the past few years; the surplus being shared directly between the Government (through a sugar levy introduced in 1973) and the employers. In the absence of a wage increase to sugar workers, which permanently increases unit cost of production, the concept of an annual bonus based on the price fetched for sugar (a practice in several sugar-producing countries) should be considered as a possible incentive to increased recruitment; or, alternatively, a portion of the sugar levy might be earmarked for the development of social projects in the main population centers of sugar workers. 2/ The ILO recommendation for the establishment of a stabilization fund to offset the seasonality of employment in the sugar deserves serious consideration.

124. The labor shortage problem in agriculture is a good example where research could be directly applied to policy formulation. Other issues which warrant investigation are the pace of mechanization in the sugar industry and the nature and extent of skilled migration and its implications for education and manpower planning.

125. In Botswana, the Government plans to carry out, with international technical assistance, a comprehensive study on migration over a two and a half year period starting in 1977. Briefly, the purpose of this exercise is to investigate the nature and extent of the migration process, both internal and external, determine its causes, and assess its socio-economic consequences. The program which is well conceived would represent an ideal base for policy formulation in several important areas of national development, including urbanization, wage policy and agriculture. It would also provide useful guidelines for integrating migration into economic policy in other labor exporting coiint-ries of the region and deserves international stunnort. Consistent with the need for specific areas of research in response to problems which will emerge from timp to timp (as was also indicarpt in SwazilAnd)Y the high rate of labor turnover, over 50 percent a year, at the copper/nickel

1/ Reducing Dependence, ILO, op. cit.

2/ There has been a recent increase in the wages of sugar workers. - 52 - mine at Selebi-Pikwe warrants early investigation. It might reasonably be assumed that the development of the local mining industry would benefit from the nresence of exnerienced miners who have long been exnosed to the discin- line of modern industrial employment in the mining industry in South Africa. In contrast to the situiatinn in the nonnper/nikel mine; no serionu labor turnover problems exist in diamond mining at Orapa, despite a close similarity bptween the respective wage triictuire= The relatixep stbhi1ity in the dinmondl labor force in Botswana might be related to the absence of opportunities for Mil 5_gratioootnrij t-nEC diamo_.rl4fnmnr minir.grn- -nin ir.J-Q-t-1,It, South AfricAfr4- fca (where(vhn thef-l, diamor_d4on-n"A minem-4-. labor1. -- force is largely localized) and a distinct preference for the more favorable woki.g conditior.s in dam-ond mn-ing localy

126. ,hne extent of 1labor turr,over ir,copper/'nickel at 'el b-PI-w i-SU . L1 AL. LL %J.L ctL)UL LL.i JL LLL j9 L LLL§,J -L O ~Lt:U L JLZ .wC has the effect of increasing overhead costs, through repetitive training, reducin.g efficiency, anu increasing the acciUenit rate; measures should be vigorously pursued to improve productivity through a more stable labor force. lo thle extent that thne wage pull in Douth Africa is a significant factor, remedial action through an upward adjustment in wages to a more competitive level with that in South Africa runs counter to Government policy which is to keep prices closely in line with those in the public sector. The need for a better understanding of the relative importance of other relevant considerations becomes clear, and appropriate research offers the possibility for developing the most feasible approach to a solution of this problem. Table 1.1: SOUTH AFRICA: POPULA'TION, 1910-1970 (in miLllions)

Total Whites Coloureds Asians _ ALfricans No. No.N -gNo. % No. X No. _

1910 5.9 100.0 1.3' 21.4 0.5 8.8 0.1 2.5 4.0 157.3

1920 6.8 100.0 1. 5 2]L.9 0.5 7.9 0.2 2.4 4.6 67.7

1930 8.5 1010.0 1. 8 21.1 0.7 8.0 0.2 2.3 5.6 68.6

1940 10.4 100.0 2.2 20.9 0.8 8.1 0.2 2.4 7.1 68.7

1950 12.5 lClO.0 2.6 20.9 1.1 8.6 01.4 2.8 8.4 67.7

1960 14.91 100.0 3.:L 20).9 1.5 9.7 C0.5 3.7 9.9 66.3

1970 21.4 100.0 3.7 17.5 2.0 9.4 0.6 2.9 15.1 70.2

1976-±-' 26.1 1l0O.0 4. 3 16.5 2.4 9.2 0.8 3.1 18.6 71.3

Source: South African Population Census Reports. Bulletin of Statistics, Department of Statistics, Pretoria, 1/ 'Table 1.2: POPULATION OF BOTSWANA, LESOTHO AND SWAZILAND (in thousands)

Botswana Lesotho Swaziland

1911 125 404 108

1921 153 499 113

1936 266 562 157

1946 296 564 188

1956 309 642 241

1966 550 1' 852 395

1975 666 1,217 494

1/ Refers to 1964 population census.

Sources: Country Populati.on Census Reports. Figuares for 1975 are taken frout the World Bank Atlas, 1976. - 55 -

Table 2.1: SOUTH AFRICA - ECONOMICALLY ACTIVE POPULATION By INDUSTRY DIVTSION- 1946. 1951. 1960 and 1970 (in thousan.ds)

Census Year Total Whites Coloureds Asians Africans

Agriculture, Forestry, Fishing 1946 1,547.1 167.8 97.5 13.7 1,268.1 1951 1,508.6 145.14 97.7 1.2.9 1],252.6 1960 1,689.3 119.3 120.3 10.9 1,1438.8 1970 2,239.2 98.9 119.2 6.7 2,014.4

Mining and Quarryire 1946 498.3 53.6 2.7 o.6 441.4 1951 510.1 57.0 3.8 0.5 448.8 i960 615.2 61.8 4.5 o.6 548.3 1970 676.1 62.8 7.5 0.6 605.2

?~enufact--csg 1946 359-8 131.5 148.9 16.6 162.8 1951 502.1 182.6 70.3 22.0 227 2 1960 644.1 210 7 93.2 31.6 308.6 1,70 1_ 0.70,6. . , 27.80 v v .3 .5 115

Electricity, gas, water 1946 12.6 5.3 0.8 - 6.5 1991 25.4 7.0 1.6 02 1960 39.6 10.5 2.9 0.3 25-9 1970 49.7 I'i.2 3.0 0.2 32.3

Construction 1946 153.0 50.2 24.7 1.7 76.4 1951 240.1 67.2 38.7 2.3 131.9 1960 276.1 72.5 40. 2.3 161.3 1970 4446.4 95.7 76.8 9.6 264.3

C'utmerce and finance 1946 249.0 140.0 18.5 19.1 71.14 lr?51 327.6 178.8 25.0 23.1 100.7 1960 518.0 255.7 44.5 29.0 188.8 1970 906.4 418.9 84.5 53.8 349.2

Transport and communication 1946 207.2 122.6 13.8 2.2 68.6 1951 202.9 113.2 14.2 2.5 73.0 ,960 2"5.1 115 .6.63. 8 .9 1970 338.3 163.6 27.6 7.5 139.6

Services 1946 9)61.6 177 777 9 1 1951 1,073.6 204.3 111.5 16.8 741.0 1960 1,249.7 260.3 144.8 23.5 821.1 1970 1,574.0 325.4 161.2 23.2 1 jO64.2

Unemployed and unspecified 1946 232.4 39.1 44.3 12.1 136.9 1951 202.1 28.0 41.9 14.1 1U8.1 1960 483.8 44.5 87.1 24.0 328.2 1970 732.4 38.1 55.0 14.9 624.4

Econ. cal a.i-ve1V- i94v£ 4,221..U o87.8 349.0 79.1 2,905.1 1951 4,592.6 983.6 404.5 94.5 3,110.0 1g60 5,720.9 1,151.1 553.9 125.9 3,890.0 1970 7, 86. 2 1,49,7.5 703.6 180. 0 5,605 .1

Total population 1946 11,415.9 2,372.0 928.1 285.3 7,830.5 oa51 1,o71 2,64i. 1,103.0 6e. 7- -,5.; 1960 15,994.2 3,080.2 1,509.1 477.0 10,927.9 1970 21,402.5 3,726.6 2,021.4 618.1 15,036.4

Economically active as 1946 37.0 37.4 37.6 27.8 37.1 percent of total population 1951 36.2 37.2 36.7 25.8 35.3 1960 35.8 37.4 36.7 26.14 A=-6 1970 37.3 40.2 34.8 29.1 37.3

NOT'' Totals may not add due to rounding.

An interruption in the comparability of the series occurs between 1946 and 1951 for transport snd communications and between 1951 and 1960 for the economically active population. So-^ce: South African Popuiation Census Reports. Table 2.2: SOUTH AFRICA - ECONOMICALLY ACTIVE POPULATION BY OCCUPATIONAL GROUPS 1946. 1951. 1960 and 1970

Census Year Total Whites Coloureds Asians Africans

Professional, technical and 1946 10,°.1 76.6 6.1 1.9 24.4 related workers 1951 136.0 95.9 8.1 2.6 29.5 IcAn 205=r 137.9 14.0 9.2 48.5 1970 330.1 202.4 24.7 9.7 93.3

Ad-ministrative and ---erial 1946 75.5 62.3 1.8 8.7 2.7 workers 1951 95.6 78.7 1.8 10.1 5.1 1960 68.4 58.9 1.4 2.4 5.7 1970 75.9 69.9 0.8 1.8 3.4

Clerical workers 1946 188.4 152.4 5.7 2.3 28.0

1960 312.9 276.5 9.0 8.2 19.3 1970 579.1 419.5 37.2 26.2 96.3

Sales workers 1946 68.1 47.1 4.8 9.3 7.0 1951 92.7 63.5 6.4 11.4 11.1 1960 159.8 97.5 10.4 22.9 28.9 1970 329.7 160.3 27.2 31.4 110.9

Servi workers 19146 721.7 42. 6 81.5 8.8 588.8 1951 789.9 46.9 92.5 10.5 640.o 1960 902.4 58.9 117.6 14.6 711.2 1970 1,266.9 105.0 133.1 16.9 1,011.9

Farm, forestry, fishing workers 1946 1,548.8 168.3 98.o 13.5 1,269.0 1951 1,504.9 144.0 97.3 12.7 1,251.0 1960 1,731.4 117.4 127.6 11.6 1,474.9 1970 2,280.2 97.2 124.5 6.9 2,051.6

Mining, production and 1946 1,333.8 291.6 124.8 24.9 892.5 transport workers and 1951 1,602.1 330.6 167.8 32.7 1,071.0 labourers 1960 1,948.7 375.7 214.1 43.2 1,315.8 1970 2,479.9 4o8.3 309.0 73.8 1,688.8

Unspecified 1946 175.7 46.9 26.3 9.9 92.6 1951 151.5 25.7 25.5 11.2 89.1 1960 390.8 28.1 59.5 17.7 285.6 1970 644.4 35.0 47.1 13.3 548.9

Economically active 1946 4.l221. 887=8 344q. 7092 1951 4,592.6 983.6 404.5 94.5 3,110.0 1960 5,719.9 1,150.8 553.6 125.7 3,889.7 1970 7o986.2 1i497 6 703.6 180.0 5,605.1

Not economicallyaactive 1946 7,194.9 1,484.2 579.1 206.1 4,925.5 1951 ~~~~8,c78. 9 1,658.1 6-8.52.2,'01 1960 10,265.8 1,927.0 956.2 352.1 7,030.5 1970 13,416.3 2,229.0 1,317.9 438.2 9,431.2

Noue: Tuoalt way not add dueat t rousnngn

Source: South African Population census Reports. Table 2.3: SOUTHE AFRICA: EXPLOYMENT IN MIN:ING AND QUARRYING _ tin thonsan(ds) _

Total Whites Coloureds Asians Africans

1960 620.1 67.7 3.9 0.5 548.0

1965 628.3 65.8 5.2 0.7 556.6

1966 633.2 66.0 5.3 0.7 561.2

1967 61,5.5 64.0 5.2 0.7 545.6

1968 628.7 63.2 5.5 0.7 559.3 U, 1969 627.9 62.8 5.7 0.7 558.7

1970 656.8 62.6 6.3 0.6 587.3

1971 647.5 61.0 6.4 01.6 579.5

1972 627.4 60.2 6.8 01.6 559.8

1973 6 84.7 61.0 7.10 0.6 616.0

1974 674.1 62.2 7.3 0.5 604..1

1975 639.5 63.2 7.5 0.6 5613.1

Source: Ministry of Labour-Statistics; Bulletin of Statistics, Dept. of Statistics, Pretoria., Table 2.4: SOURCES OF AF'RICAN LABOUR EMPLOYED V BY MINES AFFILIATED TO THE S.A. CHAMBER OF MINES. 1906-76

Souith North of IJ 0 AfrLca Lesotho Botswana SwaziLand Mozambique Lat. 22 S Total

1906 Thou. 18 2 0.3 0.6 53 6 81 22.8 2.6 Ci.4 0.7 65.4 8.0 100

1936 Thou. 1L66 46 7' 7 88 3 318 52.2 14.5 2'.3 2.2 27.8 1.1 100

1946 Thou. 1:26 38 7 6 96 32 305 41.'3 12.5 2'.3 1.8 31.5 10.6 100

1960 Thou. 145 51 16 6 95 93 397 ,1. 36.7 13.0 4.0 1.4 24.1 20.9 100

1970 Thou. 97 71 16 5 113 98 401 24.1 17.7 4.0 1.3 28.2 24.5 100 ul 1973 Thou. 86 87 17 5 99 128 422 20.4 20.7 4.0 1.1 23.6 3C1.3 ]LOO

1974 Thou. 90 78 15 6 102 73 364 ,7. 25.2 21.4 4.1 1.4 27.9 20.0 1LOO

197?5 Thiou. 122 86 17 7 118 15i 365 %S 33.4 23.6 4.7 1.9 32.3 4.1 100

1976 3'/ Thnou. 175 89 26 12 69 20) 391 44.8 22.8 6.6 3.1 17.6 5).1 100

Note: Data Sources are not consistent. 1/ As of IDecember 31. 2/ Mainly Malawi; from 1975 mainly Rhodesians. 3/ As of July 31.

Source: Mine 'Labour Organizations (Wenela) Ainual Reports. Table 3.1: SOIJTH AFRICA: PERCENTAGE COMPO)SITION OF GROSS DOMESTIC PRODUCT, -BY INDUSl'RIAI. SECTORS', 1911-1974

1911 1920 1930 1940' 1950 1960 1965 1971) 1973 1974 1975

Agriculture, forestry, fishing 21.1 22.2 14.2 12.7 17.8 12.2 10).2 8.9 8.2 9.3 7.9

Mining & quarrying 27.6 18.3 15.6 18.8 13.3 13.8 12.7 10.6 13.0 14.9 13.1

Manufactuling 3.8 7.3 9.3 12.4 18.4 20.7 2:3.3 24.2 22.8 21.9 23.8

Construction 0.7 1.5 1.9 1.9 3.1 3.1 4.0 4.3 4.5 4.5 4.7

Electricit:y, gas, water 0.9 1.1 2.1 2.4 1.8 2.5 2.4 2.6 2.7 2.5 2.7

Transportation, stora,ge, communic:ation 9.7 9.7 11.6 9.6 9.2 10.2 9.5 9.2 9.1 8.5 9.0

Trade 12.8 15.6 15.1 13.9 14.7 :L4.0 14.5 14.2 14.1 13.6 13.5

Other 23.4 24.3 30.2 28.3 21.7 23.5 23.4 26.0 25.6 24.8 25. 3

Total 100.0 100.0 10.0 00 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Source: D)epartment of Statistics. Table 3.2: BOTSWNANA: PERCENTAGE COMPOSITION OF GROSS DOMESTIC PRODUCT, BY INDUSTRIAL SECTORS, 1965-1973/7,4 __

1]965 1966 1967/68 1968/69 1971/72 1 973/774

Agriculture, forestry, hunting, fishing 33.,7 39.3 41.7 45.3 32.,9 32.1

Mining, quarrying, prospecting 0.6 - 1.6 0.4 10.,8 8.3

Manufacturing 11.6 7.9 8.2 5.5 4.9 5.3

Construetion 6.4 5.7 4.5 3.7 9.6 11.0

Electricity, water 0.6 0.8 0.7 0.6 1.2 1.8

Transport, storage communication 8.2 8.1 5.5 6.6 3.7 2.13

T rade 18.8 18.4 11.4 1l0. 0 16.9 18.4

Finance, business services 6.4 6.5 6.6 6.8 5.1 5.7

General government ) 17.5 18.6 11.5 9. 5 13.7 13.3 Connunity, social, personal services ) _2.3 2. 5 3.4 5.1

Total 1L00.0 100.0 100.0 100.0 100.0 100.0D

Source: Central Statistical Office. Table 3. 3: LESOTHO: PERCENTAGE CO1POSITION OF GROSS DOMESTIC PRODUCT, BY INDIJSTR[AL ORIGIN. 1966-67-1973/74

1966,/67 1967/168 1968/69 1969/7C0 1970/71 L971,/72 1972/73 1973/74

Agriculture 45.5 41.9 44.4 43.4 40).8 41.4 47.2 51.4

Mining, quarrying 1.8 2.5 0.7 2.3 1.7 0.5 0.3 0.3

Manufacturing, handiLcraf-ts 2.1 2.1 2.4 2.4 2.7 2.8 2.1 2.7

Construction 2.1 2.3 2.3 2.4 2.7 2.6 2.3 2.4

Electricity, water 0.3 0.3 0.3 0.3 0).3 0.4 0.6 0.7

Transport, storLge communication 1.4 1.4 1.3 1.3 1.7 1.8 2.3 2.4

Trade 13.3 13.2 12.5 12.0 14.1 16.0 15.4 12.4 F

Finance,, business services 1.2 1.7 1.5 1.8 1. 3 1.4 1.7 3.2

Genetral goverLn(mt 13.9 16.3 16.6 16.3 16.2 15.9 10.7 9.6 Ownership of dwellings 15.4 15.3 15.0 14.8 15.5 14.2 13.4 11.0

Other goods & services 3.0 3.0 3.0 3.0 3.0 3.0 4.0 3.2

Total 100.0 100. 0 100.0 100. 0 10(.0 100.0 100.0 100.0

Source: Bureau of Stat:Lstics. Table 3.4: SWAZILAND: PERCENTAGE COMPOSITION OF GROSS DOMESTIC PRWDUCT, BY INDUSTRIAL SECTORS, 1968-69-1974/75

1968/69 1969/70 1970/71 1971/72 1972/73 1973/74

Agriculture, Forestry 24.2 32.2 -32. 7 37.1 .31.5 31.3

MLining 16.8 1.2.5 1.1.3 5.3 2.4 4.7

Manufacturing 15.4 1.3.7 12.3 L5.1 21.6 21.9

Construction - 2.2 2.4 3.3 3.7 )

Electricity, water 1.8 2.1 2.2 1.0 1.9 )

Transport, communications 8.6 7.3 7.6 7.3 6.0 ) 25.7

Trade 9.7 6.0 7.3 8.0 .10.6 )

Finance, business services 2.9 2.5 2.6 1.9 2.4 )

Community, social, personal services 15.8 16.6 16.7 :L6.6 :15.7 16.3

Cvner ship of dwellings 4.8 5.0 4.8 4.4 4.2

'otal 100.0 100.0 100.0 100.0 100.0 100.0

Source: Central Statistical Office 9 t 2' 2 "' CF 2 ?¢ itt > % 1 ~~~~~~~~~~~~~~~~~~~~~~~~~~SOMALI> RE PU -B LgRt<\ CXUADEg>FENIA\

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