Involvement of foreign economic interests in South Africa's industrial development projects http://www.aluka.org/action/showMetadata?doi=10.5555/AL.SFF.DOCUMENT.nuun1975_35 Use of the Aluka digital library is subject to Aluka’s Terms and Conditions, available at http://www.aluka.org/page/about/termsConditions.jsp. By using Aluka, you agree that you have read and will abide by the Terms and Conditions. Among other things, the Terms and Conditions provide that the content in the Aluka digital library is only for personal, non-commercial use by authorized users of Aluka in connection with research, scholarship, and education. The content in the Aluka digital library is subject to copyright, with the exception of certain governmental works and very old materials that may be in the public domain under applicable law. Permission must be sought from Aluka and/or the applicable copyright holder in connection with any duplication or distribution of these materials where required by applicable law. Aluka is a not-for-profit initiative dedicated to creating and preserving a digital archive of materials about and from the developing world. For more information about Aluka, please see http://www.aluka.org Involvement of foreign economic interests in South Africa's industrial development projects Alternative title Notes and Documents - United Nations Centre Against ApartheidNo. 35/75 Author/Creator United Nations Centre against Apartheid; Sub-Commitee of the United Nations Special Comittee against Apartheid; United Nations Special Comittee against Apartheid Publisher Department of Political and Security Council Affairs Date 1975-11-00 Resource type Reports Language English Subject Coverage (spatial) South Africa Coverage (temporal) 1975 Source Northwestern University Libraries Description Introduction. Recent Developments in the nuclear field. (a) Uranium enrichment (b) Nuclear power station (c) Uranium mining. Sishen-Saldanha Bay project. (a) General. (b) Foreign involvement (c) (i) Iron ore exports to Japan (ii) Harbour and rail construction(iii) Semi-manufactured steel plant. Second oil-from-coal plant (SASOL II). Recent developments in mining. (a) Richards Bay coal export project (b) Recent discoveries. Developments in shipping: containerization. Format extent 34 page(s) (length/size) http://www.aluka.org/action/showMetadata?doi=10.5555/AL.SFF.DOCUMENT.nuun1975_35 http://www.aluka.org NOE, DOU MENTS*.. NOE, DOU MENTS*.. No. 35/75 INVOLVEMENT OF FORE N ECONOMIC INE TS IN SOUTH AFRICA'S INDUSRIAL DEVELOPMENT PROJECTS November 1975 I975 A study by the Sub-Committee (qf the Special Cowmitteeagainst Apartheid) on the ImplementatJ on of United Nations Resoiuicns and Collaboratioi -ith SzUt'rAfrica Page I. Introduction..a...aaaa. a ...a .aa*a II. Recent Developments in the nuclear field ..a ..... (a) Uranium enrichment (b) Nuclear power station (c) Uranium mining III. Sishen-Saldanha Bay project ......... a.a (a) General (b) Foreign involvement (c) (i) Iron ore exports to Japan (ii)Harbour and rail construction (iii) Semi-manufactured steel plant IV. Second oil-from-coal plant (SASOL II) . V. Recent developments in mining . a. .. * a a a a a a a (a) Richards Bay coal export project (b) Recent discoveries VI. Developments in shipping: containerization ..aaaa. 50 LThis study is published by the Unit on Apartheid at the request of the Special Committee against Apartheid._ *All material in these notes and documents may be freely reprinted. Acknowledgement, together with a copy of the publication containing the reprint, would be appreciated. NOTESA I. INTRODUCTION The extent and significance of foreign involvement in apartheid in South Africa has been extensively documented in the reports of the Special Committee against Apartheid, as well as in the publications of the liberation movements, and in studies prepared by anti-apartheid movements and other non-governmental organizations and by other concerned institutions and individuals. The evidence presented in these reports shows conclusively that the role played by foreign capital in South Africa is not purely economic, but has deep political, military and strategic implications. Foreign investment helps reinforce apartheid and impedes United Nations efforts to secure the eradication of apartheid. The major trading partners of South Africa have largely ignored United Nations resolutions requesting Member States to break off all relations with South Africa. Involvement in the apartheid economy by companies under their jurisdiction and by transnational companies has continued to increase. In recent years, many of these foreign economic interests have entered into undertakings in partnership with South African State-owned and private corporations, thus acquiring an ever larger stake in the perpetuation of the apartheid system. Figures published by the South African Reserve Bank show that foreign assets in the Republic of South Africa. grew from R4,562 million in 1968 to R7,786 million in 1972. Between 1968 and 1974, foreign capital is estimated to have financed a proportion of between 5.9 and 19 per cent of South Africa's gross domestic investment. l_ Most of this capital inflow has been direct investment in wholly or partly-owned subsidiary companies. In recent years, however, there has developed a trend toward growing foreign involvement in the public sector. Under the pressure of its growing political and economic isolation, the South African regime has embarked on a major industrialization programme aimed at achieving self-sufficiency through the development of strategic sectors of the economy by various State and para-statal corporations. Public authorities and public corporations more than doubled the value of their investments in the period under consideration, and their share of the countryts gross domestic investment was 55 per cent in 1972. ?/ They were encouraged to enter into partnerships with foreign economic interests and to approach foreign capital markets for loans. As a result, foreign direct investment declined from 67 per cent to 62 per cent of total foreign investment between 1968 and 1972, while indirect investment in the public sector increased from 13 per cent to 17 per cent of the total./ l/ See A/AC.115/L.414 for details. / South African Reserve Bank, Quarterly Bulletin, June 1975. The share of the public sector declined after the 1972 peak, and was 38 per cent in 1974. The huge development programmes recently approved and described in this paper should again raise the contribution of the public sector substantially in the next few years. The Financial Mail of Johannesburg estimated the public sectorts share at 47% in the 1970-75 period, compared with 36.5% in the immediate post--war years. (Top Companies Supplement, 6 June 1975) 31 South African Reserve Bank, Quarterly Bulletin, June 1975. 7 5-22056 According to recent figures released by the Reserve Bank, the financial year 1974/75 registered a total net inflow of capital into South Africa of R1,499 million, more than two-thirds of which was long-term capital. The public corporations received about half 4f this amount and the central government and banking sector and the private sector a quarter each./ Foreign capital, both as investment capital and loan capital, is expected to play a major role in the financing of several large-scale industrial development projects approved by the South African Government in recent years. Under the heading "Can we afford them all?", the Financial Mail of 4 July 1975 listed 28 major projects to be undertaken in the next five to ten years by South African private and public corporations, necessitating a total investment of over 14 billion rand. All of the largest projects, involving an investment of between R500 and R2,000 million, are to be carried out by the public sector. These include the expansion of the postal and telecommunications system (R2,100 million); the restructuring of the shipping services to containerization (R2,000 million); four new electric power stations, including a nuclear station (R4,350 million); the establishment of a second plant for the conversion of coal into oil (R1,021 million); coal mining expansion (Rl,000 million); a uranium enrichment plant (R910 million); and an iron-ore mining and export scheme at Sishen-Saldanha Bay (R603 million). The paper pointed out that investment envisaged under the Government's Economic Development Programme for lq,74- 79,to sustain, an annual growth rate of 6.4 per cent would amount to R50 billion, or about three times the combined assets of all South Africa's banks, building . societies and insurance companies. Many of these projects are thus dependent on South Africa's capacity to raise the necessary capital abroad. The technological know-how and sophisticated capital equipment contributed by foreign companies are an additional important consideration. The projects reviewed in this paper are illustrative of South Africa's industrialization plans and of the crucial role pfL. yed by foreign capital in enabling the implementation of the Government's plans. They have been selected for their strategic importance to the apartheid regime in achieving self-sufficiency in areas in which it is vulnerable to an int rnational boycott, and in, creating links of inter-dependence between the r4gime and its foreign collaborators. _/ Address by Dr. T.W. de Jongh, Governor of the South African Reserve Bank, at the annual General meeting of stockholders of the Bank on 26 August 1975. Financial Mail, Juhannesburg, 29 August 1975. II. RECENT