South Africa Apartheid

A situation of racial discrimination existed during apartheid in South Africa. The British Cape Colony and the Dutch were the two main nations involved in enforcing apartheid. In South Africa, apartheid was a system of racial discrimination that gave white people a distinct advantage over black people. Apartheid was so terrible that many people turned to creative means of resistance. Some chose nonviolent protests, while others chose armed resistance, boycotts, and ultimately political participation. Many South Africans lost their lives nonetheless, but pressure from the international community was critical to influencing the National Party that ruled South Africa at the time to give the blacks the freedom they so much craved. The initial part of this paper discusses the apartheid in detail placing focus on the main events that started the apartheid, the events that marked apartheid and those which led to the end of the harsh rule.

The other part of the paper discusses the effects of apartheid rule on the economy of South Africa referring to credible academic references to support the ideas presented. Apartheid had an enormous impact on the South African economy. Some occurrences during the apartheid era were responsible for shaping the country's economy in some ways. These circumstances, for example, are the lifting of economic sanctions that has allowed more capital injections into the South African economy. The effect of resolution 392 of the United Nations Security Council to the economy, the improvement in the economy as a result of new leadership and the promulgation of the new constitution, the openness to international trade and flow of capital and the effect of employment on the country's economy. All these have significant influences on the South African economy in different historical times.
The final section discusses the relationship of the apartheid in South Africa and the international business. Here again, key issues that best show how apartheid relates to international trade are discussed. They include the placement of sanctions and boycotts by the international community, the impact of implementation of systems to counter the fluctuating strength of the Rand and the excessive gold exports that were technically detrimental to the economy. Besides, the common benefit of the international community resulting from mass opposition to the apartheid and the effect of the removal of the National Party and the subsequent replacement of the national government in which the interests of the blacks got represented. Key lessons from the apartheid are then presented in conclusion and explained to show how they relate to international business. Critical theories have been carefully applied in the second and third section of the paper to back up the ideas presented.






Explain Apartheid in South Africa
The Birth of Apartheid
Apartheid which meant "Separateness" or "Apartness" in South Africa was a system of segregation in South Africa in which people; especially the blacks were discriminated by race. Although history officially records apartheid starting in the 1940s, the history of racial segregation in South Africa dates back to the 17th century. At the time, the South Africans were under the influence of two European powers, the English and the Dutch (Boers). The latter group as a result of being overpowered by the former established their colonial territories in South Africa that were the Transvaal and the Orange Free State which the Boers did not expect the English influence (Clark & Worger, 2013). However, the discovery of diamonds and gold in these two regions triggered a war, the Boer War, where the English invaded Dutch strongholds and as a result lost it to the Boers. It was in the early 1900s.

The Apartheid Rule
In the following years, the two groups would share power, albeit with a lot of conflicts until the 1940s when the Boers, using the Afrikaner National Party, gained a substantial majority. To strengthen their influence and consolidate the social and economic reign over the native South Africans, the Afrikaner National Party started the rule by apartheid. It was in the year 1948. The apartheid rule was enforced mainly through the enactment of laws that undermined the rights of the black natives while favoring the whites. These acts touched on every facet of the blacks and were primarily designed to ensure that the whites thrived at the expense of the blacks in South Africa (Worden, 2012). The four acts that were in place were the Bantu Authorities Act, the Population Registration Act and Public Safety Act and Criminal Law Amendment Act.
The Bantu Authorities Act, sometimes called The Group Areas Act divided South Africa into areas exclusively occupied by the whites and those held by the Blacks following their origin. This type of discrimination came about primarily to restrict any involvement of the blacks in political affairs of the country by limiting their activities the "homelands," as they were referred to (Worden, 2012). Furthermore, the majority who were the blacks (about 80 percent of the country's population) were in a section of about 13 percent of South African's land. It meant that land for economic activity was limited and so they lived in extreme poverty. Besides, the few Africans who were allowed into "whites-only" areas had to carry their passbooks with them. The public facilities got also classified for the whites and those for non-whites. This act allowed the whites to deny the blacks from any political participation thus curtailing any effort that might eventually give the blacks independence.

The Population Registration Act, which was brought up by the Department of Home Affairs, required that all the South Africans be in categories of black, colored or white. The colored mostly referred to the people who were of mixed descent, either Asian-African or European African. But in either of such cases, any person could not be considered white if he had black parentage, while the whites were classified as so mostly because of their color and other considerations such as their speech, education level and their social habits (Sonneborn, 2010). If a person under the classification of "black," then it was mandatory for them to carry their, so called "pass books" that contained personal information including their name, photos, fingerprints and information that enables them to access parts that were considered "white-only." Failure to comply with this law meant imprisonment and even in some cases, a death sentence.

Other acts that come into place included The Prohibition of Mixed Marriages Act that ruled out inter-racial marriages. An extension of this law would, a year later, prevent sexual relations between the blacks and whites. So severe and harsh had the apartheid rule become to Africans that they were expected to use an exclusively inferior version of public transport, schools, post offices, public benches, counters, doors and even restaurants. It was under these unbearable conditions that there was a mass uprising against the colonial rule. With such extremist acts coming into use publicly, the black majority were literally under pressure to fight for a change or else continue suffering.

Opposition to Apartheid
As aforementioned in this paper, the black majority were literally under pressure to "fight off" the harsh rule. Opposition by the blacks came in various forms, for example, peaceful demonstrations boycotts, strikes, violent protests and eventually political involvement. The debate initially arose in 1952, the South Indian National Congress together with the Afrikaans National Congress (ANC) in a meeting where they burned their pass books in defiance to the expectations of apartheid rule (Sonneborn, 2010). The Pan Africanist Congress (PAC) that got formed from the ANC. The Black Consciousness Movement (BCM), the United Democratic Front (UDF), the Inkatha Freedom Party (IFP) and the South African Students' Organization (SASO) were some of the group that staged their countrywide protests, peaceful and violent ones during the 60s that led to many deaths.

The End of Apartheid
During the1960 in Sharpsville (an area predominantly for the black), the Pan African Congress mobilized a large group of blacks who approached a police station without their passbooks. Consequently, the police opened fire at the crowd where at least 70 people died, and hundreds were seriously injured. It was acceptable according to the apartheid acts as the police responded to resistance by killing people. Such actions substantially contributed to even more Africans wanting to fight for their freedom besides drawing the attention of the international community to help Africans. By the 1980s, most leaders of the resistance group had been captured and killed or incarcerated, and one of them was Nelson Mandela (Sonneborn, 2010). Due to the insistence by the Africans through protests and pressure from the International Community, the National Party led by Pieter Botha was forced to step down for De Klerk. In 1994, a general election was in place and a long-term prisoner, Nelson Mandela was elected marking the end of apartheid.

How Apartheid Helped to Shape the Current Economy of South Africa
The sanctions imposed and their effects. The apartheid rule in South Africa had a huge impact in the present economy of the country. As a result of dissatisfaction of colonial masters that funded the apartheid administration (for instance the funding from Moscow), prohibitive sanctions were imposed by the International community as a form of punitive action. These come into consideration in place in various ways that included financial restrictions, diplomatic, political and trade sanctions. An analysis of the economic performance in South Africa shows a slight improvement in GDP per capita in the period preceding 1987, followed by a sharp decrease in GDP in 1994 and then future improvement during the post-apartheid rule. Studies by Hostetter (2007), suggests that due to these sanctions, the international trade with South Africa and rest was minimal as there was inadequate funding regarding loans and capital.


Figure A. Annual South African Growth Rates. Adapted from ReSAKKS, 2015, Retrieved February 18, 2017, from http://www.resakss.org/region/monitoring-progress/south-africa.

The lifting of economic sanctions that has allowed more capital injections into the South African economy. The improvement in the South African economy in the post-apartheid period can be directly attributed to, firstly, the international community lifting of economic sanctions and secondly, the integration of the economy of the country into the global economy. The number of exports together with imports increased by 65% from 1990 to 1998 and increased by an average of 17% over the following decade according to Hawkins (2004). The significant improvement, of course, results from some political and social reforms, for instance, the signing in of a new constitution that then allowed the blacks to carry out economic activities better and the gradual improvement in product quality as a result of competition posed by other countries.

The effect of resolution 392 of the United Nations Security Council to the economy. In compliance with Resolution 392 by the UN Security Council, "Strongly condemning the South African Government for its resort to massive violence against the killing of the African people… and others opposing racial discrimination" (United Nations, n.d.) a mandatory arms embargo was applied against the South African government. In response, the country commenced their production of weapons though the range with which they could produce was minimal due to unavailable skill at the time. The impossibility in replacing aging and military officials in South Africa then begun to pressure the South African government to consider peace negotiations, an act of desperation that led the pre-colonial government to divert a huge portion of the funds into military sustenance thus causing under-funding in education, health, and other essential utilities. This decision had a heavy impact on the country's economy as the apartheid rulers were aware that the economic welfare of the country was at stake, perhaps a reason as to the decline of the country's economy before 1994.

The improvement in the economy as a result of new leadership and the promulgation of the new constitution. The signing of a new law by Nelson Mandela on December 10th, 1996 allowed him to spearhead reforms that brought about substantial developments in education and health care (Pons-Vignon & Anseeuw, 2009). It contributed significantly towards the improvement of the South African economy because of the lifting of sanctions by the International Community and the restoration of peace and security that allowed the blacks to carry out economic activities. As a consequence of the suffering experienced during the apartheid period, the new government led by Nelson Mandela focused on the socio-economic dimension. The formation of the Reconstruction and Development Programme (RDP) and the Growth, Employment and Redistribution Strategy (GEAR), both of which were primarily meant to steer economic growth, reflected the ambitions of the newly formed government in which the blacks were well represented (Andreassen & Marks, 2010).
There was the openness to international trade and flow of capital. The effect of the direct effort by the South African people to abolish the "rules of the apartheid" plays a significant role in shaping the economy of the country. The sudden growth of South Africa's economy as from 1994 (evident in the graph above) wasn't at all predictive given the apartheid rule and the effects it was leaving behind besides the social unrest in the country at the time. The unreasonable taxes the blacks were to face compared to the low wage an African earned (the whites received about 14 times as much as the blacks did) and the little or no education amongst most Africans were all barriers to economic improvement. According to Plessis and Smit (2007), openness to international trade and flow of capital were the key players to such a quick economic recovery.

The effect of employment. While critiques argue that in the early 1990s, South Africa was experiencing "a reduction in employment rates associated with positive economic growth" (Plessis and Smit, 2007) but a closer examination of more recent studies, in fact, suggests otherwise. The impact on the effect of an increase in real wage in South Africa in 1994 is then supposed to explain the unreasonable growth in employment at least, but a logical analysis attracts skepticism on the idea since evidence on decreasing real wage is very limited during the time. Additionally, Plessis and Smit also suggest that stable macroeconomic environment, for instance, the lower uncertainty and associated lower interest rates to be responsible for South Africa's dramatic economic recovery as from 1994.
How Apartheid in South Africa Relates to International Business
The apartheid in South Africa has a link to the international business in numerous ways. South Africa being a leading exporter of gold and diamonds, it meant that significant changes in the country's leadership produced effects that were hard-hitting among its trade partners. Moreover, South Africa as a country was adversely affected by the apartheid concerning how it conducted trade with other nations. As a way of showing no support to apartheid, South Africa was isolated by many countries by placement of trade barriers, placing bans on the issuance of loans and restriction of trade relations with South Africa, all of which adversely affected the extent to which it carried out the international trade (Morgan, 2012).
The effects of the placement of sanctions and boycotts by the international community. South Africa's foreign investment and commerce were severely affected by boycotts and penalties placed by other countries. Chiefly among these measures was the arms embargo placed by the UN Security Council and enforced fully in 1977. The IMF, in 1983 stopped the issuance of loans to the country. Worse still, an oil embargo was initiated by the Organization of Petroleum Exporting Countries (OPEC) in 1973 and later Iran in 1979 a similar move. By 1985, most private banks that were among the leading international trade partners for South Africa stopped giving loans (Amstutz, 2013). It was not only enforced to show a lack of support for the apartheid, but also most banking companies felt that was risky to invest such an unstable economy. Besides, the environment in South Africa was too much unconducive as many foreign businesses had to meet a lot of labor costs amidst political instability and therefore it was logical why many countries were terminating their business relations with South Africa.
The impact of the implementation of systems to counter the fluctuating strength of the Rand. Besides the excessive gold exports that were technically detrimental to the economy. At the beginning of the 1900s, South Africa's economy was largely supported by international trade even at the height of international isolation when the apartheid received mass opposition from the international community. The country's main export was gold, and so the government deliberately built new railway lines, established new mining sites and constructed new and better harbors so as to encourage non-gold trade that was affecting the price of the gold and causing fluctuations in the strength of the Rand (Harrison & Zack, 2012). Besides, the General Export Incentive Scheme (GEIS) adjusted tariffs on exclusively imported raw material that were meant to be processed and exported to create an export surplus over the imports.

The common benefit of the international community resulting from mass opposition to the apartheid. Apartheid also brought about a sense of unity among the international community between South Africa and its trade partners today (Hostetter, 2007). Focusing mainly on the duties carried out by the United Nations Organization, South Africa was able to form key trade allies that still exist today. These partners include mostly Western European countries, for example, Netherlands, France, Switzerland, Spain, and Sweden. In 1994, Switzerland was the biggest market for South African diamonds. Other trade allies formed during the fight against apartheid by South Africa are Japan, United States, Italy, Germany and a few African countries. Through the formation of these partnerships, countries other than just South Africa have been able to maintain peace amongst themselves which is a major factor in conducting international trade (Anderson, 2008). Furthermore, maintenance of peace was also crucial in the restoration of trust among nations that was not there as an effect of world war II.
The result of the removal of the National Party and the subsequent replacement of the national government in which the interests of the blacks got represented. After the abolishment of apartheid in South Africa, the new leadership of the country immediately restored trade ties causing a rapid growth of its international commerce contributing 16 percent of the country's GDP by 2000. It is arguable, albeit, that the dramatical improvement of the South African economy after the abolition of apartheid was due to the collective effect of the reforms. Such as the decision not to nationalize mineral mines, the vast labor markets and the effectiveness of land through restitution and redistribution and not just the decrease in the rate of employment that a few studies have associated to the positive development of the economy. These reforms not only enabled the country's citizens to take charge of their living standards but also they have allowed the new leadership to improve their relations with the international community which in effect has improved international trade (Ramlall, 2012).
Comparison between International Business and Apartheid in South Africa
The cheap valuation of exports from developing countries similar to the cheap labor offered from the blacks during apartheid. International trade relates to apartheid in South Africa in the sense that, in international trade, there seems to be increasingly worsening terms of trade where exports, especially from third world countries, are of less value than imports. The prices of exports of the raw materials from third world countries get a decision in the competitive market. Similarly, the blacks offered cheap labor as they were not well paid within the white-dominated apartheid rule.

Trade barriers and protectionism given to traders in developed countries similar to the obstacles placed by the National Party in South Africa against the participation of Africans in the government. Secondly, trade barriers and protectionism set by advanced nations against developing ones, account for the limited market access. The agricultural sector of developing countries suffers the most since many developed countries can subsidize the cost of production for their farmers who in turn produce cheap, high-quality goods which are dumped into the global market thus forcing developing countries to sell at lower prices. Similarly, the apartheid government placed barriers against the participation of the black majority in neither political nor economic activity therefore effectively hindered their development.

Conclusion
Lessons Learnt
The importance of taking an initiative. It was only when the South Africans took the initiative to oppose the apartheid that they were able to overcome it. Many people lost their lives in the process, others severely injured and even others imprisoned for a long time yet they were committed to an excellent course. Likewise, it is when the modern day governments stop the silence on any form of inhumanity like racial discrimination that peace and prosperity thrive. On the contrary, however, most modern day governments are not quick to take the initiative in fighting age-old practices such as racism, slavery and mass killings unless their people are affected. Politicians are famous for incitement from social class and in particularly third world countries, on tribal lines (Mercer, 2012). Consequently, particular groups in society continue to suffer injustices as they are less represented in political and law enforcement agencies. The apartheid presents valuable insight on such social injustices.
Effective leadership. Initially, in the 1960s, most nations were still skeptical about the likely effect of imposing sanctions on South Africa to show a lack of support to apartheid. In response, the United Nations initiated a global campaign to persuade governments and other private organizations to join in the isolation for the common interest. It involved famous athletes, musicians, and artists. Eventually, most states yielded to the United Nations' persuasion to join in the struggle, and this had a sustained amount of influence in ending apartheid (Mercer, 2012). Similarly, contemporary governments leading global Non-Governmental Organizations are expected to offer positive impact toward eliminating social evils. Whether carried out at a local or international level, major institutions can provide effective leadership in eradicating major social evils affecting the modern society.

How Lessons Learn to Relate to International Business

Developed nations should take a deliberate effort to lift unnecessary barriers to trade for developing countries to grow economically. It might involve but not necessarily limited to lowering import tariffs to reasonable levels, raising quota margins on imports from developing countries, reducing importation license costs and regulation and revision of currency devaluation policies. International trade bodies can also offer effective leadership by advocating for better terms of trade for the product of their member countries as well as general international trade. Other influential organizations such as European Central Bank and the Maastricht Treaty which are both Monetary Unions could be effective in initiating change into unfair international trade practices.
The apartheid is a case in point of how a collective approach to fundamental global challenges can be a success if conducted the right way. By emulating the examples set by South African freedom fighters in alliance with the international community, by working together in dealing with global challenges. There are high hopes for being able to solve complex economic and political problems such as the war on terrorism, global warming, energy and environmental security, food security, poaching and risk of extinction of particular species, the war on chronic illnesses such as cancer and HIV/AIDS and global imbalances and financial strain. However, just like South Africans faced enormous challenges in their fight against apartheid, the global society should expect no less regarding their share of problems in the course of addressing these same obstacles.


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