South Africa

 

Bureau of African Affairs                                                     
July 2007                                                                     
                                                                       
  Background Note: South Africa                                               
                                             
  Antelope graze in Amakhala Game                                             
  Reserve, South Africa, July 27, 2005.                                       
  [© AP Images]                                                               
                                                                       
  Flag of South Africa is two equal-width horizontal bands of red (top) and   
  blue separated by a central green band which splits into a horizontal Y, the
  arms of which end at the corners of the hoist side; the Y embraces a black  
  isosceles triangle from which the arms are separated by narrow yellow bands;
  the red and blue bands are separated from the green band and its arms by    
  narrow white stripes.                                                       
                                                                       
  PROFILE                                                                     
                                                                       
  OFFICIAL NAME:                                                              
  Republic of South Africa                                                    
                                                                       
  Geography                                                                   
  Area: 1.2 million sq. km. (470,462 sq. mi.).                                
  Cities: Capitals--Administrative, Pretoria; Legislative, Cape Town; Judicial,
  Bloemfontein. Other cities--Johannesburg, Durban, Port Elizabeth.           
  Terrain: Plateau, savanna, desert, mountains, coastal plains.               
  Climate: moderate; similar to southern California.                          
                                                                       
  People                                                                      
  Nationality: Noun and adjective--South African(s).                          
  Annual growth rate (2004 World Bank Group): 0.8%.                           
  Population (2004, 46.6 million): Composition--black 79%; white 9.6%; colored
  8.9%; Asian (Indian) 2.5%. Official figures from 2000 South African Census at
  http://www.statssa.gov.za/.                                                 
  Languages: Afrikaans, English, isiNdebele, isiXhosa, isiZulu, Sepedi,       
  Sesotho, Setswana, siSwati, Tshivenda, and Xitsonga (all official languages).
  Religions: Predominantly Christian; traditional African, Hindu, Muslim,     
  Jewish.                                                                     
  Education: Years compulsory--7-15 years of age for all children. The South  
  African Schools Act, Act 84 of 1996, passed by Parliament in 1996, aims to  
  achieve greater educational opportunities for black children, mandating a   
  single syllabus and more equitable funding for schools.                     
  Health: Infant mortality rate (2000)--59 per live births. Life expectancy--52
  yrs. women; 50 yrs. men. Health data from 2000 U.S. Census Report: HIV/AIDS 
  Country Profiles at http://www.census.gov/ipc/hiv/safrica.pdf.              
                                                                       
  Government                                                                  
  Type: Parliamentary democracy.                                              
  Independence: The Union of South Africa was created on May 31, 1910; became 
  sovereign state within British Empire in 1934; became a republic on May 31, 
  1961; left the Commonwealth in October 1968; rejoined the Commonwealth in   
  June 1994.                                                                  
  Constitution: Entered into force February 3, 1997.                          
  Branches: Executive--president (chief of state) elected to a 5-year term by 
  the National Assembly. Legislative--bicameral Parliament consisting of 490  
  members in two chambers. National Assembly (400 members) elected by a system
  of proportional representation. National Council of Provinces consisting of 
  90 delegates (10 from each province) and 10 nonvoting delegates representing
  local government. Judicial--Constitutional Court interprets and decides     
  constitutional issues; Supreme Court of Appeal is the highest court for     
  interpreting and deciding nonconstitutional matters.                        
  Administrative subdivisions: Nine provinces: Eastern Cape, Free State,      
  Gauteng, KwaZulu-Natal, Mpumalanga, North-West, Northern Cape, Limpopo,     
  Western Cape.                                                               
  Political parties: African National Congress (ANC), Democratic Alliance (DA),
  Inkatha Freedom Party (IFP), Vryheidsfront Plus/Freedom Front Plus (FF+),   
  Pan-African Congress (PAC), African Christian Democratic Party (ACDP), United
  Democratic Movement (UDM), and Azanian Peoples Organization (Azapo).        
  Suffrage: Citizens and permanent residents 18 and older.                    
                                                                       
  Economy                                                                     
  GDP (2004): $213 billion. 2004 GDP at market prices (baseline year 2000)    
  --1.374 billion rand (R).                                                   
  Real GDP growth rate (2004): 3.7%.                                          
  GDP per capita (2004): $3,480.                                              
  Unemployment (September 2004): 27.8%.                                       
  Natural resources: Almost all essential commodities, except petroleum       
  products and bauxite. Only country in the world that manufactures fuel from 
  coal.                                                                       
  Industry: Types--minerals, mining, motor vehicles and parts, machinery,     
  textiles, chemicals, fertilizer, information technology, electronics, other 
  manufacturing, and agroprocessing.                                          
  Trade (2004): Exports--$36.3 billion (2003 merchandise exports R256 billion;
  2003 gold exports R35 billion): gold, other minerals and metals, agricultural
  products, motor vehicles and parts. Major markets--U.K., U.S., Germany,     
  Italy, Japan, East Asia, Sub-Saharan Africa. Imports--$34 billion (2003     
  merchandise imports R263 billion): machinery, transport equipment, chemicals,
  petroleum products, textiles, and scientific instruments. Major suppliers   
  --Germany, U.S., Japan, U.K., Italy.                                        
  GDP composition (2003): Agriculture and mining (primary sector)--11%;       
  industry (secondary sector)--24%; services (tertiary sector)--65%. World's  
  largest producer of platinum, gold, and chromium; also significant coal     
  production.                                                                 
                                                                       
  PEOPLE                                                                      
  Until 1991, South African law divided the population into four major racial 
  categories: Africans (black), whites, coloreds, and Asians. Although this law
  has been abolished, many South Africans still view themselves and each other
  according to these categories. Black Africans comprise about 79% of the     
  population and are divided into a number of different ethnic groups. Whites 
  comprise about 10% of the population. They are primarily descendants of     
  Dutch, French, English, and German settlers who began arriving at the Cape of
  Good Hope in the late 17th century. Coloreds are mixed-race people primarily
  descending from the earliest settlers and the indigenous peoples. They      
  comprise about 9% of the total population. Asians descend from Indian workers
  brought to South Africa in the mid-19th century to work on the sugar estates
  in Natal. They constitute about 2.5% of the population and are concentrated 
  in the KwaZulu-Natal Province.                                              
                                                                       
  Education is in transition. Under the apartheid system schools were         
  segregated, and the quantity and quality of education varied significantly  
  across racial groups. The laws governing this segregation have been         
  abolished. The long and arduous process of restructuring the country's      
  educational system has begun and is ongoing. The challenge is to create a   
  single, nondiscriminatory, nonracial system that offers the same standards of
  education to all people.                                                    
                                                                       
  HISTORY                                                                     
  People have inhabited southern Africa for thousands of years. Members of the
  Khoisan language groups are the oldest surviving inhabitants of the land, but
  only a few are left in South Africa today--and they are located in the      
  western sections. Most of today's black South Africans belong to the Bantu  
  language group, which migrated south from central Africa, settling in the   
  Transvaal region sometime before AD 100. The Nguni, ancestors of the Zulu and
  Xhosa, occupied most of the eastern coast by 1500.                          
                                                                       
  The Portuguese were the first Europeans to reach the Cape of Good Hope,     
  arriving in 1488. However, permanent white settlement did not begin until   
  1652 when the Dutch East India Company established a provisioning station on
  the Cape. In subsequent decades, French Huguenot refugees, the Dutch, and   
  Germans began to settle in the Cape. Collectively, they form the Afrikaner  
  segment of today's population. The establishment of these settlements had   
  far-reaching social and political effects on the groups already settled in  
  the area, leading to upheaval in these societies and the subjugation of their
  people.                                                                     
                                                                       
  By 1779, European settlements extended throughout the southern part of the  
  Cape and east toward the Great Fish River. It was here that Dutch authorities
  and the Xhosa fought the first frontier war. The British gained control of  
  the Cape of Good Hope at the end of the 18th century. Subsequent British    
  settlement and rule marked the beginning of a long conflict between the     
  Afrikaners and the English.                                                 
                                                                       
  Beginning in 1836, partly to escape British rule and cultural hegemony and  
  partly out of resentment at the recent abolition of slavery, many Afrikaner 
  farmers (Boers) undertook a northern migration that became known as the     
  "Great Trek." This movement brought them into contact and conflict with     
  African groups in the area, the most formidable of which were the Zulus.    
  Under their powerful leader, Shaka (1787-1828), the Zulus conquered most of 
  the territory between the Drakensberg Mountains and the sea (now            
  KwaZulu-Natal).                                                             
                                                                       
  In 1828, Shaka was assassinated and replaced by his half-brother Dingane. In
  1838, Dingane was defeated and deported by the Voortrekkers (people of the  
  Great Trek) at the battle of Blood River. The Zulus, nonetheless, remained a
  potent force, defeating the British in the historic battle of Isandhlwana   
  before themselves being finally conquered in 1879.                          
                                                                       
  In 1852 and 1854, the independent Boer Republics of the Transvaal and Orange
  Free State were created. Relations between the republics and the British    
  Government were strained. The discovery of diamonds at Kimberley in 1870 and
  the discovery of large gold deposits in the Witwatersrand region of the     
  Transvaal in 1886 caused an influx of European (mainly British) immigration 
  and investment. In addition to resident black Africans, many blacks from    
  neighboring countries also moved into the area to work in the mines. The    
  construction by mine owners of hostels to house and control their workers set
  patterns that later extended throughout the region.                         
                                                                       
  Boer reactions to this influx and British political intrigues led to the    
  Anglo-Boer Wars of 1880-81 and 1899-1902. British forces prevailed in the   
  conflict, and the republics were incorporated into the British Empire. In May
  1910, the two republics and the British colonies of the Cape and Natal formed
  the Union of South Africa, a self-governing dominion of the British Empire. 
  The Union's constitution kept all political power in the hands of whites.   
                                                                       
  In 1912, the South Africa Native National Congress was founded in           
  Bloemfontein and eventually became known as the African National Congress   
  (ANC). Its goals were the elimination of restrictions based on color and the
  enfranchisement of and parliamentary representation for blacks. Despite these
  efforts the government continued to pass laws limiting the rights and       
  freedoms of blacks.                                                         
                                                                       
  In 1948, the National Party (NP) won the all-white elections and began      
  passing legislation codifying and enforcing an even stricter policy of white
  domination and racial separation known as "apartheid" (separateness). In the
  early 1960s, following a protest in Sharpeville in which 69 protesters were 
  killed by police and 180 injured, the ANC and Pan-African Congress (PAC) were
  banned. Nelson Mandela and many other anti-apartheid leaders were convicted 
  and imprisoned on charges of treason.                                       
                                                                       
  The ANC and PAC were forced underground and fought apartheid through        
  guerrilla warfare and sabotage. In May 1961, South Africa relinquished its  
  dominion status and declared itself a republic. It withdrew from the        
  Commonwealth in part because of international protests against apartheid. In
  1984, a new constitution came into effect in which whites allowed coloreds  
  and Asians a limited role in the national government and control over their 
  own affairs in certain areas. Ultimately, however, all power remained in    
  white hands. Blacks remained effectively disenfranchised.                   
                                                                       
  Popular uprisings in black and colored townships in 1976 and 1985 helped to 
  convince some NP members of the need for change. Secret discussions between 
  those members and Nelson Mandela began in 1986. In February 1990, State     
  President F.W. de Klerk, who had come to power in September 1989, announced 
  the unbanning of the ANC, the PAC, and all other anti-apartheid groups. Two 
  weeks later, Nelson Mandela was released from prison.                       
                                                                       
  In 1991, the Group Areas Act, Land Acts, and the Population Registration    
  Act--the last of the so-called "pillars of apartheid"--were abolished. A long
  series of negotiations ensued, resulting in a new constitution promulgated  
  into law in December 1993. The country's first nonracial elections were held
  on April 26-28, 1994, resulting in the installation of Nelson Mandela as    
  President on May 10, 1994.                                                  
                                                                       
  Following the 1994 elections, South Africa was governed under an interim    
  constitution establishing a Government of National Unity (GNU). This        
  constitution required the Constitutional Assembly (CA) to draft and approve a
  permanent constitution by May 9, 1996. After review by the Constitutional   
  Court and intensive negotiations within the CA, the Constitutional Court    
  certified a revised draft on December 2, 1996. President Mandela signed the 
  new constitution into law on December 10, and it entered into force on      
  February 3, 1997. The GNU ostensibly remained in effect until the 1999      
  national elections. The parties originally comprising the GNU--the ANC, the 
  NP, and the Inkatha Freedom Party (IFP)--shared executive power. On June 30,
  1996, the NP withdrew from the GNU to become part of the opposition.        
                                                                       
  During Nelson Mandela's 5-year term as President of South Africa, the       
  government committed itself to reforming the country. The ANC-led government
  focused on social issues that were neglected during the apartheid era such as
  unemployment, housing shortages, and crime. Mandela's administration began to
  reintroduce South Africa into the global economy by implementing a          
  market-driven economic plan known as Growth, Employment and Redistribution  
  (GEAR). In order to heal the wounds created by apartheid, the government    
  created the Truth and Reconciliation Commission (TRC) under the leadership of
  Archbishop Desmond Tutu. During the first term of the ANC's post-apartheid  
  rule, President Mandela concentrated on national reconciliation, seeking to 
  forge a single South African identity and sense of purpose among a diverse  
  and splintered populace, riven by years of conflict. The diminution of      
  political violence after 1994 and its virtual disappearance by 1996 were    
  testament to the abilities of Mandela to achieve this difficult goal.       
                                                                       
  Nelson Mandela stepped down as President of the ANC at the party's national 
  congress in December 1997, when Thabo Mbeki assumed the mantle of leadership.
  Mbeki won the presidency of South Africa after national elections in 1999,  
  when the ANC won just shy of a two-thirds majority in Parliament. President 
  Mbeki shifted the focus of government from reconciliation to transformation,
  particularly on the economic front. With political transformation and the   
  foundation of a strong democratic system in place after two free and fair   
  national elections, the ANC recognized the need to focus on bringing economic
  power to the black majority in South Africa. In April 2004, the ANC won     
  nearly 70% of the national vote, and Mbeki was reelected for his second     
  5-year term. In his 2004 State of the Nation address, Mbeki promised his    
  government would reduce poverty, stimulate economic growth, and fight crime.
  Mbeki said that the government would play a more prominent role in economic 
  development.                                                                
                                                                       
  GOVERNMENT AND POLITICAL CONDITIONS                                         
  South Africa is a multiparty parliamentary democracy in which constitutional
  power is shared between the president and the Parliament.                   
                                                                       
  The Parliament consists of two houses, the National Assembly and the National
  Council of Provinces, which are responsible for drafting the laws of the    
  republic. The National Assembly also has specific control over bills relating
  to monetary matters. The current 400-member National Assembly was retained  
  under the 1997 constitution, although the constitution allows for a range of
  between 350 and 400 members. The Assembly is elected by a system of "list   
  proportional representation." Each of the parties appearing on the ballot   
  submits a rank-ordered list of candidates. The voters then cast their ballots
  for a party.                                                                
                                                                       
  Seats in the Assembly are allocated based on the percentage of votes each   
  party receives. In the 2004 elections, the ANC won 279 seats in the Assembly,
  more than a two-thirds majority and an increase of 13 seats from 1999; the  
  Democratic Alliance (DA) won 50, the IFP 28, the New National Party (NNP) 7,
  the United Democratic Movement (UDM) 9, and other groups won the remaining  
  27. In the 2004 electoral campaign, the ANC aligned with the NNP, and the DA
  aligned with the IFP. On August 6, the NNP announced that it would merge with
  the ANC. Elected representatives of the party would, however, continue to   
  hold their seats in the national and provincial legislatures as NNP members 
  until the next floor-crossing period in September 2005.                     
                                                                       
  The National Council of Provinces (NCOP) consists of 90 members, 10 from each
  of the nine provinces. The NCOP replaced the former Senate as the second    
  chamber of Parliament and was created to give a greater voice to provincial 
  interests. It must approve legislation that involves shared national and    
  provincial competencies as defined by an annex to the constitution. Each    
  provincial delegation consists of six permanent and four rotating delegates.
                                                                       
  The president is the head of state. Following the April 14, 2004 elections, 
  the National Assembly reelected Thabo Mbeki as President. The president's   
  constitutional responsibilities include assigning cabinet portfolios, signing
  bills into law, and serving as commander in chief of the military. The      
  president works closely with the deputy president and the cabinet. There are
  currently 28 posts in the cabinet. Of the 28 ministers, Mbeki appointed two 
  from outside the ANC--one from the former NNP and one from the Azanian      
  Peoples Organization (Azapo). On June 14, 2005, President Mbeki informed the
  South African Parliament that then-Deputy President Jacob Zuma was being    
  "released" from his duties following the conviction of a close associate on 
  corruption charges relating to monetary payments to Zuma. On June 22, Mbeki 
  named former Minister for Minerals and Energy Phumzile Mlambo-Ngcuka to the 
  position of Deputy President, the first woman to hold this office.          
                                                                       
  The third arm of the central government is an independent judiciary. The    
  Constitutional Court is the highest court for interpreting and deciding     
  constitutional issues, while the Supreme Court of Appeal is the highest court
  for nonconstitutional matters. Most cases are heard in the extensive system 
  of High Courts and Magistrates Courts. The constitution's bill of rights    
  provides for due process including the right to a fair, public trial within a
  reasonable time of being charged and the right to appeal to a higher court. 
  The bill of rights also guarantees fundamental political and social rights of
  South Africa's citizens.                                                    
                                                                       
  Challenges Ahead                                                            
  South Africa's post-apartheid governments have made remarkable progress in  
  consolidating the nation's peaceful transition to democracy. Programs to    
  improve the delivery of essential social services to the majority of the    
  population are underway. Access to better opportunities in education and    
  business is becoming more widespread. Nevertheless, transforming South      
  Africa's society to remove the legacy of apartheid will be a long-term      
  process requiring the sustained commitment of the leaders and people of the 
  nation's disparate groups.                                                  
                                                                       
  The Truth and Reconciliation Commission (TRC), chaired by 1984 Nobel Peace  
  Prize winner Archbishop Desmond Tutu, helped to advance the reconciliation  
  process. Constituted in 1996 and having completed its work by 2001, the TRC 
  was empowered to investigate apartheid-era human rights abuses committed    
  between 1960 and May 10, 1994; to grant amnesty to those who committed      
  politically motivated crimes; and to recommend compensation to victims of   
  abuses. In November 2003, the Government began allocation of $4,600 (R30,000)
  reparations to individual apartheid victims. The TRC's mandate was part of  
  the larger process of reconciling the often conflicting political, economic,
  and cultural interests held by the many peoples that make up South Africa's 
  diverse population. The ability of the government and people to agree on many
  basic questions of how to order the country's new society will remain a     
  critical challenge.                                                         
                                                                       
  One important issue continues to be the relationship of provincial and local
  administrative structures to the national government. Prior to April 27,    
  1994, South Africa was divided into four provinces and 10 black "homelands,"
  four of which were considered independent by the South African Government.  
  Both the interim constitution and the 1997 constitution abolished this system
  and substituted nine provinces. Each province has an elected legislature and
  chief executive--the provincial premier. Although in form a federal system, 
  in practice the nature of the relationship between the central and provincial
  governments continues to be the subject of considerable debate, particularly
  among groups desiring a greater measure of autonomy from the central        
  government. A key step in defining the relationship came in 1997 when       
  provincial governments were given more than half of central government      
  funding and permitted to develop and manage their own budgets. However, the 
  national government exerts a measure of control over provinces by appointing
  provincial premiers.                                                        
                                                                       
  Although South Africa's economy is in many areas highly developed, the      
  exclusionary nature of apartheid and distortions caused in part by the      
  country's international isolation until the 1990s have left major weaknesses.
  The economy is now in a process of transition as the government seeks to    
  address the inequities of apartheid, stimulate growth, and create jobs.     
  Business, meanwhile, is becoming more integrated into the international     
  system, and foreign investment has increased dramatically over the past     
  several years. Still, the economic disparities between population groups are
  expected to persist for many years, remaining an area of priority attention 
  for the government.                                                         
                                                                       
  Human Rights                                                                
  The 1997 constitution's bill of rights provides extensive guarantees,       
  including equality before the law and prohibitions against discrimination;  
  the right to life, privacy, property, and freedom and security of the person;
  prohibition against slavery and forced labor; and freedom of speech,        
  religion, assembly, and association. The legal rights of criminal suspects  
  also are enumerated, as are citizens' entitlements to a safe environment,   
  housing, education, and health care. The constitution provides for an       
  independent and impartial judiciary, and, in practice, these provisions are 
  respected.                                                                  
                                                                       
  Since the abolition of apartheid, levels of political violence in South     
  Africa have dropped dramatically. Violent crime and organized criminal      
  activity are at high levels and are a grave concern. Partly as a result,    
  vigilante action and mob justice sometimes occur.                           
                                                                       
  Some members of the police commit abuses, and deaths in police custody as a 
  result of excessive force remain a problem. The government has taken action 
  to investigate and punish some of those who commit such abuses. In April    
  1997, the government established an Independent Complaints Directorate to   
  investigate deaths in police custody and deaths resulting from police action.
                                                                       
  Although South Africa's society is undergoing a rapid transformation, some  
  discrimination against women continues, and discrimination against those    
  living with HIV/AIDS remains. Violence against women and children also is a 
  serious problem.                                                            
                                                                       
  Principal Government Officials                                              
  State President--Thabo Mbeki                                                
  Executive Deputy President--Ms. Phumzile Mlambo-Ngcuka                      
                                                                       
  Ministers                                                                   
  Agriculture & Land Affairs--Ms. Lulana Xingwana                             
  Arts & Culture--Mr. Pallo Jordan                                            
  Communications--Dr. Ivy Matsepe-Casaburri                                   
  Correctional Services--Mr. Ngconde Balfour                                  
  Defense--Mr. Mosiuoa Lekota                                                 
  Education--Ms. Naledi Pandor                                                
  Environmental Affairs & Tourism--Mr. Marthinus van Schalkwyk                
  Finance--Mr. Trevor Manuel                                                  
  Foreign Affairs--Dr. Nkosazana Dlamini-Zuma                                 
  Health--Dr. Manto Tshabalala-Msimang                                        
  Home Affairs--Ms. Nosiviwe Mapisa-Nqakula                                   
  Housing--Ms. Lindiwe Sisulu                                                 
  Intelligence--Mr. Ronnie Kasrils                                            
  Justice & Constitutional Development--Ms. Bridgette Mabandla                
  Labor--Mr. Membathisi Mdladlana                                             
  Minerals & Energy--Ms. Buyi Sonjica                                         
  Provincial & Local Government--Mr. Sydney Mufamadi                          
  Public Enterprises--Mr. Alec Erwin                                          
  Public Service & Administration--Ms. Geraldine Fraser-Moleketi              
  Public Works--Ms. Angela Thoko Didiza                                       
  Safety & Security--Mr. Charles Nqakula                                      
  Science & Technology--Mr. Mosibudi Mangena                                  
  Social Development--Dr. Zola Skweyiya                                       
  Sport & Recreation--Mr. Makhenkesi Stofile                                  
  The Presidency--Dr. Essop Pahad                                             
  Trade & Industry--Mr. Mandisi Mpahlwa                                       
  Transport--Mr. Jeff Radebe                                                  
  Water Affairs & Forestry--Ms. Lindiwe Hendricks                             
                                                                       
  The Republic of South Africa maintains an embassy in the United States at   
  3051 Massachusetts Avenue NW, Washington, DC 20008; tel. (202) 232-4400.    
                                                                       
  ECONOMY                                                                     
  South Africa has a two-tiered economy; one rivaling other developed countries
  and the other with only the most basic infrastructure. It therefore is a    
  productive and industrialized economy that exhibits many characteristics    
  associated with developing countries, including a division of labor between 
  formal and informal sectors, and uneven distribution of wealth and income.  
  The formal sector, based on mining, manufacturing, services, and agriculture,
  is well developed.                                                          
                                                                       
  The transition to a democratic, nonracial government, begun in early 1990,  
  stimulated a debate on the direction of economic policies to achieve        
  sustained economic growth while at the same time redressing the socioeconomic
  disparities created by apartheid. The Government of National Unity's initial
  blueprint to address this problem was the Reconstruction and Development    
  Program (RDP). The RDP was designed to create programs to improve the       
  standard of living for the majority of the population by providing housing--a
  planned 1 million new homes in 5 years--basic services, education, and health
  care. While a specific "ministry" for the RDP no longer exists, a number of 
  government ministries and offices are charged with supporting RDP programs  
  and goals.                                                                  
                                                                       
  The Government of South Africa demonstrated its commitment to open markets, 
  privatization, and a favorable investment climate with its release of the   
  crucial Growth, Employment and Redistribution (GEAR) strategy--the neoliberal
  economic strategy to cover 1996-2000. The strategy had mixed success. It    
  brought greater financial discipline and macroeconomic stability but has    
  failed to deliver in key areas. Formal employment continued to decline, and 
  despite the ongoing efforts of black empowerment and signs of a fledgling   
  black middle class and social mobility, the country's wealth remains very   
  unequally distributed along racial lines. However, South Africa's budgetary 
  reforms such as the Medium-Term Expenditure Framework and the Public Finance
  Management Act--which aims at better reporting, auditing, and increased     
  accountability--and the structural changes to its monetary policy           
  framework--including inflation targeting--have created transparency and     
  predictability and are widely acclaimed. Trade liberalization also has      
  progressed substantially since the early 1990s. South Africa has reduced its
  import-weighted average tariff rate from more than 20% in 1994 to 7% in 2002.
  These efforts, together with South Africa's implementation of its World Trade
  Organization (WTO) obligations and its constructive role in launching the   
  Doha Development Round, show South Africa's acceptance of free market       
  principles.                                                                 
                                                                       
  Financial Policy                                                            
  South Africa has a sophisticated financial structure with a large and active
  stock exchange that ranks 17th in the world in terms of total market        
  capitalization. The South African Reserve Bank (SARB) performs all central  
  banking functions. The SARB is independent and operates in much the same way
  as Western central banks, influencing interest rates and controlling        
  liquidity through its interest rates on funds provided to private sector    
  banks. Quantitative credit controls and administrative control of deposit and
  lending rates have largely disappeared. South African banks adhere to the   
  Bank of International Standards core standards.                             
                                                                       
  The South African Government has taken steps to gradually reduce remaining  
  foreign exchange controls, which apply only to South African residents.     
  Private citizens are now allowed a one-time investment of up to 750,000 rand
  (R) in offshore accounts. Since 2001, South African companies may invest up 
  to R750 million in Africa and R500 million elsewhere.                       
                                                                       
  Trade and Investment                                                        
  South Africa has rich mineral resources. It is the world's largest producer 
  and exporter of gold and platinum and also exports a significant amount of  
  coal. During 2000, platinum overtook gold as South Africa's largest foreign 
  exchange earner. The value-added processing of minerals to produce          
  ferroalloys, stainless steels, and similar products is a major industry and 
  an important growth area. The country's diverse manufacturing industry is a 
  world leader in several specialized sectors, including railway rolling stock,
  synthetic fuels, and mining equipment and machinery.                        
                                                                       
  Primary agriculture accounts for about 4% of the gross domestic product.    
  Major crops include citrus and deciduous fruits, corn, wheat, dairy products,
  sugarcane, tobacco, wine, and wool. South Africa has many developed         
  irrigation schemes and is a net exporter of food.                           
                                                                       
  South Africa's transportation infrastructure is well-developed, supporting  
  both domestic and regional needs. The Johannesburg International Airport    
  serves as a hub for flights to other southern African countries. The domestic
  telecommunications infrastructure provides modern and efficient service to  
  urban areas, including cellular and Internet services. In 1997, Telkom, the 
  South African telecommunications parastatal, was partly privatized and      
  entered into a strategic equity partnership with a consortium of two        
  companies, including SBC, a U.S. telecommunications company. In exchange for
  exclusivity to provide certain services for 5 years, Telkom assumed an      
  obligation to facilitate network modernization and expansion into unserved  
  areas. The government is evaluating a proposal to establish a second network
  operator to compete with Telkom across its spectrum of services. Three      
  cellular companies provide service to over 9 million subscribers.           
                                                                       
  South Africa's GDP is expected to increase gradually during the next few    
  years, and in 2005 the government revised upward its 2005 estimated growth to
  4.3%. Annual GDP growth between 1994 and 2004 averaged 3.0%. In 2003, real  
  GDP growth slowed to a rate of 2.8%, but increased to 3.7% in 2004. The     
  government estimates that the economy must achieve growth at a minimum of 6%
  to offset unemployment, which is estimated at 28%, although unofficial      
  sources put it as high as 41%. In an effort to boost economic growth and spur
  job creation, the government has launched special investment corridors to   
  promote development in specific regions and also is working to encourage    
  small, medium, and microenterprise development. One of the great successes of
  the ANC government has been to get consumer inflation, which had been running
  in the double digits for over 20 years, under control. By 1998, inflation had
  fallen to 6.9%, and in 1999 and 2000 inflation was running at less than 6.0%.
  The rand's rapid depreciation in late 2001, however, led to greater         
  inflationary pressure, causing 2002 inflation of 9.2%. The South African    
  government cut the inflation rate to 4% in 2004, and the rand appreciated 39%
  from 2002 to 2004. The South African Reserve Bank increased interest rates  
  and along with the 28% rand appreciation in 2003 led a reduced consumer     
  inflation of 5.8%. The government also has made inroads into reducing the   
  fiscal deficit and increasing foreign currency reserves. The government     
  deficit was 1.1% of GDP in 2002 and 2.6% in 2003. The government's 2005     
  budget called for a moderate increase in spending to promote faster growth  
  and poverty alleviation, while curbing budget deficits.                     
                                                                       
  Exports reached 28.2% of GDP in 2003, up from 11.5% a decade ago. South     
  Africa's major trading partners include the United Kingdom, the United      
  States, Germany, Italy, Belgium, and Japan. South Africa's trade with other 
  Sub-Saharan African countries, particularly those in the southern Africa    
  region, has increased substantially. South Africa is a member of the Southern
  African Customs Union (SACU) and the Southern African Development Community 
  (SADC). In August 1996, South Africa signed a regional trade protocol       
  agreement with its SADC partners. The agreement was ratified in December    
  1999, and implementation began in September 2000. It intends to provide     
  duty-free treatment for 85% of trade by 2008 and 100% by 2012.              
                                                                       
  South Africa has made great progress in dismantling its old economic system,
  which was based on import substitution, high tariffs and subsidies,         
  anticompetitive behavior, and extensive government intervention in the      
  economy. The new leadership has moved to reduce the government's role in the
  economy and to promote private sector investment and competition. It has    
  significantly reduced tariffs and export subsidies, loosened exchange       
  controls, cut the secondary tax on corporate dividends, and improved        
  enforcement of intellectual property laws. A new competition law was passed 
  and became effective on September 1, 1999. A U.S.-South Africa bilateral tax
  treaty went into effect on January 1, 1998, and a bilateral trade and       
  investment framework agreement was signed in February 1999.                 
                                                                       
  South Africa is a member of the World Trade Organization (WTO). U.S. products
  qualify for South Africa's most-favored-nation tariff rates. South Africa   
  also is an eligible country for the benefits under the African Growth and   
  Opportunity Act (AGOA), and most of its products can enter the United States
  market duty free. South Africa has done away with most import permits except
  on used products and products regulated by international treaties. It also  
  remains committed to the simplification and continued reduction of tariffs  
  within the WTO framework and maintains active discussions with that body and
  its major trading partners.                                                 
                                                                       
  As a result of a November 1993 bilateral agreement, the Overseas Private    
  Investment Corporation (OPIC) can assist U.S. investors in the South African
  market with services such as political risk insurance and loans and loan    
  guarantees. In July 1996, the United States and South Africa signed an      
  investment fund protocol for a $120 million OPIC fund to make equity        
  investments in South Africa and southern Africa. OPIC is establishing an    
  additional fund--the Sub-Saharan Africa Infrastructure Fund, capitalized at 
  $350 million--for investment in infrastructure projects. The Trade and      
  Development Agency also has been actively involved in funding feasibility   
  studies and identifying investment opportunities in South Africa for U.S.   
  businesses.                                                                 
                                                                       
  HIV/AIDS                                                                    
  South Africa is one of the countries most affected by HIV, with 5 million HIV
  infected individuals. Twenty percent of the 15-49 year old population is    
  infected, and in parts of the country more than 35% of women of childbearing
  age are infected. Overall, 11-12% of the population is infected. About 1,700
  new infections occur each day, and approximately 40% of deaths are believed 
  to be AIDS-related. There are approximately 660,000 children who have lost  
  one or both parents, and by 2008 1.6 million children will have been orphaned
  by AIDS. Without effective prevention and treatment 5-7 million cumulative  
  AIDS deaths are anticipated by 2010 (with 1.5 million deaths in 2010 alone),
  and there will be over 1 million sick with AIDS. The epidemic could cost    
  South Africa as much as 17% in GDP growth by 2010. The extraction industries,
  education, and health are among the sectors that will be severely affected. A
  2003 national operational plan provides the structure for a comprehensive   
  response to HIV and AIDS, including a national rollout of antiretroviral    
  therapy.                                                                    
                                                                       
  Environment                                                                 
  South Africa's Government is committed to managing the country's rich and   
  varied natural resources in a responsible and sustainable manner. In        
  addition, numerous South African non-governmental organizations have emerged
  as a potent force in the public policy debate on the environment. In        
  international environmental organizations, South Africa is seen as a key    
  leader among developing countries on issues such as climate change,         
  conservation, and biodiversity. This leading role was underscored by South  
  Africa's selection to host the World Summit on Sustainable Development in   
  2002.                                                                       
                                                                       
  FOREIGN RELATIONS                                                           
  South African forces fought on the Allied side in World Wars I and II and   
  participated in the postwar UN force in Korea. South Africa was a founding  
  member of the League of Nations and in 1927 established a Department of     
  External Affairs with diplomatic missions in the main west European countries
  and in the United States. At the founding of the League of Nations, South   
  Africa was given the mandate to govern Southwest Africa, now Namibia, which 
  had been a German colony before World War I. In 1990, Namibia attained      
  independence, with the exception of the enclave of Walvis Bay, which was    
  reintegrated into Namibia in March 1994. After South Africa held its first  
  nonracial election in April 1994, most sanctions imposed by the international
  community in opposition to the system of apartheid were lifted. On June 1,  
  1994, South Africa rejoined the Commonwealth, and on June 23, 1994, the UN  
  General Assembly accepted its credentials. South Africa served as the African
  Union's (AU) first president from July 2003 to July 2004.                   
                                                                       
  Having emerged from the international isolation of the apartheid era, South 
  Africa has become a leading international actor. Its principal foreign policy
  objective is to promote the economic, political, and cultural regeneration of
  Africa, through the New Partnership for African Development (NEPAD); to     
  promote the peaceful resolution of conflict in Africa; and to use           
  multilateral bodies to insure that developing countries' voices are heard on
  international issues. South Africa has played a key role in seeking an end to
  various conflicts and political crises on the African continent, including in
  Burundi, the Democratic Republic of Congo, and the Comoros. South Africa has
  pursued "quiet diplomacy" in its approach to the crisis in Zimbabwe.        
                                                                       
  U.S.-SOUTH AFRICAN RELATIONS                                                
  The United States has maintained an official presence in South Africa since 
  1799, when an American consulate was opened in Cape Town. The U.S. Embassy is
  located in Pretoria, and Consulates General are in Johannesburg, Durban, and
  Cape Town. Americans and South Africans also have many nongovernmental ties;
  for example, black and white American missionaries have a long history of   
  activity in South Africa. South Africans (particularly the ANC leadership)  
  also acknowledge support from and ties to the anti-apartheid movement in the
  U.S.                                                                        
                                                                       
  From the 1970s through the early 1990s, U.S.-South Africa relations were    
  severely affected by South Africa's racial policies. However, since the     
  abolition of apartheid and democratic elections of April 1994, the United   
  States has enjoyed an excellent bilateral relationship with South Africa.   
  Although there are differences of position between the two governments--for 
  example, regarding Iraq--they do not impede cooperation on a broad range of 
  key issues. Bilateral cooperation in counter-terrorism, fighting HIV/AIDS,  
  and military relations has been particularly positive. Through the U.S.     
  Agency for International Development (USAID), the United States also provides
  assistance to South Africa to help it meet its development goals. Peace Corps
  volunteers began working in South Africa in 1997.                           
                                                                       
  Principal U.S. Officials                                                    
  Ambassador--Eric M. Bost                                                    
  Deputy Chief of Mission--Donald Teitelbaum                                  
  Commercial Counselor--Craig Allen                                           
  Economic Counselor--Perry Ball                                              
  Political Counselor--Raymond L. Brown                                       
  Management Counselor--Elizabeth Hinson                                      
  Public Affairs Officer--Mary Deane Conners                                  
  Defense and Air Attache--Col. Michael Garrison                              
  USAID Director--Carleene Dei                                                
  Agricultural Attache--Scott Reynolds                                        
  Health Attache--Clara Witt                                                  
  Consul General Cape Town--Helen La Lime                                     
  Consul General Durban--Eugene S. Young                                      
                                                                       
  The U.S. Embassy in South Africa is located at 877 Pretorius St, Pretoria; PO
  Box 9536, Pretoria 0001; tel: (27-12) 431-4000; fax: (27-12) 342-2299.      
                                                                       
  TRAVEL AND BUSINESS INFORMATION                                             
  The U.S. Department of State's Consular Information Program advises Americans
  traveling and residing abroad through Consular Information Sheets, Public   
  Announcements, and Travel Warnings. Consular Information Sheets exist for all
  countries and include information on entry and exit requirements, currency  
  regulations, health conditions, safety and security, crime, political       
  disturbances, and the addresses of the U.S. embassies and consulates abroad.
  Public Announcements are issued to disseminate information quickly about    
  terrorist threats and other relatively short-term conditions overseas that  
  pose significant risks to the security of American travelers. Travel Warnings
  are issued when the State Department recommends that Americans avoid travel 
  to a certain country because the situation is dangerous or unstable.        
                                                                       
  For the latest security information, Americans living and traveling abroad  
  should regularly monitor the Department's Bureau of Consular Affairs Internet
  web site at http://www.travel.state.gov, where the current Worldwide Caution,
  Public Announcements, and Travel Warnings can be found. Consular Affairs    
  Publications, which contain information on obtaining passports and planning a
  safe trip abroad, are also available at http://www.travel.state.gov. For    
  additional information on international travel, see http://www.usa.gov/     
  Citizen/Topics/Travel/International.shtml.                                  
                                                                       
  The Department of State encourages all U.S citizens traveling or residing   
  abroad to register via the State Department's travel registration website or
  at the nearest U.S. embassy or consulate abroad. Registration will make your
  presence and whereabouts known in case it is necessary to contact you in an 
  emergency and will enable you to receive up-to-date information on security 
  conditions.                                                                 
                                                                       
  Emergency information concerning Americans traveling abroad may be obtained 
  by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular   
  toll line 1-202-501-4444 for callers outside the U.S. and Canada.           
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