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Telecommunications in South Africa: Expanding Horizons

Originally appeared on Wide Angle (PBS) website, “Road to Riches” episode, 2003

Building the Networks of Privilege

Though telecommunications systems in Africa are generally less extensive and sophisticated than those in the developed world, South Africa’s telecommunications networks are among the best in all of Africa. The reasons behind this distinction, like so many other facets of its social and economic landscapes, can be traced back to the effects of apartheid on South Africa’s development.

South Africa’s telecommunications networks were built and maintained by the state-run Department of Posts and Telecommunications. Under the authority of this government agency, and therefore subject to the principles of racial discrimination, South Africa’s telecommunications infrastructure was constructed primarily to serve its white population. Telegraph systems, and later telephone lines, were concentrated around areas where commercial activity took place, such as in mining operations near Johannesburg, and inside South Africa’s urban centers. These were areas that were controlled and dominated by whites. In contrast, communications networks were not extended into rural areas where the majority of South Africa’s blacks lived. During the 1980s, telephone service was estimated to be less than one tenth as common in black regions as it was in white areas.

But sustaining the prerogatives of prejudice was an expensive endeavor. As part of its state-subsidized model of progress, the South African government pursued a cumbersome policy of manufacturing much of its own telecommunications equipment. Such isolationist strategies may have helped South Africa shield itself from the impacts of international sanctions, but they also involved the risks that the nation’s technological development would be costly and that its telecommunications infrastructure could become outdated. During the late 1970s and early 1980s, South Africa’s telecommunications industry incurred heavy debt from the process of digitizing its networks.

As support for the politics of apartheid began to wane, South Africa’s telecommunications industry began a series of striking changes. The Department of Posts and Telecommunications would soon be split in two, and South Africa’s new telecommunications entity would be released from direct ministerial control.

Entering the Global Marketplace

In October of 1991, Telkom South Africa was formed out of the ashes of the Department of Posts and Telecommunications. Telkom controlled the domestic market and the government was its sole shareholder, but it was to be run essentially like a private company, and over the next decade it would become an emblem of South Africa’s entry into the global marketplace.

The inequities built into South Africa’s communications networks made the reassessment of the telecommunications industry an important issue to the African National Congress government under Nelson Mandela. The democratization of South Africa’s telecommunications networks was seen by many to be an important step in raising the living standards of the people of South Africa. Government initiatives such as the New Partnership for Africa’s Development (NEPAD) directly linked access to communication technologies, such as a telephone or the Internet, to expanded economic and educational opportunities. In order to spur development in rural areas, the Telecoms Act of 1996 granted Telkom a continued monopoly of South Africa’s fixed-line telecommunications market in return for an agreement that the company would create 2.8 million new lines with an emphasis on connecting previously underdeveloped areas.

Since then, South Africa has made considerable steps in restructuring its telecommunications industry. After he was elected president in 1999, Thabo Mbeki ushered in a more economically conservative administration and new views on how best to encourage business development in South Africa. In a bold move toward privatization, on March 4, 2003, 30 percent of the South African government’s shares of Telkom were listed for sale on the New York and Johannesburg stock exchanges. The Telkom offering also reaffirmed the South African government’s commitment to black economic empowerment: “historically disadvantaged” South Africans were eligible to buy Telkom shares at a 20 percent discount.

Even more recently, the South African government has stepped up efforts to deregulate its telecommunications industry by establishing a second network operator and ending Telkom’s monopoly. In some parts of South Africa, monthly telephone service can cost as much as an average worker’s monthly wage. Many economists believe that increased competition will lower prices and make telephone service more accessible to poor South Africans. Proponents of deregulation also cite the success of South Africa’s cellular phone market, which has thrived over recent years despite the addition of new players in the industry. According to Cellular Online, 13 million South Africans were using mobile phones in 2002 and estimates indicate that this number could grow to 21 million users by 2006.

However, important political organizations such as the powerful union consortium COSATU have taken issue with President Mbeki’s moves to deregulate the industry. These critics point out that a free market would encourage new businesses to focus on the more profitable urban and cellular markets and ignore the need to develop South Africa’s telecommunications infrastructure in rural areas.

In many ways, the struggles of South Africa’s telecommunications industry are representative of the issues currently facing the nation as a whole. As South Africa moves into its second decade of democracy, correcting the inequalities left behind by apartheid, improving the living standards of its poor, and becoming a part of the global marketplace will all be critical to South Africa’s continued renaissance.

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Mining in South Africa: The Industrialization of a Young Nation

Originally appeared on Wide Angle (PBS) website, “Road to Riches” episode, 2003

South Africa’s Gold Rush

South Africa is a land rich in mineral resources including diamonds, platinum, aluminum, coal, and gold; mining in the region dates back to the early Iron Age. The story of mining in South Africa, and especially of its gold mining industry, is closely intertwined with the story of the nation’s modern industrial development.

The news that diamonds had been discovered near Kimberly in 1867 and gold in the Witwatersrand area in 1886 immediately caught the attention of the colonial powers of Europe. Newly acquired technologies such as steamships and railroads made it both feasible and profitable to penetrate the African interior and extract its precious resources. Tensions were soon rekindled as an influx of prospectors, mostly British, began to encroach upon Dutch territories in South Africa. Disputes over mining and commercial rights and armed skirmishes culminated in the onset of The Anglo-Boer (Dutch) War in 1899. After a series of initial defeats, British forces began a steady advance into the Boer states and, under General Lord Roberts, eventually defeated the Dutch resistance. In May 1902 the Treaty of Vereeniging set the jewel of South Africa in the English Crown, but the costly war left behind bitter feelings that would reverberate through South African politics and society.

With the South African territories firmly under British control, the last obstacle to the rapid expansion of the mining industry had been cleared. The new wealth brought into the country by large mining houses such as De Beers and Johannesburg Consolidated Investments soon underpinned the South African economy and became the driving force behind its rapid industrialization. Yet while mining operations continually sought out new technologies to increase their efficiency and output, they still had a great need for African manpower. In order to maximize profits, the mining industry utilized concepts of racial privilege to create an inexpensive and malleable black work force. In addition to stagnant wages and a color bar that kept blacks in unskilled positions, South Africa’s laws required black miners to return to their impoverished rural “homelands” when they weren’t working in the mines. These patterns of migration were eventually woven into the fabric of South Africa’s landscape: By 1960, 80 percent of whites resided in urban areas while a nearly equal percentage of South Africa’s black majority lived in rural areas.

To some, the government’s acceptance of the newly formed black National Union of Mineworkers in 1982 and the miner’s strike of 1987 exposed a small seam in the rigid foundation of apartheid.

The Challenge of Transformation

Recently, the South African government has begun to seek reparations for apartheid’s impact on miners. The landmark Broad-Based Socio-Economic Empowerment Charter for the Mining Industry in 2002 stated that a 15 percent stake in all mining operations would have to be owned by historically disadvantaged peoples within five years, and 26 percent by the end of a decade. Though the Mining Charter has helped some black entrepreneurs get a foothold in the mining industry, it has also caused a measure of uncertainty in the financial sector. Critics point out that broad legislative acts such as the Mining Charter and high-profile lawsuits against companies active in South Africa during apartheid encourage businesses and investors to seek more stable markets in other countries. Uncertainty about the future of South Africa’s mining industry can have a ripple effect throughout South Africa’s economy, creating volatility in the Johannesburg Stock Exchange and even influencing the strength of the rand.

The struggles of South Africa’s mining industry are also linked to the nation’s high unemployment rate, which is currently estimated to be 40 percent of the entire population. The number of people employed in mining has been reduced by more than half since it peaked at 534,000 in 1986. Higher wages for workers have likely contributed to the mining industry’s shrinking work force. The wages of black mine workers were kept extremely low under the rules of apartheid (in 1969 some workers were paid as little as 34 cents a day), but miners have recently fought for and gained significant increases in their pay. The increased cost of labor has led many companies to adopt capital-intensive development plans in an attempt to minimize their dependence on labor.

South Africa is still the world leader in gold production, but the South African economy has gradually become less dependent on gold. However, despite the waning of South Africa’s gold mining industry and the rise of its manufacturing and service sectors, the larger mining sector remains an important component of the nation’s economy. Currently, mineral exports still account for roughly one quarter of South Africa’s export market and seven percent of its entire gross domestic product.

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Winemaking in South Africa: The Roots of Colonization

Originally appeared on Wide Angle (PBS) website, “Road to Riches” episode, 2003

The Dutch Arrive in South Africa

The beginnings of winemaking in South Africa coincide with the arrival of Dutch settlers to the future republic’s Western Cape in 1652. Commander Jan van Riebeeck had been sent to Table Bay by the Dutch East India Company to establish a foothold at the southern tip of the “dark continent” where the company’s vessels could stop to perform repairs and take on supplies along the route to the lucrative trading posts of the East Indies.

Upon noticing the native peoples eating berries from a species of vine, van Riebeeck wondered if grapevines would thrive in the Cape’s soil alongside the more mundane local fruits and vegetables. Van Riebeeck pointed out to his seniors in Holland that a ration of wine was known to reduce the outbreak of scurvy on long seafaring voyages, and vine shoots were soon dispatched to him. The first cuttings were planted in 1655, and in February of 1659 van Riebeeck wrote, “Today, praise the Lord, wine was pressed from Cape grapes for the first time.”

During the next century, viticulture continued to expand along with the colonization of the Cape region. At the end of the 17th century, winemaking expanded and became more refined under the influence of French Huguenots who had come to South Africa to flee religious persecution. During the 1700s, South Africa garnered an international reputation for Constantia’s dessert wines, which were reportedly a favorite of Napoleon’s while he was in exile in St. Helena. However, during the latter half of the 19th century, South Africa’s vineyards were decimated by war and disease.

During the 20th century, South Africa’s wine industry suffered under apartheid. Wine production and distribution largely came under the authority of the Ko-operatiewe Wijnbouwers Vereeniging van Zuid-Afrika, which set quotas and controlled the market. Practices such as bootlegging and false labeling were used to dodge international sanctions against South African wine, and the quality of the wines being produced went into decline as vintners were unable to import new and healthy vines. Finally, South Africa’s winemaking industry contracted as it was forced to rely solely upon its lackluster domestic market.

Black vineyard laborers suffered as well. Under the Natives Land Act of 1913, black farm workers had no rights to the land they cultivated, and the “tot” system allowed vineyard operators to pay their unskilled laborers at least partly with the liquor they produced, helping create and maintain patterns of poverty and alcoholism.

New Beginnings

Today, winemaking has become a leading component in South Africa’s agricultural sector. South Africa is currently the seventh-largest wine producer in the world, and exports of South African wine rose by an astounding 26 percent in 2002 alone. Tourism, another rising star in the South African economy, has also increased in South Africa’s wine-producing Cape region as the country has reemerged as a producer of internationally known fine wines.

One reason for the recent success of South Africa’s wine industry has been the drastic improvement in the quality of its product. Not possessing the delicate soils or extended winemaking traditions that Europe has, South African winemakers have turned to technology to aid them in their quest to craft the perfect vintage. Some South African vineyards have utilized high-tech tools such as remote sensing, Global Positioning System, and satellite imagery to help them position their crops in optimal growing conditions and to maximize their harvest. The use of such sophisticated methods has helped South African winemakers improve the consistency and quality of their wines more quickly and with less trial and error.

South African winemakers have also gained recognition recently for having embraced sustainable agricultural practices. In 1998, the Integrated Production of Wine (IPW) system was created to promote environmentally friendly growing practices in South Africa. Today, more than 98 percent of South Africa’s grapes are grown according to IPW guidelines.

Another bright spot for South Africa’s wine industry can be found in its various grassroots black economic empowerment projects. Though progress has sometimes been more symbolic than systemic, South Africa’s wine industry has taken some innovative steps toward making amends for injustices committed under the rule of apartheid.

New Beginnings, the first black-owned winery in South Africa, has become a model for small-scale black empowerment projects. According to the New Beginnings paradigm, black farm workers are allowed to purchase arable land or equipment from an existing winery and use its production facilities to create their own special label wines. As projects such as New Beginnings have evolved, they have fostered the development of other educational and social outreach programs in historically underserved agricultural communities. In one area, a radio drama entitled “Sommernet” (which, loosely translated, means “merely”) highlights social issues and promotes interpersonal skills and training to local farm workers.

From booming consumer demand to the negotiation of a tax-free export agreement with Europe, South Africa has seen an upsurge in international support for the fruits of its post-apartheid winemaking labors. But the keys to continued prosperity for South Africa’s wine industry will lie in its ability to adapt to the demands of the global market, an expanded output capacity without a loss in quality, and in sustained consumer support for its transformation efforts.