South Africa's tough nut Transferring wealth: To make democracy work, Mandela has to end economic disparity.

July 09, 1996

TWO YEARS AFTER Nelson Mandela became president of South Africa, the easy part is over. Long-term success now hinges on the government's ability to narrow the pronounced economic disadvantage of the non-white population groups.

This is a difficult task. After an initial euphoria, many whites are worried that they will be subjected to a forced redistribution of wealth. Meanwhile, recent sporadic violence suggests blacks are getting impatient about the slow pace of economic improvement.

Throughout its modern history, South Africa has been characterized by a highly concentrated ownership of the private sector.

In the years of colonial rule, the British and English-speaking South Africans controlled much of the economy. After the Nationalists came to power in 1948 and began implementing a segregationist apartheid system, they pooled together the white Afrikaners' financial resources and built banks and insurance companies which snowballed into huge industrial conglomerates. If anything, outside sanctions against apartheid only increased the Afrikaners' economic muscle in the 1980s and early 1990s as their financial institutions took over local operations from departing multinational corporations.

There is no quick and painless way for South Africa's blacks to develop similar muscle.

It is significant, though, that the secretary general of Mr. Mandela's African National Congress, Cyril Ramaphosa, is quitting the government to head an emerging black business conglomerate. "There is an over-concentration of capable people in parliament and cabinet," said Mr. Ramaphosa. "We need more black people at a senior level to begin to transform the economy, and I want to play a role."

Mr. Ramaphosa, 43, is right. South Africa faces a choice. It can either become another Zimbabwe, a country where the black majority has the political power but little else, or edge toward stability by defusing the time-bomb of extreme economic disparity.

Pub Date: 7/09/96

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