How secure is their future?: South Africans cannot hope for equality, growth and a powerful military presence, says Susan Willett

AFTER the euphoria of the South African elections comes the hard decision-making. The government will have to square the aspirations of ANC supporters hungry for redress of apartheid's inequities with the anxieties of the local and international business communities.

Conventional wisdom sees the interests of these groups as irreconcilable, the former requiring an expansion of public expenditure, the latter demanding monetary and fiscal discipline. But apartheid imposed an in-built constraint on domestic market expansion. The business community recognises that, in the long run, meeting the needs of the vast majority of the population is essential to growth and prosperity. The main tensions may turn out to be within the ranks of the ANC itself.

The outline of the new government's economic policies has begun to emerge. The collapse of command economies and the debates between the ANC and private industry have led the ANC to adopt a market-orientated approach towards economic policies, built on private and public sector co-operation. Evidence of this strategy can be seen in the National Economic Forum (NEE), set up in 1992 as an informal discussion group at the instigation of Derek Keys, the finance minister, and the ANC's department of economic planning, and comprising private business, organised labour and government. This body has gone a long way towards achieving consensus on a number of key economic issues.

The framework which forms the basis of the ANC's economic policy is the Reconstruction and Development Programme (RDP). Its key strategies include meeting basic needs through land reform, housing provision, supplying water, sanitation and electricity to homes, investment in public transport and infrastructure; developing human resources by improving the black education system; and diversifying the economy away from the production of primary commodities such as agricultural goods and minerals into value-added manufacturing. In essence, the RDP represents an old-fashioned Keynesian 'public works' programme designed to kick-start the economy out of its prolonged and painful recession.

While most observers agree that such programmes are urgently required, the big question is how the RDP will be financed. Conservative estimates have put the cost of this ambitious long-term plan at around R39bn (pounds 8bn). The ANC claims that finance for the RDP will come from existing revenues (taxation and state industries' income), the issuing of government bonds, and foreign grants. Given the restricted revenue base and already high level of taxation (43 per cent on average) falling mainly on whites, whom the ANC must be careful not to alienate, there is little room for increasing government revenues other than refining and improving the existing tax system.

Foreign aid contributions present an alternative source of income, and certain members of the international community, such as the US, have been quick off the mark in offering aid to support reconstruction programmes. But such grants will not be sufficient to finance the ambitious programme. And there is understandable reluctance to go to the International Monetary Fund, given the disastrous experience of structural adjustment programmes with their heavy emphasis on welfare spending cuts in sub-Saharan Africa.

The largest portions of all RDP programmes are expected to be financed from the better use of existing resources and by redirecting government spending to other priorities. But where will these savings come from? In a remarkable show of monetary restraint, the ANC budget committee has instructed all its working groups - health, education, agriculture, social welfare, police, etc - to find savings from departmental budgets. However, given the huge demands on these departments and their key role in supporting RDP objectives, substantial cuts cannot realistically be expected.

The main target for reductions is the defence budget - despite the fact that this has been reduced by 46 per cent in real terms since 1989. The reduction reflects the transition from the period of 'total onslaught', when South Africa was involved in wars in Namibia and Mozambique, to the relatively peaceful present.

Senior ANC officials, including President Nelson Mandela, have pledged themselves to reduce further the country's defence burden. The budget for 1994-95 is R10.2bn (pounds 2bn), representing 2.4 per cent of GDP. In absolute terms this level of expenditure dwarfs all other defence budgets on the African continent. The ANC proposes to cut the budget by R1.6bn by 1996.

Cuts of this magnitude will require a major defence review, which will be fiercely resisted by the military. But elements in the ANC, led by Joe Modise, the new defence minister, and including key figures in Umkhonto We Sizwe (MK), the ANC's old armed wing, are also strongly resisting cuts. The emerging debate has been characterised as the RDP versus national security, but this simplistic notion of security fails to make the connection between economic security and stability.

MK and the South African Defence Force have now merged and have arrived at a remarkable degree of consensus about the future role and strategic doctrines of the new National Defence Force (NDF). As the largest military power on the African continent, with the most professional forces, the NDF sees itself as a key player in providing regional security through peace-keeping operations and 'power projection' - occasional military intervention in the interests of regional stability. Indeed, there are likely to be growing external pressures on South Africa from the Organisation of African Unity, the Commonwealth, and even Nato members, to take on a policing role in sub-Saharan Africa, playing into the hands of the NDF, hungry for a new role.

Such operations are by no means cheap in economic or political terms, as major powers have found to their cost in Bosnia and Somalia. And once committed, it is often difficult to disengage. The NDF's proposed external role will be hard to sustain in budgetary terms, but as far as security is concerned there is even less justification. Since the resolution of conflicts in Namibia and Mozambique, and the end of the Cold War, South Africa enjoys a benign external security environment. The greatest security threat is not without, but within. The nation's endemic violence is intrinsically linked to the poverty of the vast majority of the population. The continued unfair distribution of wealth acts as a powerful disincentive for both domestic and foreign investment, resulting in a vicious spiral of poverty, violence, and militarism.

In the violence leading up to the election, SADF forces had to be deployed in Natal and the East Rand, because the police were unable to contain civil strife. SADF manpower was stretched to the limit and reservists had to be called up. Until permanent internal stability is achieved, the NDF is likely to be preoccupied with internal security problems, despite its wish to disengage from them.

While the military has successfully contained the violence in these volatile regions, its deployment does not offer a solution. The RDP, in contrast, contains the potential for breaking the legacy of violence and is thus seen by its advocates as the most fundamental instrument for stability in the new South Africa.

In essence, this is an argument about opportunity costs: maintaining a sophisticated military force prepared for any eventuality represents a considerable opportunity cost in terms of the alternative uses of this expenditure.

It is a great irony that the very people who were prepared to die for the ANC in its struggle for a new South Africa are now lobbying to preserve military structures that preclude the social spending which could create stability.

It is worrying that the UK government, with its historic links with South Africa, has chosen not to support the RDP, having dismissed it as a 'socialist' policy, but has instead targeted its aid programme at the retraining of South African security forces. Even more disconcerting is the undue haste with which British government officials and commercial agents have been attempting to secure arms deals with the new government for equipment such as Hawk trainer aircraft.

As usual, the British government's short-term interests override long-term considerations. If it is genuinely concerned about South Africa's security environment and wants to help to create a better climate for UK investment, it would be well advised to rethink its support for the security forces and concentrate on promoting those policies which will go some way to resolving South Africa's internal stability problems.

The writer is a defence economist working for the Centre for Defence Studies at Kings College, University of London. She was an independent specialist monitor for the security forces during the South African elections.

(Photograph omitted)