Participation of transnational corporations in the apartheid system


Background

Prior to the termination of apartheid, the role of transnational corporations in South Africa was closely related to South Africa's international position and domestic economic structure. The international position of South Africa had been defined largely by its reliance on major developed market economies and its dominance in the southern African region. The pattern of dependency and regional strength could be seen in the structure of South Africa's foreign trade. The developed market economies were the main trading partners from which manufactured goods are imported and to which raw materials were exported. South Africa's exports to developing countries consisted mainly of manufactured goods and processed raw materials. This pattern had started to change with the industrialization of the country, but is still prevalent. Industrialization in South Africa has advanced to the stage where many capital goods are produced locally by South African firms and by subsidiaries of transnational corporations. An important feature of the process of economic development in South Africa has been the import of foreign capital and technology, in many cases through the subsidiaries of transnational corporations. Because South Africa was in political conflict with the majority of members of the international community, its government attempted to strengthen the economy and reduce dependency on foreign imports to enhance independence and minimize the potential for external influence. There is some sign that transnational corporations are decreasing their investment in South Africa. A few firms have sold or reduced their holdings, but others have expanded or newly entered the market.

Incidence

The transnational corporations in, or trading heavily with South Africa were from the NATO, EEC/EU and OECD countries, with the UK, the USA, the German Federal Republic, and Japan's corporations leading. About 60% of South African trade was with the developed market economies.

Aggravates


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