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South Africas Role in Southern Africa

  • Date Submitted: 10/13/2012 07:32 AM
  • Flesch-Kincaid Score: 26.9 
  • Words: 1502
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South Africa’s role in Southern Africa after 1994 will be discussed by involving themes such as the prospects for external capital flows to Southern Africa and there are three categories of external resources, namely, direct investments, long term non-concessional loans and development assistance (ODA). Anti-apartheid will also be looked at as well as South Africa’s regional policy since 1994.
As a starting point, some brief facts will be discussed surrounding the development of Southern Africa during the 1980’s. During the mid 1980’s, international sanctions strengthened due to South Africa’s apartheid policy and the United States of America (USA), the EC, the Nordic   countries and the Commonwealth countries sharpened their legislations regarding trade and investment relations (Oden, 1993:222). Also large international banks in August 1985 decided against renewing their long term outstanding short term loans to South African debtors and this was of great economic importance (Oden, 1993: 222). According to Oden (1993: 222) this resulted in the change of net capital outflows, in 1984 it being positive but from 1985 it turned negative and this forced the government to reintroduce the financial rand and restrict imports.
With regards to direct investments, between 1980-1984, total inflow of foreign direct investments was $1 billion whereas the disinvestments during 1985-1989 was $0.5 billion and also during this period there was a considerable amount of outflow of South African direct investment capital of   as many South African companies invested in European Countries (Oden, 1993: 223). Though according to Oden (1993: 224) for other SADC countries the picture was different and most investments during this period took place in Botswana, Swaziland and Zambia.
With regards to commercial loans, commercial long term capital in the Southern Africa was scarce and the net long term capital outflow of South Africa was negative (Oden, 1993: 224). Some of the major SADCC...


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