Final years of apartheid

In the 1960s South Africa had economic growth second only to that of Japan. Trade with Western countries grew, and investors from the United States, France and Britain rushed in to get a piece of the action. Resistance among blacks had been crushed. Since 1964 Mandela, leader of the African Nation Congress, had been in prison on Robben Island just off the coast from Cape Town, and it appeared that South Africa's security forces could handle any resistance to apartheid. But in the seventies this rosy picture for South Africa's whites began to fade.

In 1974, resistance to apartheid was encouraged by Portugal's withdrawal from Mozambique and Angola. Portugal could not afford to continue combating liberation movements in its colonies, which were being aided by the Soviet Union and China. South African troops withdrew from Angola in early 1976, failing to prevent the liberation forces from gaining power there, and black students in South Africa celebrated a victory of black liberation over white resistance.

In 1978 the defense minister of the Nationalist Party, P.W. Botha, became Prime Minister. Botha's all white regime was worried about the Soviet Union helping revolutionaries in South Africa, and the economy had turned sluggish. The new government noted that it was spending too much money trying to maintain the segregated homelands that had been created for blacks and the homelands were proving to be uneconomic.

Nor was maintaining blacks as a third class working well. The labor of blacks remained vital to the economy, and illegal black labor unions were flourishing. Many blacks remained too poor to make much of a contribution to the economy through their purchasing power - although they were more than 70 percent of the population. Capitalism functioned on goodwill, and it was goodwill that Botha's regime was most concerned - not for the sake of capitalism so much as it was afraid that an antidote was needed to prevent the blacks from being attracted to Communism.

The anti-apartheid movements in the United States and Europe were gaining support for boycotts against South Africa, for the withdrawal of U.S. firms from South Africa and for the release of Mandela. South Africa was becoming an outlaw in the world community of nations. Investing in South Africa by Americans and others was coming to an end.