SOUTH Africa's $31.5 billion annual budget has focused attention
on the urgent need for political reform and joint management of the
The proposed budget, released last week, is likely to be the last
budget devised by whites for a population dominated 5-to-1 by
blacks. It sought to lay the basis for a process of social
upliftment through economic growth. But what it could not hide was
that economic apartheid, in areas such as social welfare pensions
and state spending on education, would outlive political apartheid.
Limited growth prospects were highlighted by a deepening
recession and a 1 percent decline in the gross domestic product,
compared with a 2 percent growth rate in 1989.
"The government was unable to put its money where its political
mouth is," said a Western diplomat. "But at least it moved in that
Most economists felt the budget, through concessions to industry,
had achieved a desirable balance between being redistributive -
mainly through heavier taxation of whites and the new system of a
value-added tax - and stimulatory.
Finance Minister Barend Du Plessis set as the theme of the budget
"equity, growth, and stability," insisting that only economic growth
could ensure political reform. He sought to achieve equity through a
modest increase in social spending - up from 36.5 percent to 38.2
percent of the budget.
"You can't fault the finance minister's intentions," says
Frederik van Zyl Slabbert, co-director of the Institute for a
Democratic Alternative for South Africa. "He pressed all the right
buttons within the severe restraints he faced."
Mr. Du Plessis seeks growth by stimulating the manufacturing
sector and stability through increased spending on an expanded and
modernized police force. But he was criticized by the African
National Congress for not going far enough on social spending and
for failing to meet black aspirations. ANC criticism was based on
the fact that the budget didn't achieve immediate racial parity
throughout the economy.
"One has to look at this against the background of the political
process where the trend is towards dialogue and joint management
committees," says Dr. Van Zyl Slabbert. He says that if the ANC and
other black groups are not part of formulating the next budget, it
will be a signal that the political process is running into serious
Once the ANC is part of this process, it will have to take joint
responsibility for setting budget priorities. …