The frequency with which various economic instruments of statecraft are used by governments and policy makers as a means to achieve foreign policy objectives, prompted me to consider their true effectiveness. Do they accomplish their main goal; that is, to solve serious foreign policy problems, or are they simply part of broader foreign policy measures designed to signal intentions, complement diplomacy, and build political consensus (Mastanduno, 2012). To examine this topic further I will explore the basis upon which economic sanctions were imposed on South Africa in the mid- 1980’s, prior to the abolition of apartheid.
I would first like to provide a brief summary of the various economic instruments employed by governments and policy makers. These are: trade restrictions – aimed at countries that rely heavily on imports and exports; financial sanctions – designed to cut off economic or military aid; investment restrictions – particularly aimed at developing states dependent on direct foreign investment, and monetary sanctions – that is, the buying and selling of large quantities of a state’s currency with the intention of manipulating its exchange rate (Mastanduno, 2012). These different economic instruments are employed to satisfy a range of foreign policy objectives. For example, monetary sanctions were employed by the United States in 1956 against Britain. In this instance the US Treasury sold large quantities of the British pound to de-value the currency and force the British government to re-think their policy with regards to the Suez crisis (Mastanduno, 2012). In another example, financial sanctions were imposed on Chile by the US in the early 1970’s to destabilise the rule of Chilean President Salvatore Allende (Sigmund, 2009).
In 1986 – about 40 years after the beginning of Apartheid – South Africa’s most important trading partners imposed economic sanctions. The sanctions were both trade and finance based, and included the following: the import of valuable steel and iron products was sanctioned by the European Economic Community (EEC) and Japan; the import of products from partially controlled state enterprises, in addition to uranium, coal and textiles was prohibited by the US; and OPEC placed an embargo on oil (Levy, 1999).
As Mastunduno asserts, some sanctions are intended less to affect the behaviour and capabilities of a region, and more to bring about regime change (2012, p. 208). In the case of South Africa, Mastanduno states that economic sanctions were primarily intended to “isolate and force the political capitulation of the white minority regime ruling the country” (2012, p. 208). With this in mind, South African sanctions appeared to be successful. After the adoption of sanctions South Africa experienced economic difficulty, and numerous commentators at the time, and since, have expressed their belief that the economic situation was untenable, because of the imposition of sanctions, and the political change was thus needed to save South Africa. Within 10 years, Nelson Mandela had been elected President of South Africa, and he and other black leaders attributed to economic sanctions a significant role in bringing about a democratic transition (Levy, 1999).
However, within South Africa other economic factors were already contributing to that state’s poor economic performance. Firstly, labour market distortions were inherent in the apartheid system. Black South Africans constituted a majority of the population, but were restricted in their travel and the jobs they could hold. An expanding manufacturing sector created a demand for additional workers in the cities at the same time that a central goal of apartheid was to keep black South Africans out of cities and in separate homelands. In addition, South Africa’s economy was heavily dependent on external borrowing and capital, which was subject to extreme market fluctuations. By the late 1970’s and early 1980’s South Africa’s deficit was already in the order of two to three percent of GDP, leaving the state economically vulnerable prior to the effects of economic sanctions (Crawford & Klotz, 1999).
Further, many commentators suggest that the sanctions imposed on South Africa were quite limited, and subject to numerous loopholes and exception clauses. As Hufbauer, Schott, Elliott, & Oegg, (2008) assert, the reason that economic sanctions often have so minimal an impact is because they are selected primarily to suit the economic interest of the sanctioning countries, and only secondarily consider the costs on the country sanctioned. This is confirmed in the case of South Africa; for example, there were several interest groups in the United States that profited from the sanctions
on South African coal and food, and the EEC sanction on steel supported one of the EEC’s most highly protected sectors, and helped to rid European producers of one of their strongest competitors at the same time (Hufbauer et al., 2008).
Finally, the fall of the communism in Eastern Europe was instrumental in the ending of the Apartheid-era. The ruling Afrikaner government considered the ANC (African National Congress) a party of communists, ready to take South Africa into the communist bloc, however, the leadership of Mikhail Gorbachev in the mid-1980’s, and the subsequent unravelling of communism throughout Europe, left many in the ruling Afrikaner government comfortable with the notion of negotiating political deals with the ANC (Thomas, 1996). The timing of this factor is important – as once the perceived threat of communism diminished, the release of Nelson Mandela and negotiations on the democratic transition of South Africa quickly followed. In contrast, in the period immediately following the imposition of sanctions in the mid-1980’s, repression intensified, as South African President Pik Botha signalled his strong response to foreign obstruction and interference (Levy, 1999).
In conclusion, while it is difficult to argue conclusively that trade and financial sanctions failed in the case of regime change in South Africa, it may be best to argue that they played a small, contributory role. The implication is that while historically lauded as an effective and successful measure, the South African case casts doubt on the significance of economic sanctions as a lone major factor in regime change.
For the purpose of the class discussion, Nathan, Sebena, Cambpell, Megan and I (as discussion leaders) will each provide a brief summary of our own discussion points. We will then break into two groups according to our discussion focus: Nathan and I will be addressing economic statecraft, while Sebena, Campbell, and Megan will address implementation and behaviour. Following the discussions, each group will engage the other group members in an online game called ‘Kahoot’. This provides all group members the opportunity to further actively engage in the discussion process.