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U.S. Department of State

Diplomacy in Action

South Africa (07/09)


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Flag of South Africa is two equal-width horizontal bands of red (top) and blue separated by a central green band which splits into a horizontal Y, the arms of which end at the corners of the hoist side; the Y embraces a black isosceles triangle from which the arms are separated by narrow yellow bands; the red and blue bands are separated from the green band and its arms by narrow white stripes.

PROFILE

OFFICIAL NAME:
Republic of South Africa

Geography
Area: 1.2 million sq. km. (470,462 sq. mi.).
Cities: Capitals--administrative, Pretoria; legislative, Cape Town; judicial, Bloemfontein. Other cities--Johannesburg, Durban, Port Elizabeth.
Terrain: Plateau, savanna, desert, mountains, coastal plains.
Climate: moderate; similar to southern California.

People
Nationality: Noun and adjective--South African(s).
Annual growth rate (2006 World Bank Group): 1.1%.
Population (2009, 49.1 million): Composition--black 79.7%; white 9.1%; colored 8.8%; Asian (Indian) 2.2%. Official figures from 2007 South African Census at http://www.statssa.gov.za.
Languages: Afrikaans, English, isiNdebele, isiXhosa, isiZulu, Sepedi, Sesotho, Setswana, siSwati, Tshivenda, and Xitsonga (all official languages).
Religions: Predominantly Christian; traditional African, Hindu, Muslim, Jewish.
Education: Years compulsory--7-15 years of age for all children. The South African Schools Act, Act 84 of 1996, passed by Parliament in 1996, aims to achieve greater educational opportunities for black children, mandating a single syllabus and more equitable funding for schools.
Health: Infant mortality rate (2009)--45.11 deaths per 1,000 live births. Life expectancy--52 yrs. women; 49 yrs. men. Health data from 2007 Census Report: http://www.statssa.gov.za.

Government
Type: Parliamentary democracy.
Independence: The Union of South Africa was created on May 31, 1910; became sovereign state within British Empire in 1934; became a republic on May 31, 1961; left the Commonwealth in October 1968; rejoined the Commonwealth in June 1994.
Constitution: Entered into force February 3, 1997.
Branches: Executive--president (chief of state) elected to a 5-year term by the National Assembly. Legislative--bicameral Parliament consisting of 490 members in two chambers. National Assembly (400 members) elected by a system of proportional representation. National Council of Provinces consisting of 90 delegates (10 from each province) and 10 nonvoting delegates representing local government. Judicial--Constitutional Court interprets and decides constitutional issues; Supreme Court of Appeal is the highest court for interpreting and deciding non-constitutional matters.
Administrative subdivisions: Nine provinces: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Mpumalanga, North-West, Northern Cape, Limpopo, Western Cape.
Political parties: African National Congress (ANC), Democratic Alliance (DA), Inkatha Freedom Party (IFP), Vryheidsfront Plus/Freedom Front Plus (FF+), Pan-African Congress (PAC), African Christian Democratic Party (ACDP), United Democratic Movement (UDM), and Azanian Peoples Organization (AZAPO).
Suffrage: Citizens and permanent residents 18 and older.

Economy
GDP (2008): $277 billion.
Real GDP growth rate (2008): 3.1%.
GDP per capita (2008): $5,684.
Unemployment (first quarter 2009): 23.5%.
Natural resources: Almost all essential commodities, except petroleum products and bauxite. Only country in the world that manufactures fuel from coal.
Industry: Types--minerals, mining, motor vehicles and parts, machinery, textiles, chemicals, fertilizer, information technology, electronics, other manufacturing, and agro-processing.
Trade (2008): Exports--$79.5 billion; merchandise exports: minerals and metals, motor vehicles and parts, agricultural products. Major markets--Japan, U.S., Germany, China, U.K., sub-Saharan Africa. Imports--$88.2 billion: machinery, transport equipment, chemicals, petroleum products, textiles, and scientific instruments. Major suppliers--China, Germany, U.S., Saudi Arabia, Japan.
GDP composition (2008): Agriculture and mining (primary sector)--8%; industry (secondary sector)--21%; services (tertiary sector)--71%. World's largest producer of platinum, gold, and chromium; also significant coal and diamond production.

PEOPLE
Until 1991, South African law divided the population into four major racial categories: Africans (black), whites, coloreds, and Asians. Although this law has been abolished, many South Africans still view themselves and each other according to these categories. Black Africans comprise about 80% of the population and are divided into a number of different ethnic groups. Whites comprise just over 9% of the population. They are primarily descendants of Dutch, French, German, and English settlers who began arriving at the Cape of Good Hope in the late 17th century. Coloreds are mixed-race people primarily descending from the earliest settlers and the indigenous peoples. They comprise about 9% of the total population. Asians are descended from Indian workers brought to South Africa in the mid-19th century to work on the sugar estates in Natal. They constitute about 2.2% of the population and are concentrated in the KwaZulu-Natal Province.

Education is in transition. Under the apartheid system schools were segregated, and the quantity and quality of education varied significantly across racial groups. The laws governing this segregation have been abolished. The long and arduous process of restructuring the country's educational system is ongoing. The challenge is to create a single, nondiscriminatory, nonracial system that offers the same standards of education to all people in each of the eleven official South African languages.

HISTORY
People have inhabited southern Africa for thousands of years. Members of the Khoisan language groups are the oldest surviving inhabitants of the land, but only a few are left in South Africa today--and they are located in the western sections. Most of today's black South Africans belong to the Bantu language group, which migrated south from central Africa, settling in the Transvaal region sometime before AD 100. The Nguni, ancestors of the Zulu and Xhosa, occupied most of the eastern coast by 1500.

The Portuguese were the first Europeans to reach the Cape of Good Hope, arriving in 1488. However, permanent white settlement did not begin until 1652 when the Dutch East India Company established a provisioning station on the Cape. In subsequent decades, French Huguenot refugees, the Dutch, and Germans began to settle in the Cape. Collectively, they form the Afrikaner segment of today's population. The establishment of these settlements had far-reaching social and political effects on the groups already settled in the area, leading to upheaval in these societies and the subjugation of their people.

By 1779, European settlements extended throughout the southern part of the Cape and east toward the Great Fish River. It was here that Dutch authorities and the Xhosa fought the first frontier war. The British gained control of the Cape of Good Hope at the end of the 18th century. Subsequent British settlement and rule marked the beginning of a long conflict between the Afrikaners and the English.

Beginning in 1836, partly to escape British rule and cultural hegemony and partly out of resentment at the recent abolition of slavery, many Afrikaner farmers (Boers) undertook a northern migration that became known as the "Great Trek." This movement brought them into contact and conflict with African groups in the area, the most formidable of which were the Zulus. Under their powerful leader, Shaka (1787-1828), the Zulus conquered most of the territory between the Drakensberg Mountains and the sea (now KwaZulu-Natal).

In 1828, Shaka was assassinated and replaced by his half-brother Dingane. In 1838, Dingane was defeated and deported by the Voortrekkers (people of the Great Trek) at the battle of Blood River. The Zulus, nonetheless, remained a potent force, defeating the British in the historic battle of Isandhlwana before themselves being finally conquered in 1879.

In 1852 and 1854, the independent Boer Republics of the Transvaal and Orange Free State were created. Relations between the republics and the British Government were strained. The discovery of diamonds at Kimberley in 1870 and the discovery of large gold deposits in the Witwatersrand region of the Transvaal in 1886 caused an influx of European (mainly British) immigration and investment. In addition to resident black Africans, many blacks from neighboring countries also moved into the area to work in the mines. The construction by mine owners of hostels to house and control their workers set patterns that later extended throughout the region.

Boer reactions to this influx and British political intrigues led to the Anglo-Boer Wars of 1880-81 and 1899-1902. British forces prevailed in the conflict, and the republics were incorporated into the British Empire. In May 1910, the two republics and the British colonies of the Cape and Natal formed the Union of South Africa, a self-governing dominion of the British Empire. The Union's constitution kept all political power in the hands of whites.

In 1912, the South Africa Native National Congress was founded in Bloemfontein and eventually became known as the African National Congress (ANC). Its goals were the elimination of restrictions based on color and the enfranchisement of and parliamentary representation for blacks. Despite these efforts the government continued to pass laws limiting the rights and freedoms of blacks.

In 1948, the National Party (NP) won the all-white elections and began passing legislation codifying and enforcing an even stricter policy of white domination and racial separation known as "apartheid" (separateness). In the early 1960s, following a protest in Sharpeville in which 69 protesters were killed by police and 180 injured, the ANC and Pan-African Congress (PAC) were banned. Nelson Mandela and many other anti-apartheid leaders were convicted and imprisoned on charges of treason.

The ANC and PAC were forced underground and fought apartheid through guerrilla warfare and sabotage. In May 1961, South Africa relinquished its dominion status and declared itself a republic. It withdrew from the Commonwealth in part because of international protests against apartheid. In 1984, a new constitution came into effect in which whites allowed coloreds and Asians a limited role in the national government and control over their own affairs in certain areas. Ultimately, however, all power remained in white hands. Blacks remained effectively disenfranchised.

Popular uprisings in black and colored townships in 1976 and 1985 helped to convince some NP members of the need for change. Secret discussions between those members and Nelson Mandela began in 1986. In February 1990, State President F.W. de Klerk, who had come to power in September 1989, announced the unbanning of the ANC, the PAC, and all other anti-apartheid groups. Two weeks later, Nelson Mandela was released from prison.

In 1991, the Group Areas Act, Land Acts, and the Population Registration Act--the last of the so-called "pillars of apartheid"--were abolished. A long series of negotiations ensued, resulting in a new constitution promulgated into law in December 1993. The country's first nonracial elections were held on April 26-28, 1994, resulting in the installation of Nelson Mandela as President on May 10, 1994.

Following the 1994 elections, South Africa was governed under an interim constitution establishing a Government of National Unity (GNU). This constitution required the Constitutional Assembly (CA) to draft and approve a permanent constitution by May 9, 1996. After review by the Constitutional Court and intensive negotiations within the CA, the Constitutional Court certified a revised draft on December 2, 1996. President Mandela signed the new constitution into law on December 10, and it entered into force on February 3, 1997. The GNU ostensibly remained in effect until the 1999 national elections. The parties originally comprising the GNU--the ANC, the NP, and the Inkatha Freedom Party (IFP)--shared executive power. On June 30, 1996, the NP withdrew from the GNU to become part of the opposition.

During Nelson Mandela's 5-year term as President of South Africa, the government committed itself to reforming the country. The ANC-led government focused on social issues that were neglected during the apartheid era such as unemployment, housing shortages, and crime. Mandela's administration began to reintroduce South Africa into the global economy by implementing a market-driven economic plan known as Growth, Employment and Redistribution (GEAR). In order to heal the wounds created by apartheid, the government created the Truth and Reconciliation Commission (TRC) under the leadership of Archbishop Desmond Tutu. During the first term of the ANC's post-apartheid rule, President Mandela concentrated on national reconciliation, seeking to forge a single South African identity and sense of purpose among a diverse and splintered populace, riven by years of conflict. The diminution of political violence after 1994 and its virtual disappearance by 1996 were testament to the abilities of Mandela to achieve this difficult goal.

Nelson Mandela stepped down as President of the ANC at the party's national congress in December 1997, when Thabo Mbeki assumed the mantle of leadership. Mbeki won the presidency of South Africa after national elections in 1999, when the ANC won just shy of a two-thirds majority in Parliament. President Mbeki shifted the focus of government from reconciliation to transformation, particularly on the economic front. With political transformation and the foundation of a strong democratic system in place after two free and fair national elections, the ANC recognized the need to focus on bringing economic power to the black majority in South Africa. In April 2004, the ANC won nearly 70% of the national vote, and Mbeki was reelected for his second 5-year term. In his 2004 State of the Nation address, Mbeki promised his government would reduce poverty, stimulate economic growth, and fight crime. Mbeki said that the government would play a more prominent role in economic development. Despite the fact that he was prevented by term limits from running for a third term as State President, Mbeki ran for a third term as ANC chair in party elections in December 2007. He was defeated by Jacob Zuma, an ANC stalwart with a populist following, a result that signaled widespread dissatisfaction with Mbeki's remote governing style, and his government's failure to adequately address poverty and other development issues. On September 20, 2008, Mbeki was "recalled" by the ANC and replaced by Kgalema Motlanthe as President on September 25. Motlanthe served the remainder of Mbeki's term until national elections were held on April 22, 2009. The ANC won by a landslide but fell just short of a two-thirds majority in Parliament. Jacob Zuma was inaugurated as President on May 9, 2009.

GOVERNMENT AND POLITICAL CONDITIONS
South Africa is a multiparty parliamentary democracy in which constitutional power is shared between the president and the Parliament.

The Parliament consists of two houses, the National Assembly and the National Council of Provinces, which are responsible for drafting the laws of the republic. The National Assembly also has specific control over bills relating to monetary matters. The current 400-member National Assembly was retained under the 1997 constitution, although the constitution allows for a range of between 350 and 400 members. The Assembly is elected by a system of "list proportional representation." Each of the parties appearing on the ballot submits a rank-ordered list of candidates. The voters then cast their ballots for a party.

Seats in the Assembly are allocated based on the percentage of votes each party receives. In the 2009 elections, the ANC won 264 seats in the Assembly, less than a two-thirds majority and a decrease of 15 seats from 2004; the Democratic Alliance (DA) won 67, the Congress of the People (COPE) 30, the Inkatha Freedom Party (IFP) 18, the Independent Democrats (ID) 4, the United Democratic Movement (UDM) 4, the Vryheidsfront Plus 4, the African Christian Democratic Party (ACDP) 3, the United Christian Democratic Party (UCDP) 2, the Pan Africanist Congress of Azania (PAC) 1, the Minority Front (MF) 1, the Azanian People’s Organization (AZAPO) 1, and African People’s Convention 1 seat. A new Assembly will be elected in 2014.

The National Council of Provinces (NCOP) consists of 90 members, 10 from each of the nine provinces. The NCOP replaced the former Senate as the second chamber of Parliament and was created to give a greater voice to provincial interests. It must approve legislation that involves shared national and provincial competencies as defined by an annex to the constitution. Each provincial delegation consists of six permanent and four rotating delegates.

The president is the head of state, and is elected by the National Assembly from among its members. Following the April 22, 2009 elections, the Assembly elected Jacob Zuma as President. The president's constitutional responsibilities include assigning cabinet portfolios, signing bills into law, and serving as commander in chief of the military. The president works closely with the deputy president and the cabinet.

On December 18, 2007, the African National Congress elected Jacob Zuma to the post of ANC President after a hard-fought campaign between Zuma and Thabo Mbeki, who was seeking an unprecedented third term as party president. Despite Zuma’s victory, Mbeki remained the country's President until September 2008, following a shake-up and internecine purge that displaced pro-Mbeki officers and allies in the Parliament, the government, and the party. The composition of the ANC National Executive Committee (NEC) membership shifted profoundly, replacing Mbeki’s allies with Zuma’s supporters. The newly elected ANC Deputy President, Kgalema Motlanthe, was made a Member of Parliament in February, then a Member of Cabinet in May 2008, with the expectation that he would facilitate a smooth transition from the Mbeki to the Zuma administration. However, following a September 2008 court judgment in Zuma’s long-running corruption trial, the judge suggested that it was possible that Zuma was a victim of an Mbeki-led political conspiracy and persecution in the form of a criminal prosecution. Within two weeks after the ruling, the pro-Zuma NEC demanded Mbeki step down as President, and Motlanthe was elevated to the presidency as a seven-month caretaker.

Elections on April 22, 2009 resulted in an ANC majority in Parliament which led to Zuma’s appointment as South Africa’s fourth post-apartheid president. Following his May 2009 inauguration as President of the country, Zuma found it necessary to restructure the disposition of ministries in an effort to enhance the overall efficiency of government. He accomplished this by splitting some old ministries and adding new ones.

The third arm of the central government is an independent judiciary. The Constitutional Court is the highest court for interpreting and deciding constitutional issues, while the Supreme Court of Appeal is the highest court for nonconstitutional matters. Most cases are heard in the extensive system of High Courts and Magistrates Courts. The constitution's bill of rights provides for due process including the right to a fair, public trial within a reasonable time of being charged and the right to appeal to a higher court. The bill of rights also guarantees fundamental political and social rights of South Africa's citizens.

Challenges Ahead
South Africa's post-apartheid governments have made remarkable progress in consolidating the nation's peaceful transition to democracy. Programs to improve the delivery of essential social services to the majority of the population are underway. Access to better opportunities in education and business is becoming more widespread. Nevertheless, transforming South Africa's society to remove the legacy of apartheid will be a long-term process requiring the sustained commitment of the leaders and people of the nation's disparate groups.

The Truth and Reconciliation Commission (TRC), chaired by 1984 Nobel Peace Prize winner Archbishop Desmond Tutu, helped to advance the reconciliation process. Constituted in 1996 and having completed its work by 2001, the TRC was empowered to investigate apartheid-era human rights abuses committed between 1960 and May 10, 1994; to grant amnesty to those who committed politically motivated crimes; and to recommend compensation to victims of abuses. In November 2003, the government began allocation of $4,600 (R30,000) reparations to individual apartheid victims. The TRC's mandate was part of the larger process of reconciling the often conflicting political, economic, and cultural interests held by the many people that make up South Africa's diverse population. The ability of the government and people to agree on many basic questions of how to order the country's society remains a critical challenge.

One important issue continues to be the relationship of provincial and local administrative structures to the national government. Prior to April 27, 1994, South Africa was divided into four provinces and 10 black "homelands," four of which were considered independent by the South African Government. Both the interim constitution and the 1997 constitution abolished this system and substituted nine provinces. Each province has an elected legislature and chief executive--the provincial premier. Although in form a federal system, in practice the nature of the relationship between the central and provincial governments continues to be the subject of considerable debate, particularly among groups desiring a greater measure of autonomy from the central government. A key step in defining the relationship came in 1997 when provincial governments were given more than half of central government funding and permitted to develop and manage their own budgets. However, the national government exerts a measure of control over provinces by appointing provincial premiers.

Although South Africa's economy is in many areas highly developed, the exclusionary nature of apartheid and distortions caused in part by the country's international isolation until the 1990s have left major weaknesses. The economy is in a process of transition as the government seeks to address the inequities of apartheid, stimulate growth, and create jobs. Business, meanwhile, is becoming more integrated into the international system, and foreign investment has increased. Still, the economic disparities between population groups are expected to persist for many years, remaining an area of priority attention for the government.

Human Rights
The 1997 constitution's bill of rights provides extensive guarantees, including equality before the law and prohibitions against discrimination; the right to life, privacy, property, and freedom and security of the person; prohibition against slavery and forced labor; and freedom of speech, religion, assembly, and association. The legal rights of criminal suspects also are enumerated. The constitution provides for an independent and impartial judiciary, and, in practice, these provisions are respected. Economic rights articulated in the constitution concerning a safe environment, housing, education, and healthcare are not systematically enforced.

Since the abolition of apartheid, levels of political violence in South Africa have dropped dramatically. Violent crime and organized criminal activity are at high levels and are a grave concern. Partly as a result, vigilante action and mob justice sometimes occur.

Some members of the police commit abuses, and deaths in police custody as a result of excessive force remain a problem. The government has taken action to investigate and punish some of those who commit such abuses. In April 1997, the government established an Independent Complaints Directorate to investigate deaths in police custody and deaths resulting from police action.

Although South Africa's society is undergoing a rapid transformation, some discrimination against women continues, and discrimination against those living with HIV/AIDS remains. Violence against women and children also is a serious problem.

Principal Government Officials
State President--Jacob Gedleyihlekisa Zuma
Executive Deputy President--Kgalema Petrus Motlanthe

Ministers
Agriculture, Forestry and Fisheries--Tina Joemat-Pettersson
Arts and Culture--Lulu M. Xingwana
Basic Education--M. Angie Motshekga
Communications--Siphiwe Nyanda
Cooperative Governance and Traditional Affairs--Sicelo Shiceka
Correctional Services--Nosiviwe Mapisa-Nqakula
Defense and Military Veterans--Lindiwe N. Sisulu
Economic Development--Ebrahim Patel
Energy--E. Dipuo Peters
Finance--Pravin J. Gordhan
Health--P. Aaron Motsoaledi
Higher Education and Training--Blade E. Nzimande
Home Affairs--Nkosazana C. Dlamini-Zuma
Human Settlements--Tokyo M.E. Sexwale
International Relations and Cooperation--Maite Nkona-Mashabane
Justice and Constitutional Development--Jeff T. Radebe
Labor--Membathisi Mdladlana
Mining--Susan Shabangu
Police--Nathi Mthethwa
Public Enterprises--Barbara Hogan
Public Service and Administration--Richard Baloyi
Public Works--Geoff Q.M. Doidge
Rural Development and Land Reform--Gugile E. Nkwinti
Science and Technology--Naledi Pandor
Social Development--Edna Molewa
Sport and Recreation--Makhenkesi A. Stofile
State Security--Siyabonga Cwele
Minister in the Presidency, National Planning Commission--Trevor Manuel
Minister in the Presidency, Performance Monitoring and Evaluation--Collins Chabane
Tourism--Marthinus C.J. van Schalkwyk
Trade and Industry--Rob Davies
Transport--Sbusiso Joel Ndebele
Water and Environmental Affairs--Buyelwa Patience Sonjica
Women, Youth, Children and People with Disabilities--Noluthando Mayenda-Sibiya

The Republic of South Africa maintains an embassy in the United States at 3051 Massachusetts Avenue NW, Washington, DC 20008; tel. (202) 232-4400.

ECONOMY
South Africa has a two-tiered economy; one rivaling developed countries and the other with only the most basic infrastructure. It therefore is a productive and industrialized economy that exhibits many characteristics associated with developing countries, including a division of labor between formal and informal sectors, and uneven distribution of wealth and income. The formal sector, based on mining, manufacturing, services, and agriculture, is well developed.

The transition to a democratic, non-racial government, begun in the early 1990s, stimulated a debate on the direction of economic policies to achieve sustained economic growth while at the same time redressing the socioeconomic disparities created by apartheid. The Government of National Unity's initial blueprint to address this problem was the Reconstruction and Development Program (RDP). The RDP was designed to create programs to improve the standard of living for the majority of the population by providing housing--a planned 1 million new homes in 5 years--basic services, education, and health care. While a specific "ministry" for the RDP no longer exists, a number of government ministries and offices are charged with supporting RDP programs and goals.

The Government of South Africa demonstrated its commitment to open markets, privatization, and a favorable investment climate with its release of the crucial Growth, Employment and Redistribution (GEAR) strategy--the neoliberal economic strategy to cover 1996-2000. The strategy had mixed success. It brought greater financial discipline and macroeconomic stability but failed to deliver in key areas. Formal employment continued to decline, and despite the ongoing efforts of black empowerment and the development of a growing black middle class and social mobility, the country's wealth remains unequally distributed along racial lines. Approximately 50% of income and 80% of assets belonged to whites in 2007. South Africa's budgetary reforms such as the Medium-Term Expenditure Framework and the Public Finance Management Act--which aims at better reporting, auditing, and increased accountability--and the structural changes to its monetary policy framework, including inflation targeting, have created transparency and predictability and are widely acclaimed. Trade liberalization also has progressed substantially since the early 1990s. South Africa reduced its import-weighted average tariff rate from more than 20% in 1994 to 7% in 2008. These efforts, together with South Africa's implementation of its World Trade Organization (WTO) obligations and its constructive role in launching the Doha Development Round, show South Africa's acceptance of free market principles.

Financial Policy
South Africa has a sophisticated financial structure with a large and active stock exchange that ranks 19th in the world in terms of total market capitalization. The South African Reserve Bank (SARB) performs all central banking functions. The SARB is independent and operates in much the same way as Western central banks, influencing interest rates and controlling liquidity through its interest rates on funds provided to private sector banks. Quantitative credit controls and administrative control of deposit and lending rates have largely disappeared. South African banks adhere to the Bank of International Standards core standards.

The South African Government has taken steps to reduce remaining foreign exchange controls, which apply only to South African residents. Private citizens are now allowed a one-time investment of up to 2,000,000 rand (R) in offshore accounts. During 2007, the shareholding threshold (the percentage of shareholding that must be South African) for foreign direct investment outside Africa was lowered from 50% to 25% to enable South African companies to engage in strategic international partnerships. In addition, South African companies involved in international trade were permitted to operate a single Customer Foreign Currency (CFC) account for all international transactions. Permission was also granted to the Johannesburg Securities Exchange (JSE) to establish a rand currency futures market, in order to deepen South Africa’s financial markets and increase liquidity in the local foreign exchange market.

Trade and Investment
South Africa has rich mineral resources. It is the world's largest producer and exporter of platinum, the third-largest producer of gold, and a significant exporter of coal and iron ore. During 2000, platinum overtook gold as South Africa's largest foreign exchange earner. The value-added processing of minerals to produce ferroalloys, stainless steels, and similar products is a major industry. The country's diverse manufacturing industry is a world leader in several specialized sectors, including motor vehicles and parts, railway rolling stock, synthetic fuels, mining equipment and machinery, and military equipment.

Primary agriculture accounts for about 3% of the gross domestic product. Major crops include citrus and deciduous fruits, corn, wheat, dairy products, sugarcane, tobacco, wine, and wool. South Africa has many developed irrigation schemes and is a net exporter of food.

South Africa's transportation infrastructure is well-developed and supports both domestic and regional needs, but is beginning to face capacity constraints. Major bottlenecks occurred due to the lack of investment in infrastructure maintenance and expansion during the 1990s. At the time, the government was considering plans to privatize some of its state-run entities, and the lack of infrastructure investment is blamed on stalled privatization plans. State-controlled transport logistics group Transnet owns and operates all of the major ports and railway lines in South Africa. Transnet recently launched a 5-year R80 billion ($10 billion) infrastructure expansion program to increase port and rail capacity to meet growing demand. The global economic slowdown has provided Transnet with some breathing space as it implements these expansion plans. Transnet is expanding capacity at the existing Port of Cape Town and the Port of Durban, the busiest port in Africa. Transnet is also developing a new deep-sea port at Coega in the Eastern Cape Province, which will be able to accommodate new generation containerized cargo by volumes.

The Airports Company of South Africa (ACSA) is in the process of upgrading and expanding capacity at the existing international airports in Johannesburg and Cape Town in preparation for the 2010 FIFA World Cup. OR Tambo International Airport in Johannesburg serves as a major hub for flights to other southern African countries. A new international airport and freight and agricultural trade zone is also being developed in Durban for launch in 2010.

The domestic telecommunications infrastructure provides modern but expensive service to urban areas, including cellular and Internet services. The South African Government first began pursuing a policy of "managed liberalization" of the telecommunications industry in 1996. However, it was not until the Telecommunications Amendment Act of 2001 and the Electronic Communications Act (ECA) of 2005 were passed that major strides were made to end state-controlled Telkom's monopoly. In 1997, Telkom, the South African telecommunications parastatal, was partly privatized. In exchange for exclusivity to provide certain services for 5 years, Telkom assumed an obligation to facilitate network modernization and expansion into unserved areas. The government subsequently established a second network operator, Neotel, to compete with Telkom across its spectrum of services. Three cellular companies provide service to over 9 million subscribers. Analysts have cited the need to improve regulatory capacity-building at the industry regulator, the Independent Communications Authority of South Africa (ICASA), as the greatest challenge to improve competition in the sector. ICASA delays in decision-making regarding spectrum management/allocation and pricing determination (including interconnection and call termination fees) have resulted in a lack of competition and high telecommunications costs.

South Africa has made great progress in dismantling its old economic system, which was based on import substitution, high tariffs and subsidies, anticompetitive behavior, and extensive government intervention in the economy. Macroeconomic management was strong over the past 15 years, with reduced levels of public debt, generally low inflation, a progression from a fiscal deficit to a fiscal surplus, and a consistently positive rate of economic growth until the beginning of the global economic crisis. The government has sought to liberalize trade and enhance international competitiveness by lowering tariffs, abolishing most import controls, undertaking some privatization, and reforming the regulatory environment. It also sought to reduce the government's role in the economy and to promote private sector investment. It has significantly reduced export subsidies, loosened exchange controls, cut the secondary tax on corporate dividends, and improved enforcement of intellectual property laws. A competition law was passed and became effective on September 1, 1999. A U.S.-South Africa bilateral tax treaty went into effect on January 1, 1998, and a bilateral trade and investment framework agreement was signed in February 1999.

Annual GDP growth between 2004 and 2007 averaged 5.0%. In 2008, real GDP growth slowed to a rate of 3.1%. The government estimates that the economy will slow even further to 0.3% in 2009, but the World Bank has recently projected that the economy will contract by 1.5%. Exports amounted to 35.4% of GDP in 2008. South Africa's major trading partners include Germany, China, the United States, Japan, and United Kingdom. South Africa's trade with other sub-Saharan African countries, particularly those in the southern Africa region, has increased substantially. South Africa is a member of the Southern African Customs Union (SACU) and the Southern African Development Community (SADC). In August 1996, South Africa signed a regional trade protocol agreement with its SADC partners. The agreement was ratified in December 1999, and implementation began in September 2000. It provided duty-free treatment for 85% of trade in 2008 and aims for 100% by 2012. A U.S.-SACU Trade, Investment and Development Cooperative Agreement (TIDCA) was signed in July 2008. The four areas singled out for special attention under the TIDCA are customs cooperation, technical barriers to trade, sanitary/phytosanitary (SPS) issues, and trade and investment promotion.

South Africa is a member of the World Trade Organization (WTO). U.S. products qualify for South Africa's most-favored-nation tariff rates. South Africa also is an eligible country for the benefits under the African Growth and Opportunity Act (AGOA), and most of its products can enter the United States market duty-free and quota-free. South Africa has done away with most import permits except on used products and products regulated by international treaties. It also remains committed to the simplification and continued reduction of tariffs within the WTO framework and maintains active discussions with that body and its major trading partners.

South Africa and the United States signed an agreement to facilitate Overseas Private Investment Corporation (OPIC) programs in 1993. OPIC has since invested in a number of funds supporting sub-Saharan Africa development, including the Africa Growth Fund ($25 million), the Modern Africa Growth and Investment Fund ($105 million), and the ZM Investment Fund ($120 million). OPIC also established the $350 million Sub-Saharan Africa Infrastructure Fund (SAIF), which funds infrastructure projects in sub-Saharan Africa. OPIC helped the National Urban Reconstruction and Housing Agency (NURCHA) to establish a $31 million scheme to lend to small contractors for the construction of affordable houses. OPIC entered into an agreement with the Homeloan Guarantee Company (HLGC) to fund low-income home loans for HIV-positive South Africans in 2004. The pilot program for this project was initiated in 2005. Net proceeds from a $300 million investment pool will be used to purchase medication for HIV-positive South African homeowners holding HLGC-guaranteed mortgages. OPIC announced in June 2008 that it will provide up to $250 million to banks and financial institutions to expand their lending to small businesses. The Trade and Development Agency also has been actively involved in funding feasibility studies and identifying investment opportunities in South Africa for U.S. businesses.

HIV/AIDS
South Africa is one of the countries most affected by HIV, with an estimated 5.5 million HIV-infected individuals, including 2.7 million women and 300,000 children 14 years old or less. An estimated 18.8% of adults between 15 and 49 are HIV-infected, and women in the 25-29 age group, the most seriously affected, have prevalence rates of up to 40% in some areas. An estimated 530,000 new infections occur annually. In 2006, 350,000 adults and children died from AIDS; an estimated 1.8 million deaths have occurred since the start of the epidemic; and 71% of all deaths in the 15-41 age group are due to AIDS. In the last few years, there is an indication that prevalence may be starting to decline. Prevalence in antenatal care fell from 29% in 2005 to 28% in 2008. At least 1.6 million children, approximately 10% of South Africa’s youth, have had at least one parent die and 66% of these have been orphaned by AIDS. Approximately 50% of HIV patients in South Africa also have tuberculosis (TB), and this co-infection adds significantly to mortality. The South African National Strategic Plan for HIV & AIDS and Sexually Transmitted Infections 2007-2011 (NSP) provides a road map for responding to this crisis and sets out goals of reducing new HIV infections by 50% and increasing the number of people on anti-retroviral treatment (ART) care and support to 80% of all those who are diagnosed with HIV by 2011. The country has made impressive progress toward expanding access to ART, but the current number of people on ART is less than 40% of those who need it. The South African Government recently reaffirmed its commitment to reach these NSP goals.

Environment
South Africa's government is committed to managing the country's rich and varied natural resources in a responsible and sustainable manner. In addition, numerous South African non-governmental organizations have emerged as a potent force in the public policy debate on the environment. In international environmental organizations, South Africa is seen as a key leader among developing countries on issues such as climate change, conservation, and biodiversity. This leading role was underscored by South Africa's selection to host the World Summit on Sustainable Development in 2002.

FOREIGN RELATIONS
South African forces fought on the Allied side in World Wars I and II and participated in the postwar UN force in Korea. South Africa was a founding member of the League of Nations and in 1927 established a Department of External Affairs with diplomatic missions in the main west European countries and in the United States. At the founding of the League of Nations, South Africa was given the mandate to govern Southwest Africa, now Namibia, which had been a German colony before World War I. In 1990, Namibia attained independence, with the exception of the enclave of Walvis Bay, which was reintegrated into Namibia in March 1994. After South Africa held its first nonracial election in April 1994, most sanctions imposed by the international community in opposition to the system of apartheid were lifted. On June 1, 1994, South Africa rejoined the Commonwealth, and on June 23, 1994, the UN General Assembly accepted its credentials. South Africa served as the African Union's (AU) first president from July 2003 to July 2004.

Having emerged from the international isolation of the apartheid era, South Africa has become a leading international actor. Its principal foreign policy objective is to promote the economic, political, and cultural regeneration of Africa, through the New Partnership for African Development (NEPAD); to promote the peaceful resolution of conflict in Africa; and to use multilateral bodies to insure that developing countries' voices are heard on international issues. South Africa has played a key role in seeking an end to various conflicts and political crises on the African continent, including in Burundi, the Democratic Republic of the Congo, and Comoros. South Africa has pursued "quiet diplomacy" in its approach to the crisis in Zimbabwe.

U.S.-SOUTH AFRICAN RELATIONS
The United States has maintained an official presence in South Africa since 1799, when an American consulate was opened in Cape Town. The U.S. Embassy is located in Pretoria, and Consulates General are in Johannesburg, Durban, and Cape Town. Americans and South Africans also have many nongovernmental ties; for example, black and white American missionaries have a long history of activity in South Africa. Many South Africans (particularly the ANC leadership) also acknowledge support from and ties to the civil society anti-apartheid movement in the U.S. At the same time, left-wing critiques of the United States are common among Communist Party and labor union members of the ANC.

From the 1970s through the early 1990s, U.S.-South Africa relations were severely affected by South Africa's racial policies. However, since the abolition of apartheid and democratic elections of April 1994, the United States has enjoyed an excellent bilateral relationship with South Africa. Although there are differences of position between the two governments, mainly on political issues, these do not impede cooperation on a broad range of key issues. Bilateral cooperation in counter-terrorism, fighting HIV/AIDS, and military relations has been particularly positive. U.S.-South African economic and trade relations are strong. Through the U.S. Agency for International Development (USAID), the United States also provides assistance to South Africa to help it meet its development goals. Peace Corps volunteers began working in South Africa in 1997.

Principal U.S. Officials
Ambassador--vacant
Charge d'Affaires/Deputy Chief of Mission--Helen LaLime
Commercial Counselor--Craig Allen
Economic Counselor--Terri Robl
Political Counselor--Raymond L. Brown
Management Counselor--John Lavelle
Public Affairs Counselor--Mary Deane Conners
Defense and Army Attache--Colonel Kelly Langdorf
USAID Director--Carleene Dei
Agricultural Attache--Scott Sindelar
Health Attache--Mary Fanning
Country Consular Coordinator--Doron Bard
Consul General Cape Town--Alberta Mayberry
Consul General Durban--Jill Derderian
Consul General Johannesburg--Andrew Passen

The U.S. Embassy in South Africa is located at 877 Pretorius St, Pretoria; PO Box 9536, Pretoria 0001; tel: (27-12) 431-4000; fax: (27-12) 342-2299.



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