Economic Sanctions against South Africa

Abstract

In this paper, I shall dispute the widely held belief that all effective sanctions would greatly hurt poor South African blacks. Rather, it is likely that bans on exports of high technology to South Africa and imports of South African gold and diamonds would cause labor-intensive sectors to expand, thereby limiting the impact of a general recession on unskilled nonwhites. Still, several types of sanctions, such as those on oil, would have a severe impact on poor nonwhites. In addition, forced divestment would result in windfall capital gains for white South Africans; such gains would not be realized, however, if the ban were on new investments only. Finally, I shall discuss the need for infrastructural aid to help South Africa's neighbors weather the storm. Judicious aid to these countries is also important in inducing both Western and South Africanowned investments away from South Africa.