CONFERENCE REPORTS -- 'AFRICA IN THE MODERN WORLD'

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000500330011-0
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 37
• Document Creation Date: December 14, 2016
• Document Release Date: March 1, 1999
• Sequence Number: 11
• Publication Date: December 24, 1953
• Content Type: REPORT

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U.S. Officials Only
COMP IDENT IAL
CENTRAL INTELLIGENCE AGENCY
INFORMATION REPORT
COUNTRY Ethlopia/Libya/Sritrea/italian
Somaliland/Union of South Africa
SUBJECT Conference Reports -- "Africa in the Modern
World"
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DATE ACQUIRED
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DATE (oF INFO.) To 1953
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THIS IS UNEVALUATED INFORMATION
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SUPP. To
REPORT No.
iivailable on loan from CIA Library are the following papers presented
at a conference on "Africa in the Modern World" at the University of
Chicago, 25-29 Nov 53 under the auspicies of the Norman Wait Harris
Memorial Foundation in International Relations. These papers may be
published, together with other conference papers, in book form at
some unopecified future time.
1, 3152Z.4.,,u_itall231.-12.12_AnsLEILasatm Trends and Proarectd,
By Robert D. Rtrum. American University.
2. The Chanrinr Eczagala Structure of South Africa.
By Leonard H. Samuels, Uninrsity of Witwatersrand,
Johannesburg, South Africa./
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This report la for the use within he USA of the Intelligence components of the Departments or
Agencies indicated above. It is not to be transmitted overseas without the concurrence of the
originating offIce through the Assistant Director of the Office of Collection and Dissemination, CIA.
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'Ban than a century ago, the Union of South Africa was a remote,
isolated area at the tip of the African Continent. Trading connections with
the outside world were tenuous; the interior was difficult of access; and,
except for parts of the Cape, the wants of its scattered population were
restricted and largely satisfied by a primitive form of subsistence farming.
To-day, the economy is in most part highly organized, with a striking ca-
pacity for growth.
The Union's economic expansion has significant lessons for all under-
developed areas, though it has also been affected by the presence of people of
different cultures and skin colours. From the outset, the white society,
which took root at the Cane during the second half of the seventeenth century,
was profoundly influenced by its relations with the aboriginal peoples. First,
there were the Bushmen and nottentots, and their numbers were increased by
slaves imported to labour for the white colonists. As the whites expanded
the frontiers of their cettlement northwards, they also came into contact
with the African tribes advancing southwards. Contact between these white
and black immigrant communities inevitably resulted in a series of clashes,
in part, since both were essentially pastoralists with the same requirements
for grazing and water. Each clash between these two vigorous groups perpetu-
ated the colonists, dependence on the labour cf the conquered people, because
It left large numbers of black labourers at the beck and call of the farmers.
Bunning throughout South Africa's economic history is this conflict:
the growing dependence on the black man's labour however great the distaste
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for his person or the fear of his competition for land or for jobs. Despite
repeated attempts by the various Administrations to keep whites and non-whites
apart by military frontiers or, after the middle of the nineteenth century, by
-a policy of geographic separation through the creation of Reserves for blacks,
economic contact betveen the different groups intensified. Indeed, the process
by which the whites acquired the bulk of the land increased the inter-depend-
.snce between the conquerors and the dispossessed.
To-day, in the Union of South Africa, which covers an area of almost
473,000 square miles, there are about 13,000,000 people, comprising some
2,700,000 whites and 8,800,000 Africans, while there are over 1,100,000
Coloured people, descended from the Bushmen, Hottentots, slaves, Africans
and Whites. There are, in addition about 400,000 Indians, first brought to
South Africa in 1860 as indentured workers, who constitute the fourth element
in this complex multiracial society.
Though outnumbered nearly five to one, the whites constitute the
elite group in this deep south of the African Continent. Their higher eco-
nomic standards reflect, in part, differences in skill and productivity, but
are also due to their strong bargaining position and such factors as tradi-
tion and colour prejudice. The dominant position of the white group within
the political and social structure flows from their control of political and
militeay power, superior education and their Western heritage.
The story of South Africa has often been told in terms of this formid-
able structure to defend a ,White South Africa., Yet, perhaps, the most sig-
nificant aspect of the Unions economic development has been the gradual
break-down of all those barriers, which have impeded the growing inter-de-
pendencp of its inhabitants. Increased co-operation has resulted in higher
standards of life for all sections of the population, who have been drawn
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into the mouern economy. in ao rar as these higher utanuaras have depended
upon increased co-operation and inter-dependence, the different groups are
destined to become even more closely integrated, if the economy is to main-
tain its present rate of expansion.
One of the most potent forces making for these changes has been the
high economic and cultural aspirations of the small white settled population.
The whites have been able to oatiofy their desire for greater material welfare
through their skill, initiative and growing command over the means of produc-
tion. In the process, they have attracted the less developed African and
Coloured peoples into the ambit of an exchange economy, and have constructed
with their aid a modern state closely linked to, and dependent on, the world
economy.
The diamond and gold discoveries of the 'sixties, 'seventies and
'eighties of the last century wrought an economic revolution in a still large-
ly feudal society. They provided wealth on a spectacular scale, produced an
immediate expansion of the marl:,:t, quickened the tempo of commercial life,
drove up land values, and led to a rapid creation of capital gains. Mbreover,
the mineral discoveries led to a substantial influx of capital and immigrants
from abroad to the largely inaccessible interior. Here, indeed, was the sur-
plus wealth and the technical skills necessary to develop the country's re-
sources and span it with a net-work of communications.
It is not possible to review more than briefly the economic changes
initiated by the mineral discoveries, which were destined to destroy the large-
ly static, rural society. The sudden establiohemtn of new, large-scale activi-
ties threw a heavy strain on a farming system with its omall surplus production.
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The expanded demand for meat and other foodstuffs, together with the pressure
of rising land values, required a more settled agriculture or intensive stock
raising. Those farmers, driven on to poorer and smaller areas of land, ac-
quired mainly through the process of sub-divided inheritance, became increas-
ingly incapable of adjusting themselves to the economic development taking
place in the rest of the economy. They were bound to fail, eince the farming
techniques with which they were familiar were only euited to the primitive .
methods of exploitation of large land-owners, dependent on an abundant supply
of 'cheap' labour. Thus, there emerged a growing class of rural poor, who
tended to join the ranks of those landless whites, the "byovners." They were
called "Byowners," because they lived on the land of relatives or friends for
whom they worked in one capacity or another, but without any real economic
status. These landless whites became at last what they were called - 'poor
whites..
Each shock to the agricultural economy disturbed the loose hold of
some of these agriculturists on the land, and sent a fresh wave of them into
the towns. Agriculture in South Africa has had many shocks, apart from the
droughts, pests and other natural disabilities which afflict it. In this
century, perhaps, the most serious shocks have been the Anglo-Boer War between
1899-1902, and the collapse of agricultural prices after the boom following
WOrld Nhr I and dering the Great Depression. Despite the general growth of
agriculture, therefore, farming as a whole hen become progressively lees able
to support either a working or dependent population, which was not making an
economic contribution to its costs. To-day, less than one-fifth of the white
working population is engaged in agriculture. About one-half of the Union's
Aorking force in officially estimated an employed In farming, while Ito 'share'
ln the national income amounts to leos than one-seventh of the total.
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The declining immortance of agriculture as a source of livelihood was
doubly important, because of the very Large part it had always played in South
.A.friean etoonomic and political life. Thus, it was not strange that the exodus
of population from the countryside and the growth of a poor white class should
have dominated economic policy, at any rate, until the 'thirties., This prob-
lem of rural de-population and white improverishment was not, of course, pecu,
liar to South Africa, though it had a number of singular features.
In a homogeneous society, individuals tend to rise or fall according
to their capacity, and find occupations suited to it. In a society stratified
along colour lines, however, this vertical diffusion between classes is inter-
rupted. The members of the domillant group, who would ordinarily occupy the
lowest stratum of society, are inhibited by the national sentiment from under-
taking menial tasks, quite amart from the difficulty of competing for such
jobs at the low wages acceptable to their coloured competitors. There were,
moreover, limited outlets for such white workers in the more remunerative oc-
cupations.
From the outset, mining and ancillary activities have been organized
on the basis of a small, highly-paid white labour force and a large supply of
African labour performing manual work at much lower rates of pay. This pat-
tern of wages and employment arose because of the original scarcity of the
artisan, trading and professional classes, and has been perpetuated by legal
and social conventions in the interests of the white group. Thus, it was not
easy to fit the unskilled white workers into this peculiar economic organiza-
tion, because of his lack of training and habits of industry. Many became
destitute, and created a special and embarrasing problem of poverty that would
not have existed in a country with a homogeneous population.
To-day, unemployment is insignificant among the white community, largely
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buQtann., yr the remarkable expansion of the field of employment, particularly
in the manufacturing and service industries Between 1918/19 and 1938/39,
the net output of manufacturing expanded by more than three-fold, and has more
than trebled again since the outbreak of World War II. Since the and of World
Whr I, the number of white workers In factory production has increased more
than six-fold.
The growth of the manufacturing industry is the product of deep-seated
changes in the Union's economy. As real incomes have grown, an increasing pro-
portion of disposable incomes has been diverted from food and other necessities
to the purchase of services and manufactured products. These changes in con-
sumption patterns created the conditione for an expansion of the industrial
structure. There can be little doubt, however, that this process of indus-
trialization was also greatly accelerated by the Authorities' growing pre-oc-
cupation with measures to mitigate the serious problem of urban white unemploy-
ment. These measures took the form of a 'civilised labour' policy, which de-
liberately encouraged the use of white rather than non-white unskilled labour
in certain occupations, and aimed at enlarging the field of white employment
in the growing manufacturing industries.
Since the 'twenties, the scale of manufacguring activity has been ex-
panded by a policy of tariff protection, the establishment the Government
of undertakings such as power, iron and steel production and engineering works,
and by close connections with important firms in the United Kingdom and else-
where. In recent years, the Government has actively encouraged a variety of
projects, either through the State-controlled Industrial Development Corpora-
tion, or through the establishment of State enterprises such as Sasol (South
African Coal, Oil ad Can Corporation).
The important role played by the State in encouraging manufacturing
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is indisputable. Nevertheless, the spectacular gluwth in manufacturing during
the past decade in particular could herdly have taken place without the impetus
provided by the war and post-war conditions. The dislocation and destruction
at the end of the war, and the excessive demands, which have existed since the
early 'forties in relation to the existing flow of goods and services, have
made practically any production profitable. In this situation, the existing
price and marketing controls affecting agricultural products, as well as the
operation of import restrictions, have increased the profitability of manu-
facturing as compared with activities such as farming and mining.
To-day, manufacturing activities employ almost twice the number of
workers engaged in gold-miming, while they account for some 24 per cent, of
the country's national income compared with about 7 per cent before the war
of 1914-18. During the same period, the 'contribution' of gold and other
mining activities to the national income has declined from 28 per cent to
about 13 per cent at the present time. The conclusion drawn by some is that
gold-mining is now of much lees impo,etance compared with its role during
previous periods of the Union's economic history. These changes in the South
African economy, however, require careful interpretation.
Tho 'net product' of a given industry, or the size of its labour force,
is not a true index of its role in generating income, nor is it an index of
the relative importance of any industry to the economy. The extent to which
a single industry, say mining, acts as a prime generator of income cannot be
assessed on its net product Aln-4 Thus, the mining industry's activity in-
fluences the size of the figures of the ether component classes of the nation-
al inceme, such as "Agriculture," "Wholesale and Retail Trade," "Transport"
and "Manufacturing." The net products of the Engineering, Metals and Power
industries, for example, are largely dependent on the demands of the gold
mining industry.
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?------2.
The inter-dependence of incomo-creating 1,1dustries should thus not be
overlooke, while it is important to recognize the still great dependence of
manufacturing industry on gold mining both as a customer and as a source of
foreign exchange. Though the contribution of manufacturing to the Union's ex-
port trade has expanded substantially, its ability to finance its requirements
of imported raw mai:erials and other supplies out of its own exchange earnings
is still limited. The value of manufactured exports, including semi-processed
gold, only amounts to about 18 per cent of the Union's total exports. Thus,
manufacturing has still to reach the stage, where it can rely on its own ex-
change earnings to finance its activities and their expansion.
There is reason to believe that the very rapid growth in manufactur-
ing since the outbreak of the war has been, in part, at the expense of the
Union's export production, with a consequent slowing-down in the rate of its
economic growth. A complementary expansion in manufacturing activity as ex-
port incomes increase is an inevitable development. It is however, a differ-
ent matter when attempts are made to force the pace of industrialization as
a means of relieving unemployment and poverty.
This Is a lesson, which is sometimes overlooked, when industrializa-
tion is suggested as a policy to improve standards of living in the under-
developed regions of the world. An attempt to expand incomes by diverting
labour and other resources from the export industries to activities producing
for the home market can have the quite contrary result. Economic development
in the Union demonstrates the importance of maintaining exports, either in
the form of additional manufactured products or in the form of raw materials.
A reduction in the scale of activities in which a country enjoys a comparative
advantage will result in a fall of real income, unless this loss of income can
be made good by using otherwise unemployed resources.
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t_rAuw n or i rt 1?ATItkriAt,
It is an extraordinarily difficult matter to express statistically
the immense expansion, which has taken place in the Union's economy since the
mineral discoveries. National income statistics, which are only available
since 1911, have a number of defects, and are of limited utility when they re-
late to long periods of time. Nevertheless, they provide some indications of
the trend and magnitude of economic activity.
The market value of all goods and services increased annually by about
8.5 per cent during the period 1911-12 to 1919-20, while the average rate of
growth amounted to 4.4 per cent per annum in the 'twenties and 8.7 per cent in
the 'thirties. Since the outbreak of the war in 19390 the net national income
produced expanded at an annual rate of almost 11 per cent. These figures make
no allowance for the rise in prices, or for the growth in population. Allow-
ance for these factors reveals that the rate of expansion in the 'thirties
was dore than double the corresponding rate of increase in the 'twenties,
while the rate of growth in the 'twenties, in turn, appeared to be almost
double the rate attained during the period 1911-12 to 1918-19.1 This is an
astonishing achievement, though this rate of growth has not been maintained,
despite the immense expansion during the past decade.
In spite of this rapid economic advance during the past 40 years,
average incomes of the hulk of the population are still extremely low. A
1The estimates are those of Professor S. II. Frankel. The 'twenties
relate to the period 1922-23 to 1928-29; the 'thirties refer to the period
1932-33 to 1938-39. Though not strictly comparable, each of the periods
chosen commence a year after a depression or recession reached its lowest
point and each period ends with the peak year of the subsequent boom. See
"An Analysis of the Growth of the National Income of the Union in the Period
of Prosperity before the War" by 3. II. Frankel, assisted by H. Herzfeld,
P ? Oft A
, June, 19144.
.0 ? . 00; ?
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rough computation suggests that average real incomes per person in the Union
are about one-third or leas of real incomes per head in Australia, the United
Kingdom and Canada, and about one-fifth of real incomes in the United States.
Such international comparisons have, of course, only a limited validity, but
they reveal that the Union of South Africa is still a poor country, when
Judged by the standards of her total population.
Current statistics of income, however, tend to obscure the real signi-
ficance of those changes, which have swept the bulk of the population into the
modern economy. There has been a persistent and significant improvement in
average incomes per head since the turn of the century. In the case of the
white population, the improvement, the improvement has been remarkable.
lowing roughly for the share of non-white incomes and for various measures of
prosperity, such as passenger motor cars and university students in relation
to the white population, the money and real incomes of the whites are, after
the United States and Canada, amongst the highest in the world.
Incomes of the non-white inhabitants are very much lower than the in-
comes of the white population. Yet the significant comparison is, perhaps
between the relatively high living standarcle of the African workers drawn
A
into the orbit of the exchange economy, and the low standards of those still
lodged in their primitive subsistence eonomy. Incomes, both in cash and
kind, derived from the tribal economy are extremely low. According to a
fairly recent investigation, incomes from agriculture and other activities
appear to have averaged about 070 a year per family of six in the Keiskamr
mahoek district in the Ciskei Reserve. Earlier investigations placed the
average Reserve money income at about 040 a year for a fmily of five in the
Ciskei.2 In the Keiskannahoel- Prea family incomes in cash and kind, including
2See Report of the Witwatersrand Mine Natives, Wages Commission, U.G.
No. 21, 1944, page 12.
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remittances from those working outside the district in urban areas and else-
where, averaged approximately g140 a year.3 In contrast, average earnings
of non-white workers in manufacturing activities are about two-and-one-half
times an high at the present time,
UREALIZeTON
Rural poverty and the grwring disparity between incomes received from
urban and farming activities have been chiefly responsible for the steady de-
population of the countryside. A half a century ago the exodus of the white
rural population was a trickle. Since the 'twenties, it has gained in momen-
tum as a result of the immense expansion in mining, industrial and other
activities. /Airing the past 40 years, the percentage of whites in rural areas
has declined from 52 per cent, to about 25 per cent, of the total white popu-
lation. This migration of the white inhabitants has been paralleled by the
movement of the African, Coloured and Indian peoples into the urban areas,
though this process only became oignificant at the end of World War I. In
1921 one-eighth of the African population lived in the cities and towns; the
percentage is now one-quarter.4 Today, the total population in the urban
areas is about 60 per cent, greater than before the war.
3See D. Hobart Houghton and D. Philcoo "Family Income and Expenditure
in a Ciokoi Native Reserve," 1,outh Afrtoan Journal of reonomies, December,
1950, page 423.
4The figures relating to the African population in the urban areas
are not a true indication of the extent of permanent urbanization. Many of
the Africans enumerated in to towns are not permanent residents, but are
migrants, who leave their families behind in the Reserves in order to sup-
plement their income by working on the mines or in other urban activities.
Pressure on the land in the congested Native Reserves as well as the Africans'
expanding range of wants are leading to a more settled urban African popula-
tion. This is borne out by the decrease in masculinity rates, which are now
185 males per 100 female in all urban areas. According to several sample
surveys, some 4o per cent of the African population in the towns appears to
be permanently urbanized.
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At the present time, the white inhabitants account for about 40 per
cent of the population in the cities and towns, the Africans for about 41
per cent, the Coloureds for 13 per cent and the Asiatics (Indiana) for some
6 per cent. Thus, the towns are now, in reality, mixed areas with the dif-
ferent elements of the population closely interwoven in economic life. In
manufacturing activities, which are mostly located in the urban areas, Afri-
can and
force.
played.
other Coloured workers account for about two-thirds of the labour
/n mining, Africans constitute about 89 per cent of the workers em
-
This dependence of urban activities on non-white labour is also a
characteristic feature of the rural economy. The rural African population
outside the Native 'Reserves is about four times as great as the whites in the
rural areas, and provides over 90 per cent of the workers in farming.
About two-fifths of the African population still live in the Native
Reserves, and constitute the only compact bloc of one racial group in the
Union. The separation of this group from the rest of the South African
economy,
however, is more apparent than real, since the Reserves are closely
integrated with the labour market. At any time, as many as one-third to one
half of the ablebodied population may be at work outside the Reserves. Compe-
tent investigators') have repeatedly streesod the disastrous consequences of
this continuous exodus of adult males from the Reserves on tribal economies
and family life. This migrant labour system is a product of ccmplex factors.
It reflects, in part, the insecure position of the African in cities and towns,
the lack
f accommodation for his family, as well an the limited opportunities
for his ( Itural and social advancement. For many Africans a plot of ground
in the Reserves is a safeguard against loss of employment and, therefore,
their right to remain in the urban arena.
page 17.
lleport of the Native Laws Commission, 1946-48. U.G. No. 28, 1948,
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FPflo J5
Large-scale migration and urbanization always give rise to difficult
social and economic problems. There is the Aced to provide housing, food and
the other requirements of a rapidly expanding urban population as well as the
creation of conditions to ease the transition to urban life, In South Africa
these problems have been aggravated by colour and cultural differences, and
by the reluctance of the Central Government and Local Authorities to accept
the social processes taking place. Thus, the African men and women, who have
been detached from their old pattern of social relationships, have largely
been left to their own devices to make those complicated adjustments in an
unfamiliar urban society in which their opportunities to become productive
members are restricted. In these circumstances, their requirements for ade-
quate housing and other needs remain unsatisfied, and, indeed, appear to be
beyond the existing capacity of the economy. Their solution requires an Jur-
mense expansion in national production throu8h more effective use of the Un-
ionTs working population, as well as greatly increased contributions by the
non-white peoples to their economic and social betterment.
(2?VnLF.7 To 7VANflToN.
The growing incorporation of all sections of the population in the
economy has been accompanied by a steady improvement in their economic posi-
tion. On the basin of those trends, it is tempting to forecast that average
Incomes per head will expand continuously, - except for temporary sot-backs -
owing to improvements in techniques an the developing Industrial society ac-
quires more knowledge and enjoys the economies of more effective methods of
co-operation. Yet, there is nothing automatic about the growth of a country's
national income. It depends on the natural resources available, the literacy
skill and well-being of the population, the effectiveness with which the so
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ciety uses its factor endowment, and its ability to adapt itself to the chang-
ing circumstances which improved cooperation implies.
In the Union, the expansionary process is taking place within a frame-
work of custom and legislation, which seeks to confine the use made of African
and other Coloured labour. Since the early years of this century, the organi-
zation of labour on the gold mines han been dominated by a legal colour bar,6
while restrictions also operate in such 'sheltered, trades as printing and
building, and in the engineering and other industries. The industrial colour
bar operates largely through trade union pressures, and it has prevented nov-
whites, particularly Africans, from being apprenticed and gaining access to
the skilled trades.
The opposition of skilled artisans to the entry of competitors into
their occupations. Is not confined to south Africa. In the Union, however, the
fear of lowered standards because of the competition of cheap labour is inten-
sified by colour distinctions. The result of this stratification cf the labour
force along colour lines has been to create an economic society composed of
non-competing groups. In this society of privilege and caste, the great bulk
of African workers is largely confined to unskilled tasku, with limited op-
portunities to promote themselves along the rungs of the economic ladder. As
a result, wide disparities exist between the incomes of the different colour
uoups. In mining, where the pattern took root because of the original scar-
city of technical and other skills, this disparity is most marked. Non-white
6In terms of the Mince and works Act, the Government is authorized to
make regulations to provide for the issue of Certificates of Competence in
mining, or works where electrical rower is used, and to limit the issue of
certificates to white or Coloured persons. The only other legal colour bar
operates through the Native Building Workerot Act, which wan enacted in 1951.
This legislation makes provision for he training and employment of Africans
in the building of houses for Africans, and for the proclamation of areas in
which Africans may rot be employed in the erection and maintenance of build-
ings for the use of norr*Africans.
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workern, who out-number the white workers by about eight to one, receive about
half the income of the white miners.
This peculair economic organization must not be regarded as entirely
rigid. The npeeding-up of industrialization and the scarcity of workers dur-
ing the war and postwar years have made considerable breaches in the system,
Indeed: the very growth of manufacturing activities has tended to dissolve
the complex of the colour bar by opening up an expanding range of work for
semi-skilled operatives. To-day, work, which is classed as 'semi-skilled,'
appears to be distributed in more or lean equal proportions between whites,
Africans and other Coloured workers, According to investigations of the
Wage Board, 35 per cent of semiskilled workers are Africans, 33 per cent
whites, and Asiatics and Coloureds combined represent 32 per cent,7 On the
other hand, about 84 per cent of the skilled workers in the same trades and
industries were whites.
The penetration of non-white workers into the MOTO skilled occupations
has beenigreatly affected by historical circumstances. In older trades, gov-
,
erned bycraft traditions, and on the mince, trade union pressure reinforced
by law has retarded the advance of' non-white workers. Despite these barriers,
there has. been a oubetantial modification of the raceal composition of the la-
bour force. In the metal and eneineering induotriea, employing over one-quar-
ter of these engaged in private manufacturing induotry, more than 20 per cent
of the labour force consists of seri-skilled, non-white operatives. In the
newer induetries, such as clothing, furniture, leather and light steel manu-
facturing; the emuloyment of African and Colouree workers ha e proceeded apace
7These statistics are based on investigations between 1937-1950 of
sections Of the manufacturing industry, although other important groups such
as the distributive, catering trades and motor industry were also included.
See Report of the Industrial Legielation Commission, U.G. 62 - 1951, pages
22-28.
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in an increasing range of occupations. In the clothing industry, for example,
the percentage of white workers (mainly females) has declined from 61 per
cent to 29 per cent of the total labour force during the past 15 years.
Given the continued growth of manufacturing activities, it is inevitable
that non-white workers will increasingly undertake not only the send-skilled
work, but also a growing proportion of the skilled tasks. The future rate
of growth of the different sections of the population, as well as the growing
tendency for white workers to myve into the distributive and commercial trades
is likely to hasten these developments.
The movement of Asiatics, Coloureds, and, to an increasing extent,
African workers to the more skilled occupations is bringing about significant
reductions in the disparity between the wages of workers exercising different
classes of skill. The wage of the unskilled labourer (mainly non-white) on
the Railways, for example, now constitutes about 18 per cent of the wage
paid to the skilled worker compared with about 7 per cent before the war. In
the clothing industry, where the gap between skilled and unskilled wage
rates has always been smaller, the percentage has grown from 33 to 39 per
cent during the same period. Indeed, there is reason to believe that during
the past decade the gap between the real earnings of white and non-white work-
ers has narrowed even more than the gap between their cash wages. In general,
remuneration in kind constitutes a greater proportion of the cotal earnings
of non-whites than of whites; and this factor weighs heavily in favour of
non-white workers during periods of rapidly rising prices.
There can ba little doubt of the constructive and liberalizing in-
fluence of the expanding manufacturing and service industries on South Africa,s
economic life. Yet, the capacity of these industries for generating change
within the existing institutional framework is limited. Throughout the war
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Jr* 17
um) post-war years, the dependence of the growing manufacturing industry on
the exchange earnings of the export industries has been masked, in particular,
by the immense inflow of funds from abroad, while the war and post-war infla-
tion have provided exceptional opportunities of expansion.
These conditions are now changing. In the process, they are bringing
into sharp focus the basic contradictions between economic expansion and the
survival of those legal and conventional restrictions, which prevent the full
utilization of the efforts of the working force. Despite the great economic
advance which has teken place, the national output relative to the total pop-
ulation remains distressingly low. The low volume of production, in turn,
restricts the growth of the market and prevents changes in the industrial
structure from propagating themselves in a cumulative fashion. Thus, the
Union is denying itself the full benefits of those forces of growth, which
are the real dynamic factors in an advancing economy. It is significant
that the manufacturing industry after more than a quarter of a century of
protection ia still unable to compete effectively in world markets.
There have, undoubtedly, been substantial modifications of the peculiar
labour structure, which restrains the growth of manufacturing and prevents
progress taking place in a co-ordinated fashion throughout the economy. Never
-
the less, far too many barriers still circumscribe the productive powers of
the bulk of the workers, and stunt ambition. Thus, their opportunities of
acquiring and exercising skill remain limited, and, consequently impede the
development of those faculties, habits of industry, and discipline required
In an urban society. In addition, a complex structure of controls restricts
the freedom of movement of African workers into the urban arean and their
right to acquire property in these areas. Underlying this policy is the as-
sumption that the African is a temporary dweller in the towns, and that his
peimanent home iJ in the Native Reserves.
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As a result of restricted social and economic opportunities, the
African worker, has little incentive to improve his efficiency or to remain
in a Thus, productivity remains low and labour turnover high.8 High
labonr turr:Dvor combined with the inefficient system of migrant labour, on
which the ;%Ines, the Natal sugar plantations, as well as certain farming
areas are still based, prevents the development of shills and specialized
abilities. The existence of a large, undifferentiated mass of unskilled and
illiterate workers leads them to be substituted for less efficient methods,
and this severly restricts the scope for mechanization. Thus, is perpetuated
a vicious circle of low efficiency, low earning and high labour turnover.
An economy condemned to operate in this manner below optimum capacity
cannot .easily maintain an uninterrupted rate of economic growth. Indeed,
there are unmistakable signs of a slowing-down in the pace of economic ex-
pansion, despite the immense constructional, mining, manufacturing and trans-
portation activities during the post-war years. During the period 1947-51,
the average annual increase in 'real, income (that is, at 1958 prices) per
head of population amounted to about 5 per cent, which represents an extremely
rapid rate of growth. Nevertheless, the annual rate of growth of the economy
during this period was less than the rate of expansion achieved during the
'thirties.
Conclusions drawn from simple comparisions of rates of growth during
periods, which are not strictly comparable, require careful interpretation.
During the period 1933-39, the Union's economy expanded at a phenomenal rate,
largely owing to the rine in the price of gold in terms of Sterling and Doi
-
8A detailed analysis of the employment histories of 251 firms showed
that one half of the jobs taken by Africans lasted less than 6 months, three-
quarter leso than 1 year and 90 per cent less than 2 years. :Ilee Native Urban
Employment, 1956-44, Department of Commerce, Witwatersrand University.
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Pre 10
lam, with a consequent improvement in the real value of South Africa's ex-
1
1
ports (including gold) in terms of imports. On the other hand, a complex
set of factors helped to restrain the expansion in outPut during the period
1947-51. there can be no doubt, for example, that the linsign1ficant increase
or even decline during this period in the output of gold, wool and hides and
skins, whiCh still account for about half the Union's export income, has been
a vital factor in the declining rate of economic growthin the Union. This
decline in 'export production reflects the diversion of labour and other rem
sources to 'those activities, notably manufacturing, which have benefitted
most from ,ie inflationary growth of money incomes and Prices. At the same
time, the real value of South African exports in terms of imports has shown
a steady tendency to decline, largely because of the dirdnishJng quantity of
goods obtained for each ounce of gold.9
Whatever the precise explanation, the signs of strain in the Union's
economy are evident in significant aspects of its economic life. Though the
value of farming production is now more than three times as great as in 1938-
1
39, the output of agricultural and pastoral products is little more than one-
third higherthan before the war. The failure of farming output to respond
to rising inComes and prices has produced a precarious balance between exist-
1
Ing supplies And inflated money demands. As a result, there have been repeat-
ed shortages of wheat, dairy produce and other products during the post-war
uears. The incapacity of key industries, again, such as transportation, power
1
and coal to cape with a.xowing demands has undermined the efficient operation
of the economy. In mining, the strain is apparent in the steady rise in gold
9Th 1949 a unit of exports (including gold) bought only 85 per cent
of the imports it bought pre-war. To some extent this position was adjusted
by the devaluation of currencies in September 1949, and bythe sharp rise in
commodity prices until the early part of /951. Sec "The Sterling Area" pre-
pared by Economic Co-operation Administration (Special Minion to the United
Kingdom), pp. 247 .rt. ripn,
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mining costs, which is fundamentally due to the fairly rigid racial composi-
tion of its working force. This has weakened its ability to retain its com-
plement of workers in competition with the manufacturing and tertiary activi-
ties. Today, the mining industry has to draw more than 60 per cent of its
workers from outside the Union's borders.
The inability of the Union's major branches of activity to expand out-
put sufficiently has severely strained the economy's capacity to provide hous-
ing, food, education and other amenities of a rapidly growing urban population.
Its flagging ability to undertake these economic tasks is evident in the rapid
growth of money incomes and prices unaccompanied by a commensurate expansion
In output. Since the outbreak of war, aggregate money incomes have expanded
rapidly, but the real value of production has only grown at about half the
rate. The result has been unsatiefied lemands, economic waste of resources,
and social distress, which has been accentuated by the prevailing distribution
of incomes.
wvita or Turyi7r7.7?
In leas than three-quarters of a century, the white inhabitants of
the Union have fashioned with the co-operant efforts of the African and Col-
oured peoples the most modern economy in Africa south of the Sahara. In the
process, average incomes of the white group have risen to levels found in ad-
vanced economies, while the living standards of the non-white groups drawn
into the orbit of the modern exchange economy are much above the standards of
those still engaged in subsistence production. The drive behind these lnr
sense economic advances has come from the economically and culturally more
highly developed white inhabitants of the country.
The problem of the future is to hasten the pace of development, and
bring about an all-round improvement in living standards, while reducing gross
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disparities in wealth and income. Without a substantial increase in the vol-
ume of production, it will by difficult to raise significantly the consumption
standards of the mass of the population. This will require an economy in
which full opportunities exist for developing the skills and capacities of
its members. Failure to develop new social and economic structures to replace
the disintegrating tribal societies will leave the indigeneoum people uproot-
ed, and incapable of integrating themselves into meaningful social and eco-
nomic relations in the new industrial society. The social and political dang-
ers of precipitating men and women into unfamiliar economic societies in which
they are not fully received have become increasingly obvious. This is not a
task which can be accomplished by the wave of a magic wand. It requires patient
experimentation with new forms of economic and social organization, and the
creation of devices for omoothing the transition of those ill-adapted to cope
with economic change.
Throughout the Union's modern history, the need to make those funda-
mental changes required by an expanding economy has been obscured by a series
of economic windfalls in the past. To-day, there is again the danger that the
Immense increase in incomes in prospect from the new gold-mining developmentn
in the Orange Free State, the Far West Rand and the Klerksdorp areas, as well
an the exploitation of the Union's uranium resources, will once more reduce
the urgency of those adjustments. Yet, these very developments are demonstrat-
ing in a vivid fashion the economy's increasing inability to cope with ito
growing economic tasks. Indeed, the present acute shortage of labour in gold
mining at current wage rates is not merely curtailing the lives of many of the
existing gold producers, but s]owing-down the ratn of development in the new
gold-fields. Thus, the beneficial flow of additional gold and uranium exports,
on which such great store in being placed to buoy up the economy in the immedi-
ate future, is likely to be delayed.
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The white community is evieently facing a choice of alternative poli-
cies: the progressive relaxation of restrictions inhibiting the growth of
labour productivity or the perpetuation of existing legal and institutional
barriers to development, with their depressing effects on consumption stand-
ards as well as the relationship between the different racial grouno. It will
not be an easy decision for the whites to forego their monopolistic position
in the South African society, and expose themselves to the continuous effort
and the incessant vigilance necessary in the interests of efficiency and social
justice.
The white inhabitants are in this respect not very different from peo-
ple everywhere, who attempt to maintain their income standards through re-
strictive practices. They are besides filled with apprehensions and doubts,
which area product partly of their frontier history and partly of their human
fraility. However ill-founded, their fears are facts of deep psychological
and historical importance. The white man is unealy as he observes the Africans'
educational progress, their rine in economic and social standards, their at-
tempt to strengthen their bargaining position, and the growth of African na-
tionalism. He fears the growth of Native political rights, and the possibili-
ty that some day numbers will predominate in the Government of South Africa.
Chiefly, he fears that present development will ultimately lead to social
mixtures, to race mixture, to the destruction of ,white South Africa.'
Fear has a cramping influence cm men's minds. Yet, economic experi-
ence is a hard task ranter, and its lessons cannot be easily ignored. Con-
tinued resistance to full co-operation with the African end Coloured people
will inevitably lower the Western standards of life hloved in the Union:
the African population, after all, constitutes a most important part of the
resources on the utilization of which depends the economic prosperity of the
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whole society. If, th2ough the application of restrictions, economic growth
is brought to a halt, non-white competition will almoot certainly grow progres-
sively keener, and restrictions will become at the same time more necessary
and more difficult to impose.
A surer basis for dealing with the Union's complex social and economic
problems is through a policy of expansion. If economic development can be
pushed on more rapidly, the demand for white, African and Coloured labour will
increase, and the field of competition will be narrowed. It is, in any case,
in an advancing and expanding phase of industrial activity that those quali-
ties which distinguish the white inhabitants will be in greatest demand. Thus
a policy of justice and wisdom can be made to coincide with economic interest.
L. E. Samuels
Department of Economics and Economic Eistory,
University of the Witwatersrand,
Johannesburg
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737. Fnlwr-R TTAL7:,T7 c:" rc'; PT-T) 7 rYTTA; T'7177 ATT
7tbert D. -Relm
Amcrican Univer3ity
Washington, D. C.
Probably nothing since the Italian occupation ban affected the course
of politica]. events in the former Italian Colonies and Ethiopia no profoundly
an the decisions of the LriT General Assembly in 1949 and 1950 with rcapect to
the disposition of Libya, rritrea, and Somaliland. An a moult, Libya achieved
independence in 1951; 'Eritrea, in 1952, became an autoromous unit federated
with Ethiopia under the sovereignty of the Ethiopian Crown; and Somaliland
will become independcnt in 1960.
The General Assembly assumed this respcnsibility in accordance with
the Italian Peace Treaty of 1947 after the Council of Foreign Ministers (France,
the UK, the ,J0, and the U0SP) bad failed to agree on this question within a
year after the peace Trcaty cnmc into effect. The task of finding a formula
acceptable to a two-thirds majority of the Assmbly proved exccedinly dif-
ficult and was accomplished only by corTromincs some of which, however in-
evitable, may not in the long run prove to be the most suitable for the parti-
cular area affected.
The rclo of the United Nations has not been limited simply to reaching
these broader decisions but hes aloe included Gllid=c() during the transitional
periods and a continuing interest through technical assistance in the social
and economic advancement cf these territorios. 171 Commissioners in Libya
and in Fritrea aided the inhabitants in drafting their constitutions and in
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preparing themselves in other respects for independence or L,elf-government;
and a NN Advisory Council is assisting the Italian administering authorities
In Somaliland throughout the period of the trusteeship. A UN Tribunal in
Libya and Eritrea is authorized to decide questions relating to Italian
property. The Specialized Agencies of the United Nations (e.g., WHO, FAO, and
UNFSCO) have rendered valuable services to Libya and Somaliland through the
UN's Expanded Program of Technical Assistance. Libya i3 now receiving more
aid per capita from the UN than any other country.
All these territories face the common challenge, so familiar elne-
where in Africa, of developing backward economies, raising low standards of
living, and providing increased facilities for education, and health. In
addition, all are seeking to prepare their inhabitants for more effective par-
ticip;Ition in government and to strengthen their sense of national solidarity.
It is to these problems that we shall now turn as we examine separately the
trends and prospects in Libya, Somaliland, and Ethiopia-Eritrea.
LFRYA
The establishment of the United Kingdom of Libya on December 24, 1951,
marked the end of centurica of foreign occupation and control and the birth
of a constitutional monarchy federal in nature and faced with innumerable
problems of policy and administration. Four cf these problems in particular
pone serious and basic que3tion:7 for the West because of Libya's strategic
position in Northeastern Afeica. Firot, hew can a state with obviously limit-
ed economic resources and tecl,nical skills develop a viable economy? Second,
how can a strong sense of national unity be generated to overcome separatist
tendencies latent in the hietory and diverse characteristics of the three
component provincee--Tripolitanin, Cyrenalca, and Fezzan? Third, hew can a
Western-type constitution and a modern governmental bureaucracy best be adapted
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3
to the politica] dynamics and social and economic inetitutions of this Arab
otate? Fourth, how can a foreign policy be formulated which will permit
Libya to remain on good terms simultaneously with the Great Powers of the
West and with its sister Arab states, some of whom see "imperialist" motives
in Western policies toward Libya?
C
;
+r.a Libya is a poor country, almost
totally lacking in valuable Islovamlineral resources or fuel; its precarious
? agricultural and pastoral economy in subject to inadequate rainfall, often
resulting in drought, and to damage of crone from searing desert winds,
flash floods, and Pests, Coastal fishing and simple manufacturing supplement
the fluctuating returns from agriculture. Nevertheless, based on a UN esti-
mate, economic benefits equal to mere than half of Libya's national income are
derived from foreign expenditures relating to military facilities and the
contributions of forting governments to meet budget deficits and further ecc-
nomdc development.
Without this external assistance, it is clear that Libya today could
maintain neither its present standards of living (however low); nor the aver-
age annual. cash income of its people (estimated at only about *35 per capita);
not Ito present level of imports (most of which consist of essential consumer
goods such as food and clothing and only half of which it can pay for through
extorts); nor its present low level of government services. The country in-
curs a budget deficit of 35 pr cent, which is balanced only through the di-
rect contributions of France and particularly of the
Many years of concentrated effort to overcome its economic and tech-
nical deficiencies lie ahead if Libya is gradually to dispense with the foreign
props which now support its economy. A long-term program for improvements in
such fields as education, agriculture, health, and development of natural re
-
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sources is supported by technical assistance from the 113 (amounting to $2.8
million in tho past two years) and the UN (about 1.2.5 million for the same
period). In addition, with the financial help of the UK, Prance, and Ita.ly.
Libya has established a. Development and Otabilization Agency to execute public
canital improvements and mitigate the effects of drought and a Finance Corpor-
ation to provide long-term low interest loans for agricultural, industrial,
and commercial projects.
In June of this year the Libyan Government submitted a memorandum to
the UN Economic and Zocial Council on the additional technical and financial
assistance required to meet its urgent development needs. A Five Year Capital
Development Program was outlined calling for the expenditure of almost
$18,000,000 in addition to the maintenance of a drought relief fund of
$2,800,000. Much of the needed aid should become available as the result of
a financial agreement with the UK signed in July along with a treaty of friend-
ship and alliance. Under its terns, Libylwill receive annually for the next
five years $2,800,000 for economic development and about $7,700,000 for bud-
getary purposes. The EDCOOC proposed in August that the General Assembly in-
vite all governments in a position to do no to provide financial and technical
aid to Libya, and recommend that the UN and its specialized agencies give due
consideration to Libya's specific development needs, if and when further means
become available for assisting underdeveloped areas.
Ehtional unity. 111th the establ.lchment of a Libyan state, there were
those who feared -..hat the centrifugal forces of regional separatism would
prevent the development of strong national unity. They pointed, among other
things, to: (1) the wide differences in population among Tripolitania's
800,000 inhabitants, Cyrenalca'n 7,00,000, and the 50,000 of Fezzes, and the
determination of the two lut rareas to avoid interference in their own af-
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5
fairs by Tripolitania, (2) the great stretches of desert seizrating these
three"islands" and the resulting difficulties of rapid or extensive inter-
communication, and (3) the differences in outlook arising from separate local
histories, degree of contact with foreigners, and structures of society. Cy-
renaica contains the most homogeneous, closely-knit tribal nomadic and semi-
nomadic peoples; Trinolitania, a population more Westernized, detribalized,
and less ethnically or politically cohesive; and Fezzan, largely sedentary
groups of politically untutored oasis dwellers.
The period of less than two years since Libyan independence is indeed
too short to permit fair judgment on the future prospects for national unity,
but it is well to bear in mind some of the chief elements which are working to
overcome this problem with even chances of success. Aside from the unifying
effects of language, religion, and culture they include: (1) the central
position of the King, Idris I, as a symbol of the united allegiance of all
marts of Libya and as a force for emphasizing the overriding importance of
national over provincial interacts; (2) the federal nature of thp constitu-
tion, which while allaying the p.:.ovinces. fears of being dominated by one
another, nevertheless przvides the framework for a strong central government
in control of the major sources of revenue; and (3) the sense of rational con-
sciousness derived not only from sheer existence as an independent state but
also from the slowly growing realization of Libya's citizens?especially in
Parliament and in the urban centers--that they share common domestic and
forelmn problems.
Adantetien tr, WPn Tretitutiene. Given the political and social
patterns which have long characterized Libyan society, it would be surprising
if custom and usage did net result in special adaptation of the Western form
of responsible government provided in the Constitution to the peculiarities of
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the Libyan environment. Thus, political power is likely to remain for some
time in the hands of a few prominent families and traditional leaders sup-
plemented by a small but growing educated urban elite. Submission of the
individual to the group and acceptance of decisions made by traditional lead-
ers with higher social status have long been the rule. To most Libyans?inex-
perienced in self-government beyond the tribe or village and accustomed to
associating central and regional government vith foreign domination --loyally
to the state and direct participation in government are still innovations.
While these attitudes are changing, especially in the urban centers and coastal
Tripolitania, they remain significant limitations to any rapid or drastic
changes in the traditional social system.
The Libyan Constitution affords considerable latitude in this respect
for a gradual transformation toward more modern practice. The framework for
responsible government in the western sense is clearly provided through direct
responsibility of the Council of Ministers to a popularly elected lower house,
exemption of the King from all responsibility, and the required countersigna-
ture of his ministers to all his acts of state. Despite these limitations on
the King, the Constitution enables him to take control if an emergency so de-
mands. Thus, he may exercise a sucpensive veto on legislation, dissolve the
lower house or adjourn both houses of Parliament, and today, when legislators
tend to follow his lead, he may appoint and rerzve his ministers virtually as
he pleases.
In the past two years national stability has been fostered by the able
leadership of ?rime Minister Mahmud Muntasser, but in trying to reconcile his
responsibility to both King and Parliament, he has occasionally been placed
in a difficult and ineffective position. His posnible resignation in the
near future because of limes.wculd leave few other Libyans with known corr
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parable qualifications to succeed him. A similar uncertainty surrounds the
question of the royal succession, which the Constitution leaves for determina-
tion by the preaent King, a man without issue and frail in health.
Earelmn Policy Libya deoires the friendship both of the Aral, states
and of the Great Powers of the West; yet so long as strained relations exist
between certain members of both groups, Libya's middle position could be mis-
understood by either side. On the other hand, Libya might serve as a bridge
in bringing the two closer together. Libya is tied to the Arab world not only
by religion, culture, and a similar history of recent foreign domination but
also by membership in the Arab League. At the same time, by permitting the
UT:, the US, and France to maintain military facilities on Libyan soil and by
recently concluding a treaty of friendship and alliance with the UK, the Libyan
Government has shown its readiness to be associated closely with the Western
powers. This treaty specifically stipulated that nothing therein is to preju-
dice Libya's obligations under the Covenant of the Arab League and thus places
Libya in a position similar to that of Iraq and Jordan in being linked both
to the Arab League and to the UK by a treaty of alliance.
SOMALTIA1'71)
Many of the problems faced by Libya in mastering the art of self-
government and establishing its economy en a firm and solvent basis are pre-
sent in even more serious form in the Trust Territory of Somaliland under
Italian Administration. The handicaps to be overcome before December 2, 1960,
when, in accordance with the decision of the UN General Assembly, Somaliland
is to became independent, are truly formidable if independence is not to be
premature.
The difficulties, both human and physical, present a challenge which
can be met only by time, persistent application, adequate financial resources,
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and human ingenuity. Sonaliland's inhabitants (1,275,CCO) aro predominantly
pastoral nomads eking out a precarious existence in a semitnrren lend, il-
literate, untrained in modern skills, and unprepared to exercise the modern
institutional techniques of national self-government.
The Italian administering authority, uuder general gull:Inc:: of the UN
Trusteeship Council, is endeavoring to raise the standards of education and
health, organize representative and democratic institutions, and increase the
productivity needed to approach economic self-sufficiency. Educational and
technical training has made a good begininGhandicapped as it is by nomadism,
the necessity of using foreign languages in instruction, shortage of teachers
and funds, and the pressure of time. A representative territorial assembly
has been established and on lower levels, residency and municipal councils.
These bodies are advisory at the moment, but as they gain greater knowledge
of parliamentary in:ocedure and appreciation of the need for considering public
problems on a broader basis than the traditional kinship group or tribe, they
will be granted fuller legislative authority. Members of the younger, educated,
urban Somali elite have sought with some success to break down tribalism
through emphasis on modern education and political organization (notably the
Somali Youth Longue). Their effectiveness has been limited, however, not only
by the sheer magnitude of the nroblr2m but also by their difficulties in bring-
ing themselves to cooperate wit tce Italian authorities, whose return they
had bitterly opposed.
Somaliland faces stagz.ering problems in achieving economic independence,
given its meager natural resources, its perennial budget deficits (amounting
to roughly one-half of expenditures) and its adverse balance of trade. Its
exports (chiefly bananas, cotton, and hiects ana skins) pay for only about 40
per cent of its imrorts. Short of promising discoveries of oil, not yet ac
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hicved but being sought, or of some other valuable resource, Somaliland will
find itself heavily dependent on external financial and technical aid after
independence. There are possibilities, however, for improvements which could
reduce this need. S.,:udies (some of them undertaken by the UN and its Special-
ized Agencies), plans, and programs are already under way to expand the small
agricultural potential, coastal fishing, and the processing of raw materials.
FTTTOPIPL-FFLT197A
Ethiopiwspostwaryearshavebeenmarkedbytgreat progress in moderni-
zation, federation and increasingly active participation in world affairs.
yodern)zatipn. For centuries Ethiopia was laolated from the rest of
the civilized world primarily because of geographic inaccessability--the rugged
interior of the country, fringed by desert, the absence of adequate all-weather
reads, and the lack of a direct outlet to the Bea. Its peoples, mostly peasants
and herdsmen of many strains and tongues, have livdin a tribal and semifeudal
society strongly resistant to innovation and, not without reason, suspicious
of outsiders. Long ruled by a "King of Kings," whose theoretically absolute
power fluctuated in strength from one century to another with the tides of
internal warfare, Ethiopia has made its greatest strides toward adoption of
Western institutions during the past quarter century tinder its present Emper-
or, Haile Selasai I. Sc rapid have been the changes :that under a less wise
ruler, the strain of adjustment would have taxed sorely the loyalty of the
traditional, conservative lesser ruling class. Economically the country re-
mains relatively undeveloped, and the impact of new ideas and methods still
has affected dir.-ctly only a comparatively small proyIrtion of the entire pop-
ulation of 16,000,000. But the seeds have been sown for much wider advance-
ment in future generations.
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The moat notable changes are visible in the fields of education, gov-
ernment administration and economic development. Despite the serious decima-
tin or the, Ethiopian intelligentsia during the Italian occupation, the govern-
ment has pushed energetically ahead since its return in 1941 toward the goal
of education for the masses. Education is of major concern to the Emperor and
is allotted over 10 per cont of the national budget. 3tudent enrollment in
public schools rose from 19,000 in 1943 to over 60,000 in 1952, including more
than 6,000 girls. The number of government schools--most of them with only
4 or 5 grades and only 4 of them secondary increased from 120 to over 500.
Ethiopian teachers, most of whom have had only a few years of schooling, now
number over 2,000 in contrast tolOttenth that amount before the war; and
fLreign teachers, over 300 instead of about 40. To the various specialized
post-primary schools already in existence was added in 1951, a university col-
lege of arts, sciences, and law; an agricultural college along with other
agricultural and technical schools are now being planned. Despite these
steps, there is wide room for improvement, as the Ethiopian Government is
well aware, in such matters as teacher training, expanded schooling, and a
more varied and practical curriculum.
The
structure of government was reorganized after 1941 with much great-
er centralization and unification of control and the adoption of such innova-
tions as a budget, centralIzel accounting, and a more modern system of taxa-
tion and currency. There are etill too few qualified persons to handle the
governmental workload, a corr-.1:pending reluctance of ministers to delegate
responsibility to subordinates, and--ao in all governmentu--problero of bur-
eaucratic jurisdiction. The great need for technically trained personnel
will continue for many yearsdespite the increasing availability of Ethiopians
with higher education. Foreign advisers still play an important role in cer-
tain of the ministries.
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The Ethiopian economy, based primarily on the export of coffee, 1150es
and skins, cereals, pulses, and oilseeds, has enjoyed a postwar prosperity
reflected in balanced budgets and favorable balances of trade. Long handicapped
In further economic expansion by its limited communication facilities, Ethiopia
is now beginning to reap the benefits of loans from the International Bank for
Reconstruction and Development, which, together with its own expenditures, are
now being used to improve roads and telecommunications as well an to finance
the operations of a development bank. The country is new raising sugar cane
for the first time in quantities which in the near future should be enough for
Its own domestic requirements. Similar production plans are under connidera-
tion to end the need for imports of raw cotton. With the help of technical
aasistance from the un and Specialized Agencies of the UN, many other improve-
ments are underway in agriculture as well as education and health. Thus, a
cattle rinderpest control program is part of a wider sc.:ieme to use more fully
the potentialities of Ethiopia's large livestock population. Other promising
signs of economic activity include the successful operations of the Ethiopian
An linen, Inc., the search for oil, thus far without discovery, and the con-
tinued interest of foreign investors in ponnible opportunities within the
country. While the government officially welcomes investors, it has not often
thus far taken prompt action to facilitate their plans.
FeJleretien. The federation, as a result of UN decision, of Eritrea
with Ethiopia under the Crown cf the Emperor in September l92 assured Ethiopia
a longsought direct access te the sea, an enlarged free trade zone, and more
diversified labor skills. It also removed Ethiopia's anxiety that Eritrea
might bc occupied by a future aggressor, and it brough into closer contact
peoples with some common geographic, historic, and ethnic ties. At the same
time Eritrea was assured by the UN resolution, among other things, of an or
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portunity for local self-government, protection by the feleral government
against possible external aggression, and the removal of the few existing
impediments to the free flew of trade with Ethiopia, its chief source of
grain supply.
Grant tact and felxibility will be essential on the part of both
Ethiopians and Eritreans if the new federation is to function harmoniously.
While the trend in recent years within Ethiopia has been toward the strengthen-
ing of the central government's authority over the provinces, thc soparate au-
tonomy of Eritrea may stimulate desires in some of the Ethiopian provinces
for similar status and privileges. The urban inhabitants of Eritrea have
been disturbed by the rise in the cost of living immediately after federation,
as a result of higher customs and ether duties. Ethiopia, however, has as-
sured the United Nations that it will respect Eritrean autonomy and grant
Eritrea all necessary economic assistance.
T.,-.1e in Tnternntionnl Affairs. The emergence of Ethiopia from its
centuries of isolation to active participation In affairs of the outside
world reflects the trends toward modernization already noted within the
country as well as the political sophistication of its Emperor. represented
abroad today by at least 26 diplomatic and consular posts, Ethiopia has joined
folly in postwar international activities since the Pan Francisco Conference
in 1.945. Despite its failure in 1935 to receivn effective aid from the Leaguo
of Nations against Fascist Ethiopin's subsequent sufferings have
if anything reinforced its advocacy of the principle of cellcotive security.
Striking evidence of this position was Ethiopia's sending of troops, who gain-
ed a high reputation for valor, to join the UN military effort in Korea.
In December l92, the Emperor declared in a press interview not only
that Ethiopia would do its utmost to join a Middle East Defense Organization
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If one wore established but sloe that he would welcome an American military
mission to help modernize hio forces. The US and Ethiopia in May l95 c,r.-
eluded a Mutual Defense Assistance Agreement under which the US will supr1-7
military aid and training assistance and thus enable Ethiopia to strengthen
its own internal defense and capabilities for joining in the collectivo
fence of this part of the frec world. In determining that Ethiopia was eliG?
ible for grant aid under the Mutual Security Act, President Eisenhower took
into consideration Ethiopia's strategic position in the Near East and Red
Sea area and the importance of Ethiopia's defensive strength to the seculity
of the US.
From the foregoing discussion it should be clear that the former
Italian Colonies and Ethiopia have made steady progress since the war toward
modern self-goverment and, in certain territories, toward economic viability.
These accomplishments are magnified in the light of the physical and human
handicaps under which they have been achieved. While these difficulties are
oimilar to those found elsewhere in colonial Africa, they appear greater in
some respects, given the new cr promised independence of some of these ter-
ritcrieo and their limited resources.
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