South Africa: Politics, Economy, and U.S. Relations
Released: 2014-05-05T00:00:00

Summary: South Africa is a multi-racial, majority black southern African country of nearly 52 million. It held its first universal suffrage elections in 1994, after a transition from white minority rule under apartheid, a system of state-enforced racial segregation and socioeconomic discrimination. South Africa entered a period of mourning in late 2013, upon the death of its first post-apartheid president, Nelson Mandela. He is viewed as the founding father of the country's nonracial democratic system, the 20th anniversary of which was recently celebrated prior to national elections on May 7. South Africa is influential regionally, due to its political, trade, and investment ties across Africa and its active role within the African Union. It is viewed as a U.S. strategic partner in Africa, despite periodic foreign policy differences. In mid-2013, President Obama traveled to South Africa, among other African countries. Key issues addressed in South Africa included bilateral political and trade and investment ties, development cooperation, and shared U.S.-South African aims regarding similar issues across Africa, as well as democracy, youth leadership development, and peace and security.

Congress has long been engaged with South Africa, notably during the anti-apartheid struggle, and with regard to post-apartheid socioeconomic development efforts, a key focus of bilateral ties. Since 1992, South Africa has been a leading recipient of U.S. foreign aid, mostly devoted to addressing HIV/AIDS and other health challenges. Aid oversight has drawn the bulk of South Africa-related congressional attention in recent years. U.S. policy makers are also increasingly focused on efforts to strengthen already growing U.S.-South African trade and investment ties. Other key areas of bilateral engagement include security cooperation and an ongoing U.S.-South African Strategic Dialogue. Established in 2010, the Dialogue centers on health, education, food security, law enforcement, trade, investment, and energy, among other issues.

South Africa has the largest, most diversified, and highly industrialized economy in Africa. It has enjoyed moderate economic growth in most recent years. Average per capita incomes and access to education have grown across racial groups, notably for blacks. Despite post-apartheid national socioeconomic gains, South Africa remains a highly unequal society with respect to wealth and income distribution and access to jobs, social services, utilities, and land. Most blacks are poor, and average black incomes are far smaller than those of the historically privileged white minority. Blacks also suffer very high unemployment rates (36% in 2011), and have far less access to education. Shortages of quality housing, utilities, and social services in townships—the vast, high-density housing settlements where many of the poor live—spur ongoing social and political tensions. Other key problems include public corruption and widespread violent crime. Vigilante justice and mob violence is not uncommon, and heavy-handed police tactics sometimes result in human rights abuses. South Africa also suffers high rates of HIV/AIDS.

In late 2012, the governing African National Congress (ANC) party, despite some reported internal divisions, reelected as its president Jacob Zuma, ahead of the May 2014 national elections. The parliament elected Zuma to his first term as president of South Africa in 2009. The ANC government faces the substantial challenges noted above, along with others, including labor unrest, rising dissatisfaction within key labor constituencies, and dissatisfaction among youths. Youth populations face particularly high jobless rates and may lack older generations' continuing allegiance and gratitude to the ANC for helping to end apartheid. To address these diverse challenges, all of which are electoral issues, the government is investing billions of dollars to upgrade infrastructure and improve public service delivery, but is likely to face continuing challenges in meeting popular expectations.


subsections: section_title: Key Current Issue: Elections
paragraphs: On April 27, 2014, South Africa celebrated Freedom Day—marking the 20 th anniversary of the first non-racial democratic elections in 1994 and "the end of over three hundred years of colonialism, segregation and white minority rule"—ahead of the fifth democratic post-apartheid national election on May 7. The governing African National Congress (ANC) political party is widely expected to maintain an electoral majority after the polls, though its share of the vote may shrink. As discussed in this report, the ANC faces substantial, increasing criticism focusing on its governance record by many in the general public, a range of civic leaders, and by rival political parties, the number of which has recently grown by two. An early 2014 opinion poll pegged the ANC's level of support at 53%, while it garnered about 66% in two recent polls. The latter figure is in line with its share of the parliamentary vote in the last election in 2009. These issues and the elections are discussed below. 

section_title: Introduction: U.S. Relations with South Africa
paragraphs: In late June 2013, President Obama traveled to South Africa after visiting Senegal, prior to a visit to Tanzania. His trip to the African continent highlighted U.S.-African cooperation and policies in the areas of trade and investment, development, democracy, and peace and security, which the President addressed in a "framing speech" at South Africa's University of Cape Town. The President also announced plans to host a U.S.-Africa heads of state summit in the United States in 2014, now slated to be held in early August, and the roll-out of Power Africa, "a new initiative that will double access to [electrical] power in sub-Saharan Africa." While in South Africa, the President held a meeting and a joint press conference with President Jacob Zuma of South Africa, which he described as a "critical partner" of the United States. Their meeting focused on U.S.-South African bilateral relations, which President Obama said are "extraordinarily strong," and a wide range of regional and global political, security, economic, and development issues. 

Among other activities in South Africa, the President also held a town hall meeting as part of his Young African Leaders Initiative, initiated in 2010; met with the African Union Commission chair on continental issues and regional organization capacities; and visited the Desmond Tutu HIV Foundation Youth Center. The Center visit was intended to highlight community-based solutions to healthcare challenges and the Administration's global health agenda, in particular efforts to help improve public health systems in South Africa and elsewhere in Africa.

The State Department characterizes South Africa as a U.S. "strategic partner," and President Obama's trip to the country underlined that bilateral ties remain close, as they have been since 1994, despite periodic differences on some foreign policy issues. Socioeconomic development is a key focus of bilateral cooperation; since 1992, South Africa has been a leading African recipient of U.S. aid, the bulk of which supports HIV/AIDS and related health programs. U.S.-South African trade ties are also important. Total trade (exports and imports) more than doubled over the past decade, reaching a record of $16.7 billion in 2011 before declining slightly to $16.2 billion in 2012 and $15.8 billion in 2013. South Africa has enjoyed a significant but declining trade surplus with the United States and is a major export and investment destination for U.S. businesses in Africa. Security cooperation is another key area of engagement. In 2010, the two countries established a Strategic Dialogue centering on cooperation related to health, education, food security, law enforcement, trade, investment, energy, and nonproliferation. South Africa hosted two visits by former Secretary of State Hillary Clinton, as well as by other top U.S. officials. John Kerry had not made a visit to South Africa as Secretary of State as of early May 2014. First Lady Michelle Obama traveled to South Africa in 2011, as did Vice President Joseph Biden and his wife in 2010, when they attended the World Cup.

Congress has played an active role in U.S. relations with South Africa. This was particularly true during the struggle against apartheid, beginning in the late 1960s, through the first decade that followed the 1994 transition to majority rule. In recent years, congressional engagement with South Africa has mainly focused on foreign aid program oversight, particularly relating to HIV/AIDS and other healthcare-related programs. In addition to these traditional areas of interest, efforts to bolster trade and investment ties with South Africa, and with Africa generally, are drawing increasing congressional attention. Trade was a key focus of an early 2013 bicameral congressional delegation to South Africa.

section_title: Country Overview
paragraphs: South Africa, a multi-racial but predominantly black country about twice the size of Texas, has the largest, most diversified, and most industrialized economy in Africa. South Africa is also influential regionally, due to its investment and political engagement in many African countries and active role and leadership within the inter-governmental African Union (AU). It has enjoyed economic growth for more than a decade, apart from 2009 when the economy contracted, and average per capita incomes and access to education have grown across racial groups, notably for blacks. Nonetheless, South Africa remains a racially unequal society with respect to wealth and income distribution and access to jobs, social services, and utilities. There are also significant regional, rural-urban, and intraracial disparities. Most black South Africans live in poverty, and average per capita black incomes are one-sixth as large as those of the historically privileged white minority, although this disparity has gradually declined. Blacks are also disproportionately unemployed, at a rate of 36% in 2011, compared to 5.9% for whites, and have relatively less access to education, although black education rates are steadily increasing.

South Africa faces multiple challenges, many related to poverty and public service provision. Most South African cities are surrounded by vast, high-density informal housing settlements, known as townships, which are populated mostly by blacks and coloureds. Shortages of formal housing (i.e., legally registered, generally durable cement houses, as opposed to improvised shanty structures often constructed by squatters), water, electricity, and social services in townships have contributed to growing social and political tensions. Township protests demanding improvements in these areas have increased in recent years. Labor unrest is also common and rose sharply in 2012, and has remained so, notably in the mining sector. Public corruption is another key challenge, and there are high rates of violent crime, particularly rape. There are periodic reports of vigilante and mob violence, and police reportedly often use heavy-handed tactics to respond to crime and public unrest, occasionally resulting in serious human rights violations. South Africa is afflicted by high and gradually increasing rates of adult HIV prevalence. The rate in 2012 was 17.9%.

section_title: Politics and Governance Under President Zuma
paragraphs: The ANC has held a large majority in the National Assembly (parliament) since the first universal suffrage elections in 1994, and currently holds a majority just shy of the two-thirds required to amend the constitution. The parliament elects the country's president and, as a result, the ANC has controlled the executive branch since 1994. The ANC customarily nominates its party president to serve as national president, with some exceptions (see textbox below). The assembly elected the incumbent ANC president, Jacob Zuma, to his first term as national president in 2009. 

Despite rising criticism of Zuma and internal party challenges to his candidacy, Zuma mounted a carefully crafted, successful campaign to ensure his reelection as head of the ANC at a late 2012 ANC party congress. He easily thwarted a belated and reportedly ill-coordinated rival bid by his deputy, Kgalema Motlanthe. Zuma's election as head of the ANC means that he is almost certain to win a second term as South Africa's president.
subsections: section_title: The ANC and Other Political Parties
paragraphs: While the ANC is the dominant party in South Africa, it faces a growing number of opposition parties. The ANC, an ideologically leftist political party, earned much of its political support by leading the struggle against the apartheid system. It is dedicated to ending the diverse, deep-rooted, enduring social inequalities created by apartheid; and to ensuring social unity and equal access to rights, opportunities, land, and other resources, including through affirmative action and redistribution. It seeks to attain these ends by creating a "developmental state" built on a mixed economy combining state and other forms of collective ownership with private property and a market-based system. The ANC often supports social democratic-leaning development policies, and many of its political documents are steeped in leftist, often radical political doctrine, but ANC-led state decision makers often implement more centrist, pragmatic, market-based policies. The ANC governs in a tripartite alliance with the Congress of South African Trade Unions (COSATU) and the South African Communist Party (SACP). Under the alliance, which guides ANC policy, COSATU and SACP are independent entities, but their members nominate political candidates through the ANC, hold ANC leadership posts, and help shape ANC policies. 

The second-largest party in parliament, the Democratic Alliance (DA), was formed as a means of challenging ANC dominance. In subsequent elections at various levels of government the DA gradually increased its electoral strength, and in 2009 won a majority in the provincial legislature of the Western Cape. In 2010, another opposition party, the Independent Democrats, announced that it would merge with the DA. The currently female-led DA has a substantial white and coloured support base, but has faced challenges in attracting broad black support.

A long-time key opposition party is the mostly ethnically Zulu Inkatha Freedom Party (IFP), headed by Chief Mangosuthu Buthelezi, who has been active in politics for decades. The IFP has steadily lost parliamentary seats since the 1994 election, however, in recent years due partially to the rise of Zuma, whose own Zulu background and popularity have drawn the support of many Zulus. The IFP also suffered defections in 2011, when its former chairwoman left the party to form the National Freedom Party.

A newer party is the Congress of the People (COPE), formed by a dissident group of former ANC government ministers in 2008, ahead of the 2009 election. COPE was formed in the wake of Zuma's successful ouster of Mbeki as head of the ANC in 2007, which caused enduring rifts between the two leaders' supporters. There is substantial animosity within the ANC for COPE. COPE won 30 seats in 2009, becoming the third-largest party in parliament and arguably curtailing the strength of the ANC, but fared poorly in municipal elections in 2011, when it garnered only 2.6% of votes. 

In July 2013, another key ANC dissident, Julius Malema, a former ANC Youth League (ANCYL) president expelled from the ANC for breaking party rules in 2012, launched a rival party, the Economic Freedom Fighters (EFF), together with allied ANC dissidents and others. The EFF is seen as an important challenger to the ANC but not, to date, a major one. It appears to draw from the ANC's more radical and poorer political base: jobless youth, workers, and other constituencies whose members feel disenfranchised by or alienated from the ANC, or who seek the kinds of radical nationalist economic policy changes that the EFF supports. It is also seen as likely to take votes from some smaller opposition parties. 

The EFF may well win some seats in the National Assembly, as discussed below, and if so, Malema would likely lead the party's parliamentary delegation. Malema's future, however, is in question, as he faces money-laundering, fraud, and racketeering charges related to alleged state contracting malfeasance, and bankruptcy and asset seizures related to a tax probe. Malema is a former avid supporter of Zuma and was elected ANCYL president in 2008, but he broke with Zuma and became one of his most vocal critics after Zuma became president. He was essentially expelled from the ANC for repeatedly harshly criticizing Zuma and other top ANC leaders. Malema's charismatic leadership style and inflammatory rhetoric—such as calls to nationalize the country's mines and seize and redistribute to poor blacks white-owned farmland, among other radical policy solutions to challenges facing the ANC—have earned him both impassioned followers, but also many strong critics. They have also prompted official sanction on occasion; prior to being expelled from the ANC, he was convicted for hate speech in 2011. 

There are a number of minor parties, and in early 2013 Mamphela Ramphele, a veteran anti-apartheid activist, academic, and businesswoman, announced the formation of a new one, Agang ("let us build" in the minority Sepedi language), aimed at contesting ANC rule. Many analysts judge its prospects alone as poor, but it adds to the number of parties that could coalesce into a more potent challenge to the ANC. That potential was reflected in an early 2014 decision by Ramphele to lead Agang into an electoral alliance with the DA under which she would have become the DA's presidential candidate. Internal Agang opposition to the alliance, however, led Ramphele to terminate it a week later, prompting questions over her political acuity, reliability, and leadership skills.

section_title: 2014 Elections
paragraphs: On May 7, voters will cast separate ballots to elect members of the National Assembly and of nine provincial legislatures under a direct vote closed-list proportional representation system. This means that voters will elect parties, which will be allocated seats in the two levels of representative government proportional to their share of the vote. Seats will be awarded to individual candidates based on their position on ranked lists of party-selected nominees for office. At the national level, the lists are made up of 400 candidates, equivalent to the number of seats in parliament, divided into 200 members selected from national party lists and 200 from regional party lists. One seat is allocated to a party for each 0.25% of the vote it receives. After the election, the National Assembly will elect the national president and each provincial legislature will elect a provincial premier, as well as the members of the National Council of Provinces, the national upper house legislative chamber. Twenty-nine parties are contesting the national elections. The same parties, a sub-group thereof and, in some cases, additional parties are contesting each provincial election.

At issue in the election are mainly the key policy challenges that are the focus of widespread discontent with the ANC. The main ones include high unemployment; lack of access to and poor quality education; corruption; crime and security challenges, including police abuses; and alleged ANC anti-democratic actions, especially related to cases of alleged constraints on expression and access to information. Public discontent over poor public goods and services provision, despite a significant post-1994 rise in access to such resources under the ANC, is another major issue. President Zuma has been a key object of rising public ire regarding an allegedly non-transparent $23 million government upgrade of his personal homestead compound and other matters (see textbox on Nkandla, below). He is seen as a potential electoral liability for the ANC by many observers—he has been booed at several public appearances, including before a global audience during a televised memorial for Nelson Mandela, and has received a large amount of negative press coverage. The party has nevertheless defended him, and many long-standing ANC supporters voters are likely to vote for the party despite their discontent over Zuma's record. These and other issues and controversies are discussed further below.

A fundamental question at issue is whether the majority ANC will gain enough seats (at least two-thirds, or 267 seats) to give it power to amend the constitution—or whether its share of the vote might dip below 50%. This would require it to form a governing coalition with one or more parties and would suggest that voters were no longer willing to support it on the basis of its anti-apartheid leadership role, and had repudiated it based on its post-1994 governance record. Opposition parties are sharply contesting the ANC's electoral dominance. In addition, the ANC faces dissent within its own traditional support base associated with political and strike-related turmoil within the traditionally ANC-affiliated labor movement. This has led some observers to predict the eventual establishment of a labor party. A number of high-profile former ANC members or supporters citing a poor ANC governance record—including Anglican Archbishop Emeritus and Nobel prizewinner Desmond Tutu—have also publicly stated that they will not vote for the ANC or have called for voters to spoil their ballots or vote for small parties. This slow fragmentation of the ANC's base—and the political independence and relative political disengagement of the so-called "Born Free" generation, those born in 1994 or later, about 40% of the population, who reportedly vote in far smaller numbers than older generations—has prompted some observers to predict a gradual loss of ANC dominance in future elections.

Despite such challenges, the ANC is widely seen as likely to maintain a parliamentary majority, and Zuma, as head of the ANC, is almost certain to be re-elected as national president. Polling in 2014 has varied, with support for the ANC by one key polling firm, Ipsos, showing the ANC with 53% in late 2013 and 66% in March 2014. Other key parties that have drawn polling-related media attention are the DA and the EFF. The same Ipsos polls showed the DA with an 18% and then a 22.9% share, and the EFF with a 4% and then a 3.7% share. As with many polls, the Ipsos findings have come under methodological criticism from some quarters, but other polls have shown broadly proportionally similar numbers, typically with support for the ANC being reported in the low 60 th percentile. Similarly, separate educated guesses by three political analysts in the latter half of 2013 projected 56% to 62% for the ANC; 23% to 27% for the DA; and between 1% and 10% for the EFF. Other smaller key parties, like Agang, Cope, and the IFP, were allocated between 2% and 6%. 

Campaigning has been hard-fought, and has featured several allegations of state bias against the DA and the EFF in the form of the rejection of applications to use public facilities for rallies, and the rejection by the state South African Broadcasting Corporation of ads by the same parties on various grounds, including claims that a proposed DA ad might incite violence against police. A shadow has also been cast on the country's Independent Electoral Commission (IEC) and its administration of the election following a finding by the Public Protector, akin to a government-wide inspector-general, that the chair of the IEC was guilty of "maladministration and misconduct" in a reportedly non-transparent IEC procurement case. Several opposition parties sued to have the chair, Pansy Tlakula, removed from office based on allegations that her leadership undermines the credibility of the IEC and of the May election. After an early May hearing in the case, however, the Electoral Court postponed further proceedings until June, meaning that Tlakula will administer the polls.

section_title: The Zuma/ANC Agenda: Policy Approaches and Challenges
paragraphs: South Africa has made great socioeconomic strides since the end of apartheid, but popular expectations and demands for change remain high, and the country faces a raft of problems. Far more schools, housing, and utilities are now available, notably to blacks, who make up 79% of the population. As the group most disadvantaged by apartheid, however, blacks continue to be the most impoverished portion of the population. Black access to education has grown substantially, as have black incomes, although massive gaps remain vis-a-vis whites. The range of other challenges that the country faces is diverse. According to analyses presented in a major 20-year national development plan (NDP) by the National Planning Commission (NPC), an executive branch entity:

Unemployment and underemployment rates are very high; the quality of education, especially for the black majority, is poor; and South Africa remains a divided society, both socioeconomically and spatially (e.g., there are sharp rural-urban divides, and poor urban areas are often located at a distance from jobs, infrastructure, and public services), but most of all racially. Infrastructure is poorly located, inadequate, and under-maintained. Scaled-up investment in integrated freight and passenger transport systems, communication technology, and electricity generation and distribution systems is needed. Spatial divides hobble inclusive development; the poor often reside far from jobs, housing, infrastructure, and economic opportunity zones. Integrated urban and rural-urban planning investments are needed. The economy is unsustainably natural resource-intensive. Land, water, and mined commodity reserves are under stress, and climate change threats loom. Public health systems cannot meet demand or sustain quality services, and compete with the private sector for trained workers and other resources. Public services have been scaled up but cannot meet demand. Quality is also uneven and often poor, in part due to political rather than professional management and a lack of accountability structures. Public corruption levels are high, partly due to weak, abuse-prone financial and procurement systems; lack of capacity to monitor for and sanction abuses; and unequal wealth distribution.

The NDP lays out detailed goals and plans for addressing the problems identified above, among many others, and has been endorsed by parliament. It tracks closely both with other short- to long-term government economic development plans and with the ANC's political and policy agendas, which closely inform and guide government action. Multiple recent assessments of political and economic progress since 1994 have been issued to commemorate South Africa's post-apartheid 20 th anniversary. Many broadly reflect findings akin to those set out in the NDP.

section_title: Governance Challenges
paragraphs: While the challenges identified and solutions offered by the NDP are the product of sober public policy analyses and planning, they also reflect a politically realistic self-assessment by the government; its findings dovetail with the views of many government and ANC critics. This is particularly true of unemployment, lack of educational and healthcare access, poor public service delivery, crime, and corruption, which are notable sources of widespread public anger. A wave of often violent mass labor strikes in 2012 was accompanied by a sharp rise in protests over inadequate township service delivery in 2012. At least 226 such protests occurred during the first eight months of 2012 and, as with labor protests, many were violent. Such protests have been common for many years but have steadily risen. Ineffective police responses or other actual or perceived failures by the criminal justice system have also often been the focus on local protests in recent years. In some instances, protests turn into acts of vigilante justice (e.g., lynchings and extra-judicial mob beatings or killings of suspected criminals). 

Corruption by economic elites, including some senior ANC members, of policies aimed at reversing the economic inequalities of the apartheid era has also stirred resentment. The same is true of the ANC's reportedly often politicized management of public goods and services, which frequently appears to financially benefit its local or national leaders, their kin, or associates. Such practices and the local political violence that they may generate are a reflection of the dearth of economic opportunities for blacks. For blacks with limited education and job prospects, local government posts gained through party ties may be one of the few ways out of poverty. Such actions often breed antipathy, however. According to one writer:

Local protests, in which [the ANC's] own members are participants, are increasingly hard to manage. While in the past, protestors symbolically burned public property, targets are now the homes, cars and persons of ANC councilors. ANC branch and regional politics has become dirty and violent, with some members carrying firearms to meetings and attacks and shootings of local leaders are not infrequent.
subsections: section_title: Corruption
paragraphs: Criticism of the ANC on corruption grounds is not limited to the party at large or its local branches; President Zuma and some members of his cabinet have also been reproached on this front. News and research reports have documented numerous cases of alleged patronage, influence peddling, and explicit criminal acts of corruption during Zuma's tenure, and some analysts allege that the incidence of such acts is increasing. When he took office in 2009, South Africa ranked 55 th best out of 180 countries on Transparency International's Corruption Perceptions Index. By 2012, it had dropped to 69 th of 176 countries assessed. The government admits that corruption is a problem, and Zuma has taken strong public stances against it, but as discussed below and in the textbox profiling Zuma above, Zuma himself has been the subject of a series of public controversies related to corruption and other matters. Critics allege that Zuma has suggested that the ANC supports the use of politics to advance private gain—essentially, according to some, a system of corruption—on the basis of remarks he made in early 2013, when he stated that if a businessman joins the ANC, "your business will multiply. Everything you touch will multiply." The ANC, however, maintains that the statement merely indicated that the party is business-friendly. 

Under Zuma's tenure there have also been reports that prosecutions of suspected corrupt officials have been selective and that corruption cases reported in the press are not always officially investigated. In some instances, public information about state spending or administrative roles in public projects or deals involving party officials has not been released, and there have been some reported efforts to inhibit discussion of politically sensitive allegations in parliament and other formal forums. Over the past several years there have been other incidents pertaining to or suggesting acts of corruption, including a major school textbook procurement scandal—which added to criticisms of the Zuma government's education record—and an allegedly irregular mining deal linked to Zuma relatives. The latter was among several allegedly questionable political and business dealings between a business family called the Guptas and top ANC officials, including Zuma. There also have been frequent scandals over so-called "tenderpreneurship," in which state officials, politicians, and politically connected businesspersons, often ANC-linked, use their authority or influence to secure government tenders and contracts. These have included several property leasing scandals implicating top law enforcement officials. Diverse other types of police corruption, such as roadside bribe activity, and other types of irregular or corrupt dealings by state officials have been widely reported.

section_title: Crime and Police Responses
paragraphs: South African rates of violent crime are high, although rates for murder have steadily fallen (from 69.5 per 100,000 persons in 1994 to 30.9 in 2011/2012, according to South African Police Service [SAPS] statistics). In addition, it is common for perpetrators of crimes like robbery to aggravate such acts by also violently assaulting, raping, or killing their victims. Explanations for such brutality vary, and often trace the culture of violence among criminals to a mix of factors. These include norms formed under the apartheid system, including resistance to state repression and the widespread use of personal small arms; continuing stark socioeconomic disparities; patriarchal social mores and gender inequality; and other self-replicating norms of violence. Among violent crimes, the rape of women and children is very common, and rape and murder also features in identity-based hate crimes targeting sexual minorities. Although rape in South Africa is believed to be highly under-reported, South Africa still has among the highest rates of reported rape globally, at 127.5 per 100,000 persons in 2011/2012, according to SAPS data. Alleged rapists are often not found guilty; the country has a reported 12% rape conviction rate. 

Women's rights activists and others have long decried the lack of stronger public and state responses to sexual violence. A number of brutal crimes against women and children in 2012 and early 2013, however, galvanized more public outrage than such incidents generally have, and the ANC Women's League, backed by the ANC, called for a National Commission of Enquiry into rape and gender-based violence in early 2013. President Zuma also launched an anti-rape education campaign. Two other crimes in early 2013 also drew global attention to issues of gender violence and police misconduct in South Africa, the most high-profile being the killing by double leg amputee Olympic runner Oscar Pistorius of his girlfriend, which many women's rights activists have viewed as a crime of gender violence. 

Police misconduct incidents, ranging from serious human rights abuses—including torture and targeted killings —to high-level corruption to lesser misconduct, such as roadside bribery and absenteeism, are part of a trend, according to many observers and many media reports. Such problems reportedly have multiple roots. Management challenges are a key factor, in part because the SAPS is a large, nationally dispersed force of about 200,000 personnel. Other factors include training deficits, partially arising from a wave of post-apartheid hiring; a purported code of silence regarding internal misconduct reporting; and the residual effects of repressive apartheid-era police practices. Abuses also stem from a hardnosed policing culture that appears to be a reaction to the highly violent crime context that officers confront daily. Despite problems of misconduct, the SAPS reportedly has a core of well-trained officers and a number of highly specialized units, notably the Directorate for Priority Crime Investigation, a serious organized and commercial crime and high-level corruption unit. Moreover, SAPS is seen as a capable force by regional standards, and the majority of police reportedly do not engage in misconduct or abuse.

section_title: Youth Population: Political Potential and Character
paragraphs: Another long-term challenge for the ANC government stems from South Africa's large youth population, especially those born after 1994. Dubbed the "born free" generation, they comprise about 38% of the population and have always lived in a democracy. Of this age cohort, nearly 2 million (almost 10% of the potential electorate) will be eligible to vote for the first time in the 2014 elections. The group will make up nearly 23% of eligible voters in the 2019 elections (when the entire generation will make up 48% of the population). Adults under 35 years of age suffer especially high unemployment rates, estimated at over 50%. The "born-free" group shares frustrations with older generations over corruption, lack of services, and poverty, but many are reportedly not party-affiliated and lack older generations' continuing allegiance and gratitude to the ANC for its role in ending apartheid. Generational rifts have recently been on display within the ANC Youth League (ANCYL) in relation to the ANC's expulsion of the fiery, populist former ANCYL leader, Julius Malema. Youth also participate in more service protests than do older generations, but reportedly vote less often than their elders, which may attenuate their potential electoral influence. To cater to youth demands, political parties have vied to introduce state youth wage and jobs schemes (often in the face of union opposition), expanded skills training programs, and youth-friendly procurement and hiring preferences. 

section_title: Media and Expression
paragraphs: The Zuma government has reportedly sought to curtail access to public information and has used the state South African Broadcasting Corporation (SABC) to promote ANC views and limit criticism. Critics allege that Zuma and the ANC have used defamation suits or threats of suits to quiet critics. Another source of controversy has been the Protection of State Information Bill (dubbed the Secrecy Bill), which was enacted by parliament in late April 2013. Originally, it included tough sanctions against persons possessing most types of classified government documents, with no exceptions for matters of public or press interests. Civil society and media opponents suggested that the bill might abet politicized classification of legally or politically damaging information and subject those who reveal it to prosecution. The bill has since been amended to address such concerns, but questions remain over possible conflicts with the Promotion of Access to Information Act, a constitutionally required freedom of information law. Moreover, the bill may still contain loopholes enabling unwarranted classification and "can be used to jail whistle-blowers and journalists" who report on corruption.

section_title: Increasing Labor Unrest
paragraphs: In 2012, in addition to service delivery protests, a series of labor strikes disrupted production in the gradually declining but still economically vital mining sector and spurred later strikes in other sectors. Labor unrest has since continued. This wave of labor actions reflects a long-standing pattern of union activism. It has taken on increased political significance, however, because it reflects rising discontent by a key element of the ANC's political support base—alongside a more general growth in dissatisfaction over governance—and has led to questioning of Zuma's reputation as a champion of workers' rights and the working poor. 

Many of the strikes in the important platinum sector, including several that have featured violence, have been led by the insurgent independent Association of Mineworkers and Construction Union (AMCU). A growing number of miners have turned to AMCU for representation, claiming that leaders of the COSATU (and thus ANC)-affiliated National Union of Mineworkers (NUM), one of South Africa's largest unions, have ignored or ineffectively supported their demands for political reasons or due to financial ties to mining firms. Growing AMCU influence implies a possible weakening in grassroots labor support for COSATU, of which NUM is a key member—and thus for the ANC and Zuma—although, as discussed above, there are strong differences between COSATU and the ANC.

A particularly serious political challenge for the government was sparked by a wildcat strike at the Lonmin corporation's Marikana mine in August 2012. It began after NUM officials at the mine, who reportedly were paid miners' salaries plus Lonmin corporation bonuses, refused to meet with strikers demanding pay increases. Demonstrating strikers, mostly NUM members, were then assaulted by NUM officers, leaving two strikers fatally shot. Days of running clashes with police and mine security guards ensued, resulting in 10 reported deaths. A series of police actions to contain the protesters then prompted further striker-police clashes, during which gunshots were fired at the police. Police then opened fire on the strikers, killing 34 and wounding 78 or more.

The killings prompted widespread public outrage, especially after 270 arrested strikers were charged with legal responsibility for the murder of the slain miners under an apartheid-era law, even though the strikers were killed by the police. The Zuma government later dropped the charges in the face of harsh criticism. The police were further criticized after investigations suggested that some of the dead protesters had been shot in the back and or were killed at a distance from the main protest site. The massacre is the subject of a broad-ranging official commission of inquiry that remained active in early 2014. After the killings, workers and their relatives at the site continued to strike for several weeks and there were further non-fatal clashes with police. In September 2012, a deal was announced giving the strikers a historically high 22% salary increase. This success, as well as subsequent populist calls for nationwide strikes and mine nationalization, is widely viewed as spurring further large strikes at other mines in succeeding months and labor unrest in the transport, farming, and other sectors. Labor unrest, notably in the platinum and some other sectors, continued in 2013 and 2014.

section_title: The Economy
paragraphs: South Africa's economy is diverse and, until Nigeria revalued its gross domestic product (GDP) measurement methodology in April 2014, was the largest in Africa. The country is a famed wine producer and exports a range of agricultural products, such as wool, maize, sugar, and fruit and juice, although only about 10% of its land is arable and agriculture contributes less than 3% of the GDP. Industrial contributions to GDP, at 28.4% in 2012, are far more significant. South Africa is the world's leading producer of platinum and chromium and a major gold, diamond, and coal producer. Other key industrial sectors include automobile assembly, chemicals, textiles, foodstuffs, and iron and steel production. Services contribute the largest share of GDP, 69%. South Africa has large and well-developed tourism, banking, energy, legal, communications, and transport sectors. South African cell phone companies and other firms are active throughout Africa, and SABMiller, formerly South African Breweries, operates globally. The Johannesburg Stock Exchange is among the 20 largest exchanges globally, and South Africa is one of the few African upper middle income countries (defined by the World Bank as those with a per capita gross national income of $4,086-$12,615 in 2012). 

Domestically, South Africa faces a number of economic challenges. Low local savings rates mean that South African firms seeking credit must often turn to foreign sources of finance. Government deficits have increased in recent years, from an average of 0.5% of GDP from 2005 to 2008 to an average of nearly 5% of GDP from 2009 to 2012, and government net debt as a percent of GDP has grown from a low of about 23% in 2008 to over 34% in 2012. Total external debt stocks have risen steadily, from $68 billion in 2008 to nearly $114 billion in 2011. Due to population increases, real per capita GDP growth has also lagged behind national GDP growth rates. 

An inadequately educated workforce is widely seen as a key hindrance to growth. Education quality in South Africa ranks poorly in international comparisons, despite large investments in the sector. High unemployment, limited access to social services, and diverse public infrastructure investment needs are also viewed as key barriers to economic growth. According to the International Monetary Fund (IMF), distortions of demand, supply, and pricing in the labor market, together with other market imbalances, have undermined South Africa's economic production potential and helped "to preserv[e] inequality and high unemployment." Despite efforts to increase electricity generation capacity, lack of power is another serious problem.
subsections: section_title: South Africa in a Global Economic Context
paragraphs: While South Africa's international competitiveness is hindered by the internal structure and dynamics of its economy, global market trends also strongly influence South Africa's internal economic growth patterns. According to the IMF, the export sector "generates a significant amount of the wealth" in the economy and "facilitates the generation of value added in supporting industries and the provision of services." In recent years, two key external developments have posed significant economic challenges. The 2008-2009 global financial crisis reportedly contributed to a 1.5% decrease in South Africa's real GDP in 2009, although the economy largely recovered, growing to 3.6% by 2011, though it has since slowed. The second, the European economic crisis, is seen as the reason for a drop in European demand for South African products, although a general rise in exports, most notably to China and Africa, has more than made up for that decline. South African firms are also expanding their investments in Africa, particularly in banking, mining, and telecommunications. Selected recent key economic indicators are provided in Table 1 , below. Table 2 provides information on the sectoral composition of the economy and summary trade trends.

Foreign direct investment (FDI) is another indicator of South Africa's linkages with other economies. FDI flows into South Africa have been variable but generally have risen since the early 1990s, peaking at just over $9 billion in 2008, but dropping moderately in recent years. In 2012, FDI inflows decreased by 24%, dropping from $6.04 billion in 2011 to $4.57 billion in 2012, when FDI stock stood at $138.96 billion. In 2012 FDI inflows decreased by 24%, dropping from $6.04 billion in 2011 to $4.57 billion in 2012, when FDI stock stood at $138.96 billion. However, South African FDI outflows—investments abroad—also increased, from a negative $257 million in 2011 (compared to the previous year) to $4.37 billion in 2012, when South African foreign investments totaled $82.37 billion. The World Bank's annual Doing Business survey has found that South Africa is a relatively easy place to do business. Its ranking under the survey, however, has gradually declined under the Zuma Administration, from 32 nd in 2009, when President Zuma took office, to 41 st in 2012, where it remained in 2014. Key hindrances to FDI growth in recent years have reportedly included violent crime; corruption; Black Economic Empowerment regulation (see below); risks arising from political volatility in neighboring Zimbabwe; and South Africa's own racial, class, and political divisions. 

A proposed overhaul of South Africa's investment framework, the Promotion and Protection of Investment Bill of 2013, has also raised concerns for some foreign investors. With respect to FDI, it would replace the use of bilateral investment treaties (BITs) with a new investment legal framework applicable to all investors. In most cases, it would require investment disputes to be resolved by the South African legal system. For some investors, this may raise questions over matters of alleged expropriation, compensation, national treatment, and rights of establishment, in addition to questions over dispute settlement. To a large extent, the BIT aspects of the bill would not affect U.S. investors, as no U.S.-South African BIT is in force.

In recent years, South Africa has sought an increased role in world economic fora and hosted a number of major global sporting events, such as the 2010 soccer World Cup, and multilateral policy events (e.g., the 2011 U.N. Climate Change Conference and the 2002 U.N. World Summit on Sustainable Development). It is a member of the G20, and in late 2010, at the invitation of China, joined the BRIC (Brazil, Russia, India, and China), a political and economic formation of major emerging market economies. South Africa is a key trading and investment partner of China in Africa, and a key target of increased Chinese economic and diplomatic cooperation over the past decade. China became South Africa's largest trading partner in 2009.

section_title: Economic Policy Under Zuma
paragraphs: In general, the Zuma government has pursued a free-market, private sector-driven economic model underpinned by large actual or planned state investments aimed at spurring increased economic growth, productivity, and job creation. Such investments support infrastructure construction, job skills training, public works and service jobs, and selected private sector projects determined to have the potential to increase employment and enhance economic productivity. In late 2010, the Zuma Administration launched a medium-term growth strategy, the New Growth Path . Its centerpiece is an industrial policy aimed at expanding economic output, creating 5 million new jobs, and reducing unemployment from 25% to 15% by 2020. It targets large public infrastructure investments in five key areas: energy, transport, communication, water, and housing. It also funds investment and human resource development programs aimed at increasing jobs and output in the "green economy" (solar, wind, and biofuels industries); agriculture; manufacturing; tourism and other services; and mining. It calls for the creation of a state mining firm focused on value-added processing and "enhanced resource exploitation in competition with a strong private mining sector." It also calls for state fiscal discipline and emphasizes diverse roles for the private sector. Some aspects of the new strategy, including proposals to cap wages and bonuses, have met with objections from unions and from business interests, which fear that private sector pay bonus caps may deter FDI. 

Spending on such infrastructure and capital investment projects, along with institution capacity-building projects, is forecast to total about $97 billion over the next three years and $600 billion over the next decade. Increasing public expenditures are reflected in South Africa's first-ever trillion-plus Rand (about $150 billion) budget in its 2012/2013 budget year. The government has also suggested that it may expand the role of state development finance institutions in funding its agenda, although most spending is set to come from state agencies' operating capital and 30% from the open market. This agenda has left private industry unsure of its role in the government's plans and has led business interest groups to call for the creation of infrastructure-focused public-private partnerships. Critics have also questioned whether state agencies and parastatals (partially or wholly publicly owned commercial entities) are up to the job, in light of factors such as massive state project delays, cost overruns, and failures to expend funding allocated for infrastructure construction. State efforts to access financing to fund public investments could be hindered by labor unrest and corruption. In late 2012, these factors helped spur country economic risk rating downgrades or warnings (e.g., by Moody's, Standard and Poor's, and Fitch), which may make public investment financing more expensive, and potentially prompt the government to seek funding from international financial institutions or non-Western lenders, such as China. 

South Africa's public spending is creating significant market opportunities for U.S. business backed by U.S. public export financing assistance, notably the U.S. Export-Import Bank (Ex-Im). It financed several large deals in South Africa in 2011 and 2012, including two rail locomotive manufacturing deals involving GE Transportation, a U.S. firm, and South African rails parastatals. In 2011, Ex-Im approved an $805.6 million direct loan to help finance a major expansion of a large coal fired power plant run by South Africa's state electricity utility. In 2012, Ex-Im signed an agreement of intent to provide financing for South African purchases of up to $2 billion in U.S. technologies, products, and services, most related to clean energy production and South African government infrastructure construction initiatives.
subsections: section_title: Key Policies to Increase Economic Equality
paragraphs: Since 1994, successive post-apartheid governments have pursued two major efforts to increase racial economic equality. One, known as Black Economic Empowerment (BEE), seeks to promote the increased participation of blacks throughout the South African economy, a process dubbed "transformation." The other, land reform (a set of inter-related policies), seeks to increase black land ownership, among other goals.
subsections: section_title: Black Economic Empowerment
paragraphs: BEE policies primarily seek to increase access to jobs by blacks and certain other marginalized groups in all occupational categories and levels of employment, and to increase rates of ownership and management of firms and other types of productive entities by these groups. Initial BEE efforts prioritized business ownership transfers to blacks, as well as preferential black access to corporate leadership positions, leading to criticisms that BEE was creating a privileged black class rather than achieving broad black "economic empowerment." To address such criticisms, current BEE policies more heavily emphasize efforts to advance racial employment equity, and to provide job training and other skills development services to blacks and other BEE beneficiaries. 

Implementation of BEE goals is mandatory for public entities. The government promotes private sector investment in BEE goals by working with industries to set up sector-specific transformation best practice "charters" and "sector codes," but the main tool for fostering attainment of BEE goals is BEE scorecards, which assess a business's attainment of a range of benchmarks. BEE scorecards are used as eligibility criteria in public procurement, some forms of licensing, participation in public-private partnership deals and transactions (e.g., sales of state-owned assets), tax preferences, public company stock listings, and other matters of economic concern to firms. Higher scores can be attained if a firm's suppliers meet BEE goals, a measure aimed at using business demand to drive private sector adoption of BEE policies. There are some exemptions from BEE policies for small firms. For larger and more complex firms, BEE compliance is highly legalistic and is accompanied by paperwork-intensive reporting requirements. In June 2013, the government introduced a BEE amendment bill that would create a range of BEE policy implementation monitoring, oversight, and advocacy measures and mechanisms and introduce new offenses and penalties for scorecard misrepresentation.

section_title: Land Reform
paragraphs: Land distribution has historically been highly contested in South Africa; under apartheid, whites owned most of the productive land, a substantial amount of which had been initially obtained through seizure from its original non-white occupants or owners. After the transition to majority rule, most of this land remained in white hands. To address these challenges, the government initiated a series of land reform programs. One key set of programs has sought to compensate those dispossessed of land during apartheid through a mix of land restitution, financial compensation, and resettlement aid. Another has centered on efforts to achieve more racially equitable land distribution by redistributing state-owned land, some purchased from whites, to blacks and other non-white groups that had suffered apartheid-era economic discrimination. Some land transfers also involve the provision of financing, training, and farm extension services to land transfer recipients, in order to help them make their holdings economically viable and spur economic growth.

For the most part, transferred land has been bought by the state from white sellers under a constitutionally grounded, so-called "willing buyer, willing seller" principle under which mutually acceptable land sale prices are negotiated. Private sales have also contributed to a growing number of transfers. Most restitution claims have reportedly been settled, but programs to aid land transfer recipients have also come under criticism for being administratively inefficient or underfunded. Land transfers have often been burdened by complex legal proceedings, in part due to differences between land sellers and buyers over property values. As a result of the slow redistribution process, there have been periodic calls for a more active approach to state redistribution land acquisitions, potentially including forced sales or even uncompensated seizures, akin to the situation in Zimbabwe. 

For the most part, the South African government has to date resisted such proposals, opting instead to hasten sales through changes to administrative and legal procedures. At its 2012 party conference, however, the ANC resolved to pursue a new "radical" land reform program. Among other objectives, it would devote larger financial resources to existing land reform efforts; reopen the land restitutions claims process; and "expedite" enactment of a proposed Expropriation Act, a bill that could facilitate a greater number of compulsory state "public interest" purchases of land from unwilling sellers. It would do so by allowing factors other than market value (e.g., current property uses and acquisition history; relative state and private investments in the property, if any; and the intended purpose of an expropriation) to be used to define "just and equitable" pricing of transferred land. 

How such reforms might affect the pace of future land transfers is unclear, both because transfers could still be legally contested, and because bureaucratic inefficiencies may continue to hinder reform programs. The ANC is pursuing these aims via several vehicles, however. In early 2014, a bill known as the Restitution of Land Rights Amendment was passed. It re-establishes a process for lodging land rights restitution claims relating to apartheid-era land seizures. Such claims had previously been permitted until 1999; new ones will now be permitted until 2019. A state estimate projects that about 379,000 new land claims will be made under the extended deadline and cost the state R179 billion, raising questions over how new claims would be funded; the current annual budget for this purpose is reportedly about R3 billion. Under another proposed law, the Promotion and Protection of Investment Bill, owners of land expropriated by the state could potentially receive less than market value for their property and lose the right to sue for ensuing damages, and would be subject to a state-determined payment schedule. In certain cases where the state does not appropriate land, but merely acts as a custodian of it, owners might receive no compensation. The law has much broader implications, however, as such measures could be applied to a broad range of "investments," both by foreigners and South Africans.

section_title: Trade and Investment Relations and Policy Issues74
paragraphs: South Africa was the largest non-oil-focused U.S. trade partner in Africa in 2012, and the second-largest overall, after Nigeria. It is the third largest, on average, over the past decade. Bilateral trade in goods grew by over 210% over the past decade, rising from $7.7 billion in 2003, to $16.2 billion in 2012, when South Africa was the 40 th -largest source of U.S. imports and the 35 th -largest U.S. export destination. 

Top U.S. goods exports in recent years include machinery; vehicles, mostly tractors and trucks; electrical machinery; precious metals and stones, mostly gold; and aircraft, engines, and parts. Top U.S. goods imports include precious metals and stones, mostly platinum and rough diamonds; vehicles, mostly cars; iron and steel; ores, slag, and ash; and machinery. U.S. FDI in South Africa has gradually grown in recent years. U.S. FDI in South Africa in 2011 centered on manufacturing (37%), notably of chemicals (11%) and transportation equipment (6%); wholesale trade (13%); professional, scientific, and technical services (13%); and non-bank holding firms (8%). Tables 3 and 4 summarize trends in U.S.-South African trade and U.S. FDI in South Africa.

U.S.-South African trade and investment is attracting relatively high-level attention from U.S. policy makers, including Members of Congress and business leaders. This increased interest may partly reflect the Administration's growing focus on trade and investment as both a goal and a tool of foreign policy in Africa and elsewhere. U.S. private sector interest in African markets, spurred by positive economic growth and governance trends in much of the region in recent years, is also rising. Concern over competitive threats to U.S. government and business interests posed by burgeoning Chinese engagement in Africa has also fostered increased U.S. attention toward Africa.

In February 2013, a bicameral congressional delegation joined the launch in South Africa of the U.S.-South Africa Business Council, formed in late 2012 by the U.S. Chamber of Commerce (USCC). The congressional visit followed Acting Commerce Secretary Rebecca Blank's November 2012 start of the Obama Administration's Doing Business in Africa campaign and an August 2012 State Department/Chamber trade mission to South Africa. Doing Business , a whole-of-government effort, seeks to promote trade, investment, and trade financing in Africa to meet the goals of the Obama Administration's Africa strategy and its National Export Initiative, an effort to double U.S. exports by 2015. Blank was the first Commerce Secretary to visit sub-Saharan Africa in a decade. These visits followed the June 2012 signing of an amended U.S.-South African Trade and Investment Framework Agreement (see below).

The August 2012 trade mission, part of the broader U.S.-South Africa Strategic Dialogue, included a summit and other meetings between top South African and U.S. business leaders and government trade agency officials, including then-Secretary of State Clinton. In her remarks, Clinton contended that public-private partnerships can play important roles in efforts to expand trade and investment. She stated that South Africa's multi-billion dollar public infrastructure investment initiatives will "create massive new opportunities for American businesses in energy, transportation, and communications technology, which means more jobs here and more jobs back in the United States." She described several U.S. public interagency initiatives to support U.S. private sector involvement in achieving these goals. One is an Export-Import Bank project aimed at financing up to $2 billion in U.S. clean energy exports to South Africa (see " Economic Policy Under Zuma " section, above). Another is a new U.S.-South Africa Aviation Partnership. Clinton also noted that small and medium enterprises (SMEs) contribute 50% of South Africa's GDP and nearly 60% of its jobs. In recognition of such contributions, Clinton noted, the United States has established a $150 million USAID SME loan program and a separate $65 million OPIC new private equity investment fund for South African SMEs.

A proposed overhaul of South Africa's investment framework, the Promotion and Protection of Investment Bill of 2013, has also raised concerns for some foreign investors. With respect to FDI, it would replace the use of bilateral investment treaties (BITs) with a new investment legal framework applicable to all investors. In most cases, it would require investment disputes to be resolved by the South African legal system. For some investors, this may raise questions over matters of alleged expropriation, compensation, national treatment, and rights of establishment, in addition to questions over dispute settlement. To a large extent, the BIT aspects of the bill would not affect U.S. investors, as no U.S.-South African BIT is in force.

In recent years, South Africa has sought an increased role in world economic fora and hosted a number of major global sporting events, such as the 2010 soccer World Cup, and multilateral policy events (e.g., the 2011 U.N. Climate Change Conference and the 2002 U.N. World Summit on Sustainable Development). It is a member of the G20, and in late 2010, at the invitation of China, joined the BRIC (Brazil, Russia, India, and China), a political and economic formation of major emerging market economies. South Africa is a key trading and investment partner of China in Africa, and a key target of increased Chinese economic and diplomatic cooperation over the past decade. China became South Africa's largest trading partner in 2009.
subsections: section_title: Trade and Investment Agreements and Policy Tools
paragraphs: The United States and South Africa are parties to two mutual trade and economic cooperation agreements. The first, a Trade and Investment Framework Agreement (TIFA), was signed in 1999 and amended in June 2012. It established a U.S.-South Africa Council on Trade and Investment, which meets annually to discuss trade and investment-related issues with the goal of removing "impediments to trade flows." The second is the 2008 U.S.-Southern Africa Customs Union (SACU) Trade, Investment, and Development Cooperation Agreement (TIDCA). It was signed after the suspension in 2006 of talks, launched in 2003, aimed at establishing a U.S.-SACU free trade agreement (FTA). This effort foundered, in part, over the parties' differences regarding the scope of prospective trade liberalization. The United States also has a double taxation agreement with South Africa signed in 1997, the only such agreement with a sub-Saharan African country.

South Africa is also eligible, along with other African countries, for trade benefits under the U.S. African Growth and Opportunity Act (AGOA, P.L. 106-200 , Title I, as amended), but not for the AGOA Special Rule for Apparel. These benefits enable many U.S. duty-free imports of South African products, and are in addition to tariff preferences enjoyed by South Africa under the Generalized System of Preferences (GSP). The value of South African exports under AGOA fell in 2004 and 2005, but has generally grown since. Their value peaked in 2011, at $2.5 billion. In 2012, about 80% of South African exports under AGOA were automobiles. The next largest categories were iron and steel; citrus; chemicals; and wine and other alcoholic beverages. Together with autos, these items made up nearly 95% of AGOA exports. 

section_title: Bilateral Relations and U.S. Assistance
paragraphs: U.S.-South Africa bilateral relations are generally close, based on shared socioeconomic growth and development goals and mutual support for democratic values, among other factors, although there are occasional differences over foreign policy issues. South Africa often backs developing country positions that may be at odds with U.S. interests; has advocated caution with respect to proposed U.S.-backed external interventions in international crises (e.g., in Iraq and Libya); and takes stances toward Cuba and the Palestinian cause that are at odds with those of the United States. However, South Africa tends to concur with the Obama Administration regarding most African political or military crises, and on major aspects of issues such as climate change and nonproliferation. The two countries cooperate in the areas of development and defense, in addition to having close trade and investment ties. Since 2010, they have pursued an ongoing Strategic Dialogue with regard to health, education, food security, law enforcement, trade, investment, energy, and nuclear nonproliferation. 

Congressional engagement with South Africa in recent years has centered mainly on foreign aid program oversight, notably HIV/AIDS and other healthcare-related efforts, and often takes the form of leadership exchange visits and congressional travel to the country. Trade and investment ties with South Africa and Africa generally may also attract congressional attention in the 113 th Congress, as they did in the 112 th Congress. South Africa was not the main focus of any hearings or substantive resolutions or bills in the 112 th or 111 th Congresses, but several bills in the 112 th did contain key South Africa-related measures.
subsections: section_title: Bilateral Assistance
paragraphs: Since the end of apartheid, the South African government has been a leading African recipient of U.S. foreign aid, although U.S. bilateral assistance has gradually declined in recent years. U.S. aid to South Africa totaled over $542 million in FY2012 and by FY2015 will have fallen, if the Administration's request is enacted, to about $438 million (see Table 5 ). Despite progressive decreases in overall funding, the proportion of aid directed toward State Department and U.S. Agency for International Development (USAID) Global Health Program (GHP) efforts, primarily to counter HIV/AIDS under the U.S. President's Emergency Plan for AIDS Relief (PEPFAR), has remained steady. An average of nearly 96% of actual or requested aid between FY2012 and FY2014 has supported such ends. The total amount of such aid in the past decade-plus has been substantial; according to USAID, between FY2004 and FY2011, the United States provided $3.23 billion in assistance to South Africa under PEPFAR. 

According to the State Department's FY2015 Congressional Budget Request for Foreign Operations (CBJ), GHP aid would support efforts to "achieve major improvements in health outcomes in three key areas: ending preventable child and maternal deaths, creating an AIDS-free generation, and protecting communities from other infectious diseases." Much of this aid focuses on HIV/AIDS programming under a 2012, five-year bilateral health cooperation agreement, signed in 2012, that "provides a strategic agenda in collaboration with GoSA's [Government of South Africa] and other stakeholders to scale-up and sustain key components of HIV/AIDS programming in support of GoSA's national HIV/AIDS response."

Apart from HIV/AIDS and other health-related aid, under its State Department FY2015 Congressional Budget Justification (CBJ) for South Africa, the Obama Administration plans to support Development Assistance programs focusing on:

Education, focusing on primary school teacher and management capacity-building. Democracy, governance and human rights proigrams, centered on expanding "accountable, transparent, and responsive governance in South Africa, improving public services, public integrity, effective management of public resources and safer communities"; access to sexual and gender-based violence justice; and South African "development assistance leadership on the continent." Economic growth, consisting of aid supporting "socio-economic impact assessments will be conducted on proposed legislation" to support "a stronger enabling environment for equity, employment, and growth"; and help for "private-sector led initiatives" focusing on education and youth employment. Global Climate Change (GCC) Initiative aid centering on achieving the goals of the U.S. Enhancing Capacity for Low Emission Development Strategies (EC-LEDS) program in South Africa. Application of "South Africa's commercial agribusiness sector, agricultural research institutions and universities to catalyze food security and nutrition advances" in other African Feed the Future (FTF) focus countries under a FTF Strategic Partnership. Assistance to help South Africa establish a new South African Development Partnership Agency (SADPA) focused on fostering development in Africa in areas related to "key U.S. foreign policy priorities in Africa, including climate change, democracy, and food security."

Peace and security assistance and cooperation is diverse. One component of such aid is International Military Education and Training (IMET) programs, a key focus of U.S. military cooperation. IMET programs center on specialized officer training to enhance the readiness of the South African National Defense Forces (SANDF) to respond to regional conflict and participate in peacekeeping operations. The U.S. Department of Defense (DOD) views the SANDF as a basically operationally capable entity, despite recent criticisms focused on its performance in the Central African Republic. In CAR a South African intervention in support of the government of former president François Bozizé resulted in over half a dozen SANDF deaths and a South African withdrawal. Health and C-130 aircraft technical training are other IMET foci. Foreign Military Financing (FMF) aid supports technical support, equipment, and training for the SANDF's U.S.-sourced C-130s. International Narcotics Control and Law Enforcement (INCLE) account-funded programs support a new Narcotics and Law Enforcement Affairs (NLEA) embassy post and local law enforcement capacity training focused on policing tactics and various types of skills training. 

Nonproliferation, Antiterrorism, Demining and Related Programs (NADR) funds are used to support a multi-year initiative to improve South Africa's border control capacity and improve weapons of mass destruction (WMD) nonproliferation border security. According to the FY2015 CBJ, such programs are slated to center on "detection, identification, inspection, interdiction, and prosecution of illicit transfers of WMD and WMD-related items and technologies" and strengthening of South African "licensing implementation and government-to-industry outreach capabilities." A small number of South African officers receive DOD Combating Terrorism Fellowship Program training. The DOD humanitarian assistance program undertakes small school construction projects; carries out a military HIV/AIDS Program under PEPFAR; and sponsors medical and engineering civic action field program exercises. 

Since 2005, South Africa has received peacekeeping training under the U.S. Africa Contingency Operations Training and Assistance program (ACOTA). The SANDF also participates with the U.S. forces in multiple annual cooperative bilateral and regional military training exercises. These focus mainly on maritime and border security, peacekeeping training, and military humanitarian/civic action. In 2005, South Africa and the New York National Guard (NG) formed the first U.S. NG State Partnership Program (SPP) partnership in Africa, which focuses on mutually beneficial capacity-building programs. DOD also regularly supports South Africa's biennial African Aerospace Defense Exhibition. The major forum for U.S.-South African security cooperation coordination is the U.S.-South Africa Defense Committee (DEFCOM), formed in 1997. The Pentagon hosted an annual DEFCOM meeting in September 2012.

section_title: Outlook
paragraphs: South Africa appears likely to remain politically stable for the foreseeable future. Still, dissatisfaction among miners, unemployed youth, township residents, and others concerned with government performance, crime, and corruption could lead to localized volatility and unrest. Such discontent could also translate into weakened political support for the ANC and political opportunities for opposition parties. The 2014 elections will serve as a test of the ANC's political dominance and the relative depth of the challenges it faces, and gauge public support for the ANC's wide-ranging policy agenda and state-led economic and political vision for the country. 

Despite significant challenges, South Africa's economy is large and diversified, and appears to have the capacity to expand moderately in the coming years. The IMF projects a slight uptick in real growth in 2013, to 2.8%, and then to 4.1% in 2014. Given South Africa's economic linkages to and investment in sub-Saharan Africa, South Africa may also benefit as other African economies continue to expand. Trade with the United States is likely to grow. South Africa is making a range of large-scale public infrastructure investments, which could help boost economic growth. Such spending could, however, gradually become a burden on the state, which is facing revenue limitations and must balance infrastructure spending goals with a need to finance education, healthcare, and other social services.

South Africa may gradually increase as a U.S. investment and export destination, due to South African demand and regional economic growth; increasing U.S. government and private sector efforts to expand trade and investment ties; and opportunities created by South Africa's infrastructure investment initiatives. U.S.-South African ties are growing closer in other areas as well; under the two countries' Strategic Partnership, there have been an increasing number of high-level exchanges and visits. Over the medium term, one question for policy makers will be how, if at all, the nature and level of relatively large levels of U.S. aid in the healthcare sector—specifically to counter HIV/AIDS—should change, in light of shared U.S. and South African government plans to transition to a situation in which South Africa funds most of its own HIV/AIDS programs. 


Question-summary annotations: questions: question: What led to South Africa holding its first universal suffrage elections in 1994?
answer: It held its first universal suffrage elections in 1994, after a transition from white minority rule under apartheid, a system of state-enforced racial segregation and socioeconomic discrimination.

question: Why is Nelson Mandela famous in South Africa?
answer: South Africa entered a period of mourning in late 2013, upon the death of its first post-apartheid president, Nelson Mandela. He is viewed as the founding father of the country's nonracial democratic system, the 20th anniversary of which was recently celebrated prior to national elections on May 7.

question: Why is South Africa influential regionally?
answer: South Africa is influential regionally, due to its political, trade, and investment ties across Africa and its active role within the African Union. It is viewed as a U.S. strategic partner in Africa, despite periodic foreign policy differences.
child_questions: question: How has the U.S. worked with South Africa to solve foreign policy differences?
answer: In mid-2013, President Obama traveled to South Africa, among other African countries.
child_questions: question: What issues were addressed during his visit?
answer: Key issues addressed in South Africa included bilateral political and trade and investment ties, development cooperation, and shared U.S.-South African aims regarding similar issues across Africa, as well as democracy, youth leadership development, and peace and security.

questions: question: How has Congress been involved with South African politics?
answer: Congress has long been engaged with South Africa, notably during the anti-apartheid struggle, and with regard to post-apartheid socioeconomic development efforts, a key focus of bilateral ties.
child_questions: question: What other bilateral efforts have U.S. policy makers been focused on in relation to South Africa?
answer: U.S. policy makers are also increasingly focused on efforts to strengthen already growing U.S.-South African trade and investment ties. Other key areas of bilateral engagement include security cooperation and an ongoing U.S.-South African Strategic Dialogue.
child_questions: question: What is the U.S.-South African Strategic Dialogue?
answer: Established in 2010, the Dialogue centers on health, education, food security, law enforcement, trade, investment, and energy, among other issues.

question: Why has South Africa received so much U.S. foreign aid?
answer: Since 1992, South Africa has been a leading recipient of U.S. foreign aid, mostly devoted to addressing HIV/AIDS and other health challenges.
child_questions: question: How has U.S. aid to South Africa received notice recently?
answer: Aid oversight has drawn the bulk of South Africa-related congressional attention in recent years.

questions: question: How does South Africa compare to its neighboring countries?
answer: South Africa has the largest, most diversified, and highly industrialized economy in Africa.
child_questions: question: What successes has South Africa enjoyed in recent years?
answer: It has enjoyed moderate economic growth in most recent years. Average per capita incomes and access to education have grown across racial groups, notably for blacks.

question: What is the racial equality situation like in South Africa?
answer: Despite post-apartheid national socioeconomic gains, South Africa remains a highly unequal society with respect to wealth and income distribution and access to jobs, social services, utilities, and land.
child_questions: question: How are Blacks disadvantaged in South Africa?
answer: Most blacks are poor, and average black incomes are far smaller than those of the historically privileged white minority. Blacks also suffer very high unemployment rates (36% in 2011), and have far less access to education.

question: What other problems spur ongoing tensions in South Africa?
answer: Other key problems include public corruption and widespread violent crime. Vigilante justice and mob violence is not uncommon, and heavy-handed police tactics sometimes result in human rights abuses. South Africa also suffers high rates of HIV/AIDS.

questions: question: What did the ANC party do in late 2012?
answer: In late 2012, the governing African National Congress (ANC) party, despite some reported internal divisions, reelected as its president Jacob Zuma, ahead of the May 2014 national elections.

question: What challenges does the ANC government face?
answer: The ANC government faces the substantial challenges noted above, along with others, including labor unrest, rising dissatisfaction within key labor constituencies, and dissatisfaction among youths.
child_questions: question: Why are youths dissatisfied with the ANC?
answer: Youth populations face particularly high jobless rates and may lack older generations' continuing allegiance and gratitude to the ANC for helping to end apartheid.

question: How is the government trying to address these challenges?
answer: To address these diverse challenges, all of which are electoral issues, the government is investing billions of dollars to upgrade infrastructure and improve public service delivery, but is likely to face continuing challenges in meeting popular expectations.