South Africa: Multinational Corporations

Topics: Investment, Foreign direct investment, South Africa Pages: 7 (2071 words) Published: October 3, 2008
South Africa: Multinational Corporations

What do we know about South Africa and the effects that multinational

corporations have on the economy, culture and people of this diverse country?
The next few pages will provide the information that will fully answer the

above question.

Multinational corporations have funneled foreign direct investments into

South Africa due to the diverseness and rich resources that has made South

Africa very desirable. Unfortunately, there have also been many economic and political entanglements that have influenced, and in some cases, stalled the influx of foreign direct investment. Facing this economic reality, South Africa has had to make significant improvements in order to foster an environment that would attract investors.

South Africa is at the southern tip of the continent of Africa. The terrain of South Africa can vary from farmland to tall mountain ranges. What is not obvious is that underneath those mountain ranges are vast amounts of crystalline rock formations. This is an invaluable resource, because this allows South Africa to be the world’s largest producer of gold. It is also instrumental in allowing this country to be a top exporter of coal, diamonds and platinum. South Africa also has a very diverse population that is made up of many different races and ethnic groups. Although for most countries this is desirable, South Africa has suffered due to its diversity in many various ways.

The population of South Africa is 24 million and it is composed of multiracial and multiethnic people of all walks of life. Three quarters of the population is black and they represent various tribes as the Zulu, Xhosa, Sotho, and Tswana. The remainder is Caucasian, Indian, Asian and mixed race. There is an obvious racial distortion when looking at where the population lives. Blacks live in shantytowns located outside of the city limits. Whites, Asians and other races live in the city limits. Racism is obvious by the living conditions of the minorities in this country and has become a way of life.

South Africa’s government goes back to 1910; this is when the Union of South Africa was formed. Congress was the actual decision maker even though there was a monarch on the throne. South Africa and other British Commonwealths were given their freedom from Britain and became a republic in 1961. Once the new republic was established so was a democratic government that consisted of a president and a three-house parliament. But unfortunately, there was no minority representation in the newly established government. This set a precedent that encouraged discrimination and the upcoming apartheid.

Apartheid is the name given to the system of segregation that was instituted by the government against the minorities of South Africa. Segregation was evident in all aspects of South African life such as employment, education and where the segregated were allowed to live and who they were allowed to marry. The minority population was forced to work low wage jobs and was not allowed to attain higher education. This was also mirrored in the nonparticipation of minorities in government and in cultural affairs.

The South African government defended apartheid by holding itself up as a model society. Their belief was that the races should be separated in order for the society to work and that minorities should be oppressed in order to keep control within the country. This ideology continued even though the majority of the population was against it. Uprisings began in protest of apartheid through boycotts, demonstrations and strikes. Violence became the norm and many lives were lost. This became a daily visual on the news that was broadcasted internationally. Therefore, many countries decided to impose sanctions and tariffs on South Africa. This in turn isolated South Africa from the rest of the world community.

In 1962, the United Nations General Assembly urged its members to...
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