An analysis into South Africa’s immigration policy and xenophobic attacks

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Xenophobic attacks were commonplace in South Africa during Apartheid. Contrary to expectations, there has been a significant increase in the incidences of violence against foreigners after the democratic dispensation and market liberalization post 1994. Deep diving into these numbers shows a worrying sign of violence against foreign nationals from other African countries. These include immigrants from Mozambique, Nigeria and Zimbabwe amongst others. This has led to a heated debate within the country around South Africa’s immigration policy that included contrasting views by labour unions, ordinary citizens and the owners of capital respectively. This article will start by providing the reader with a historical analysis detailing the immigration trends in South Africa. Thereafter this article will proceed by applying economic and international politics theory to the facts in order to understand the impact of immigration on xenophobic attacks in South Africa. More specifically, it will assess how, after 1994, the country transitioned towards market liberalization and subsequently restricted immigration practices. This will be done by applying theoretical frameworks to the country’s immigration policy in order emphasizes the distributional impacts of immigration policies on the various interest groups in lieu of trade liberalization. Finally, this article will conclude by predicting the likely future of immigration policy in the country given these interest groups.

Historically, South Africa has been a country of net immigration for hundreds of years (see figure 1 below).
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Initially, the first immigrants included Dutch, German, French and Portuguese nationals that settled in the country during the 17th and 18th centuries. This was coupled with an inflow of low-skilled African labour that was allowed into the country with the principal aim of providing cheap inputs into the mining sector. Included in the mining sector’s pool of low-skilled workers were black South Africans that were confined to concentrated, under-resourced townships, on the outskirts of the cities but within close proximity to the mines. The Apartheid government was successful in continuing to attract many foreign skilled workers before 1994. This trend changed just before and continued after the era of democracy. This ‘brain drain’ has been attributed to socio economic and political factors that include crime and government inefficiencies relating to education, health care and restrictive immigration policies respectively. Conversely, the country experienced a continued increase in low-skilled immigrants from neighbouring countries such as Mozambique and Zimbabwe, amongst others (see figure 2 below).

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South Africa is an attractive destination for these immigrants as it provides them with relatively good infrastructure, economic opportunities and a stable democratic regime. This explanation cannot be disentangled from the high levels of political unrest, economic instability and environmental degradation in these African countries.

Given the historical context and trends regarding immigration in South Africa, it is important to apply theoretical frameworks to provide a starting point in understanding the government’s current policies. More specifically, international politics and economic theory hypothesize that trade and immigration policies are substitutes. The underlying reasoning for this trade off is based of the impact of trade on the various interest groups within an economy. That is, a consequence of open trade under a classic trade model is the reduction in the price of the goods that involve low-skilled input, intensive firms. When these firms become uncompetitive, they close down. An implication of which is that the aforementioned interest groups can no longer pressure policymakers for open immigration to attract additional low skilled-labour as cheap inputs in order to remain competitive. Moreover, this framework assumes that the displaced low-skill labour will become available for employment in the service and export sectors that can compete. These service sectors are then less likely to pressure policymakers for open immigration because they benefit from the aforementioned increase in domestic labour supply and decreased wages in their sector. These firms however, have a relatively limited amount of political capital to expend and they may want to spend it on efficiency improvements for example, given that wages for low-skill labor have already decreased. In addition to this, it may not be possible to lower wages even further due to minimum wage policies. A result of this is that theory predicts, that policymakers are likely to restrict immigration to appease their constituencies such as labour unions, nationalists and taxpayers respectively. A complementary theory suggests that migrants will further choose locations where wages are high relative to the opportunity costs of relocating. This implies that states that are relatively wealthy in comparison to their neighbors are likely to attract migrants from their neighbors but not from countries further away due to higher costs.

Given this theoretical framework, the logical next step now would be to apply this theory to the case of South Africa’s trade and immigration policies. Under the Apartheid regime before 1994, South Africa was isolated from the world economy, due to trade embargos that related to the country’s human rights violations. Thereafter, the subsequent democratic dispensation, post 1994, led to the adoption of policies that promoted domestic and capital market liberalization. Soon thereafter, the democratic government amended the 1991 Aliens Control act and further legislated the new Immigration Act in 2004. These amendments provided very little opportunity or access for both high and low skilled migrants to enter and work legally in the country. Applying the theoretical framework to the overarching facts regarding South Africa proves the theory to be correct in predicting that as the country began to liberalize it markets, its policymakers also began implementing restrictive immigration policies. Moreover, the aforementioned theory is correct in predicting that the increase in immigrants coming from neighbouring African countries with lower income rates would be attracted to a South African economy as indicated in figure 2. That said however, the theory’s use of the classical model and its assumptions regarding the demand for low skilled labour does not apply to the South African situation. That is, the economic effects of market liberalization resulted in a steady decrease in manufacturing and mining as a source of the country’s GDP and low skilled employment base. Essentially, market liberalization helped create a highly competitive and sophisticated financial and services sector that demanded high skilled labour. Given this, one can infer that these low skilled labourers were unable to transition towards to export industries, the reasons of which fall beyond the ambit of this article. That said, the aforementioned point is made clear when analyzing South Africa’s high unemployment rate of 27%. This figure consists largely of highly concentrated, unskilled and disenfranchised black labourers. A direct implication of this is that theory is insufficient in predicting the contrasting incentives of the labour unions, vis–à–vis, the export industries and owners of capital, regarding immigration policies. Taking this a step further, it is incomplete in helping us understand the recent increase in xenophobic attacks on African nationals within the country’s townships.

Isolating our analysis to interest groups exclusively, it is clear that the restrictive immigration laws would lead to contrasting views from owners of capital, labour unions and unemployed nationals regarding immigration policy in South Africa. Labour unions are representative of the country’s demographic (mostly black workers) in South Africa represent the largest voting bloc for the government. It is clear that in a country with an abundance of semi skilled and unskilled labour, these unions would be averse to promoting increased migration in order to protect their constituencies and their incomes. One only needs to read the ruling parties policy documents and public statements in order to understand the bargaining power that labour unions possess over government. Conversely and contradictory to theory’ the owners of capital contribute a significant portion of the country’s fiscus and balance of payments. Against theory’s predictions, this interest group has continuously denounced the spate of xenophobic as it decreases confidence in the implications of such on political stability and their returns on investment. That said they advocate for a more expansive and robust immigration policy approach towards high skilled labour exclusively. This they argue will ensure their global competitiveness and the continued growth of the economy, their returns and their continued contribution to the tax base. Finally, the costs of increased technological progress, international trade and immigration of African workers has led to a dramatic increase in xenophobia by unemployed South Africans. As previously stated, black South Africans represent the largest share of unemployed persons within the country. This constituency has historically been concentrated within the townships that are on the outskirts of the cities. These citizens reside in settlements that have little access to the formal economy and have become increasingly frustrated with the status quo of poverty and unemployment. They have subsequently argued that immigrants are involved in illegal activities in the informal economy such as drugs and prostitution and take the locals’ jobs. Put another way, they have used this as a proxy with which to pin the grim underlying economic conditions on. Their call for increased immigration restrictions based on the following arguments may not be completely unfounded according to empirical research by Fauvelle-Aymar (2015). This research, applied to South Africa suggests that the presence of immigrants has generated a double movement of increased unemployment and informal activities for locals. Moreover, it highlights the fact that more immigrants, ceteris paribus, are involved in informal activities relative to nationals.

One could credibly argue that the nature of informal activities may actually contribute significantly to the positive wellbeing of nationals. The definition of what those informal activities were too broadly defined in the aforementioned analysis. Moreover, the explanations given by those disenfranchised South Africans engaging in xenophobic acts are too loose to accurately make an assertion on this issue. What can be said however, is that there are deep-rooted issues with regards to South Africa immigration policy. The government is in a precarious position in that it needs to drastically ensure that it promotes economic growth by assisting its competitive industries through a more flexible approach to high skilled labour. The owners of capital contribute significantly towards the tax revenues of the state. Notwithstanding, the government further needs to act, given the concern of its citizens and largest voting bloc. That is, it is highly likely that the government will continue to adopt rigorous vetting and controls for low skilled labour. Subsequently, given the clear lack of high skilled labour in South Africa and the power of the owners of capital, it is likely that there will be further amendments towards improving the amount high skilled immigrants looking to enter the country.

In conclusion, this article used international and economic theory and the interest groups framework in order to understand continuous lobbying by labour unions and unemployed citizens in order to increase already restricted immigration practices. Moreover, it provides us with a framework for understanding why the owners of capital have propagated almost exclusively, for a more flexible policy with regards to high skilled labour but not low skilled labour. An implication of such, would lead us to predict that the affected interest groups would continue lobby for a more rigid policy for low skilled immigrants using xenophobia as a proxy during negotiations. Moreover, the powerful owners of capital would lobby for more flexible and accommodating towards high skilled labour but continue to denounce xenophobia without necessarily expending resources on lobbying for rigid low skilled immigration policies. This may indeed be a compromise amongst the interest groups mentioned in the article and is likely to be the policy formation that we would see going forward.

About the Author

Carlos Baeta
Proudly South African. Masters student at Fordham University in New York. Entrepreneur, young leader, coffee addict and an avid Liverpool fan. Let's change the world.

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