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CONTENTS:

NEWS HIGHLIGHTS OF THE WEEK:

1. World
2. Africa
3. Americas
4. Asia Pacific
5. Europe
6. Middle East
7. South Asia
8. Cyberterrorism and Information Warfare
9. Finance
10 Human Rights
11. Law and Legal Issues
12. Transportation
13. Weapons of Mass Destruction
14. Recently Published

FEATURE ARTICLE:
South Africa: Past, Present and Future, Part III

NEWS HIGHLIGHTS OF THE WEEK

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1. World

The European Union is now the largest trading block in the world, as the 15 existing members welcome ten new countries.

An international investigation into openness, accountability and governance in 25 representative democracies, the Center for Public Integrity found no country ranked in the top "very strong" rating on the Public Integrity Index. They found that all countries studied are susceptible to abuses of power due to lack of transparency, lack of accountability, or having no disclosure requirements or limits on money flowing into the political system.
http://www.publicintegrity.org/ga/report.aspx?aid=246&sid=100

The UN Commission on Sustainable Development ended its 12th session with an acknowledgement that the Millennium Development Goals are not on track and that efforts to achieve safe drinking water, basic sanitation and shelter for the poor by 2015 must be accelerated.

The latest outbreak of Severe Acute Respiratory Syndrome (SARS) that began with a lab-worker's infection has risen to six cases. The laboratory is closed for investigations, hundreds of people quarantined, and screening at airports and railways in place. It has led to calls for more powerful tools to fight emerging diseases, the spread of animal diseases to humans, and concerns over lab safety.

North Korea has agreed to participate in mid-level talks in Beijing starting May 12. They have said that even this step requires a reward. Meanwhile, the estimated number of weapons has risen from possibly two to as many as eight.

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2. Africa

Democratic Republic of Congo government troops killed 39 Rwandan Interahamwe Hutu rebels in an operation in two eastern towns. In addition, three soldiers were killed and eight rebels captured.

Equatorial Guinea and Zimbabwe are working on the extradition of 70 alleged mercenaries held in Zimbabwe but linked to a suspected coup plot in Equatorial Guinea. Zimbabwe has changed its extradition policy to make it possible to try the accused in Equatorial Guinea.

In Nigeria, fighting between Muslim Fulani cattle herders and Christian Tarok farmers in the Plateau and Taraba states have forced more than 5,000 people to flee, while more than 100 have been killed and 1,000 wounded.

Rwanda has released 4,225 prisoners who completed a rehabilitation course.

South Africans celebrated Freedom Day on April 27. This year marked the tenth anniversary of multiracial democracy. Following the parties and swearing in of President Mbeki's second term, concern over ANC party dominance was renewed when the leader of the mainly Zulu Inkatha Freedom party was dismissed, leading to the IFP withdrawing from the cabinet. Ironically, the controversial health minister, who suggested traditional folk remedies for HIV/AIDS infections, was re-appointed.

In Sudan, a UN team investigated Arab militias' ethnic cleansing campaign against the black African population and confirmed the massive humanitarian crisis across Darfur and extending into Chad. Chadian troops have clashed with the Sudanese Army during a cross-border raid by Arab militiamen from Sudan.

Ugandan self-declared priestess and leader of the group that later formed the Lord's Resistance Army (LRA), Alice Lakwena, is in discussions with the Amnesty Commission about her possible return home from Kenya, where she fled after her rebellion was defeated.

Western Sahara's long-running dispute between Morocco and Polisario Front rebels was a topic for the UN Security Council last week. The council renewed the peacekeeping mission for another six months and has urged both groups to adopt a UN plan for self-government followed by a referendum on independence. Morocco opposes the plan.

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3. Americas

Canada published "Securing An Open Society", the national security policy. It offers a strategic framework and action plan addressing three core interests to protect Canada and Canadians at home and abroad, ensure it is not a base for threats to allies, and to contribute to international security. http://www.pm.gc.ca/eng/news.asp?id=188

Colombian paramilitary United Self-Defense Forces of Colombia (AUC) leader Carlos Castano, who had been missing, is now reported abducted and strangled to death by his rivals who opposed demobilization or peace agreements that could threaten their lucrative drugs trading.

In Brazil, some 4,000 troops have been sent in to patrol shantytowns and slums in Rio de Janeiro to end drug gang violence.

A UN peacekeeping force for Haiti has been approved. The 8,000 troops and police will take over from a US-led contingent beginning June 1.

Mexican rebels of the Zapatista have returned to Chiapas in the hundreds after clashes with local Indians two weeks ago that led to shutting off water service.

Peru has offered a $50,000 reward for the capture of senior Shining Path leader Artemio.
http://www.mininter.gob.pe/article/articleview/1752/1/1/

In Ilave, Peru, the mayor was dragged from his home and killed by a mob demanding his resignation.

US President Bush is defending his claim of the end of major combat in Iraq a year ago, praising the removal of Saddam Hussein. Meanwhile, the furor over images of US soldiers abusing Iraqi prisoners has led to international rage. That joined with the rising casualty rates has increased concern over the fate of the entire endeavor. Earlier in the week, President Bush and Vice President Cheney spoke with members of the 9/11 Commission in a private, unrecorded session.

The US State Department has published Patterns of Global Terrorism 2003. http://www.state.gov/s/ct/rls/pgtrpt/2003/
Names of some of the detainees at the US naval base in Guantanamo Bay, Cuba have been compiled and published by the Washington Post.
http://www.washingtonpost.com/wp-srv/nation/guantanamo_names.html

In New York, the developer of the World Trade Center lost his bid to treat the September 11 attacks as two attacks. A jury determined it was only one attack, thereby reducing the amount of insurance and in turn significantly reducing the money available for rebuilding.

Venezuela's parliament increased the number of Supreme Court judges from 20 to 32, allowing President Chavez to appoint sympathetic judges that could allow him to dominate the judiciary, at a time the Court is evaluating opposition efforts for a referendum on his presidency.

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4. Asia Pacific

Chinese warships sailed into Hong Kong to mark the 55th anniversary of the Chinese army and send a signal to pro-independence groups in Hong Kong and Taiwan. China has ruled out universal suffrage for Hong Kong in its next elections but says it is still the ultimate aim.

Indonesian militant Muslim cleric Abu Bakar Ba'asyir was rearrested on terrorism charges after charges of immigration violations and treason were dismissed. His arrest led to violent protests by his supporters.

In the city of Ambon, in Indonesia's Moluccan Islands, violence between Muslims and Christians that began last weekend lasted for four days, killing 36 and injuring 156. The UN evacuated their staff and about a thousand paramilitary police and troops were sent in but failed to contain the violence. The security forces are accused of standing by without taking action to protect the men, women and children under attack.

Malaysia has further increased security along the northern frontier with Thailand following the upsurge in violence in Thailand.

Philippine authorities confirmed there is a new terrorist group called the Yellow-Red Overseas Organization, based in South Korea. Details of the organization are not yet known, but they are connected with a series of threatening letters sent to various potential targets associated with Australia, the Philippines, Japan, Kuwait, Pakistan, Singapore, South Korea and Thailand.

Thai police fought a group of mostly teenagers armed with machetes that launched simultaneous attacks on several police stations and security posts. For several hours police fired tear gas and rocket-propelled grenades, killing 107 militants, and five security officers. This is the bloodiest incident in modern Thai history and included an attack against the historic Kru Se mosque in which all 34 people who had fled there were killed. The attacks were attributed variously to local gangs and Islamic militants. The violence led groups, including the Pattani United Liberation Organization and other militants operating in the mainly Muslim south, to protest the violence. Investigations into possible excessive use of force have been requested but Prime Minister Shinawatra has rejected international criticism.

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5. Europe

The 15 old members of the European Union have welcomed ten new countries: Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia. The new EU has added 74 million people for a total of 455 million; added 738,573 square kilometers of territory to bring the total to 4 million, and increased GDP by 444 billion Euros, raising total GDP to 9,613 billion.

May Day celebrations across Europe were largely peaceful, but anti-capitalist demonstrators amassed in Dublin where EU ceremonies marking the enlargement were held.

Northern Cyprus, with a mostly Turkish population, has been rewarded by the EU for it's pro-reunification vote with a lifting of a 30-year-old trade embargo.

In Georgia's rebellious Ajara region, two bridges linking it to Georgia were blown apart in what Ajarian leader Aslan Abashidze called an act of self-defense. President Saakashvili gave an ultimatum to Ajara to disarm and comply with the Georgian constitution within ten days.

An Italian court has acquitted nine Moroccans accused of planning to poison the water supply to the US embassy in Rome in February 202. They acquitted three Egyptians accused of trying to set up a terror cell in a mosque, planning attacks against an airport and a US war cemetery.

A Macedonian police spokesman says that the seven alleged Pakistani militants killed in March 2002 were actually shot in a staged murder to demonstrate to the international community that they were serious about participating in the "war on terror". The men were actually illegal immigrants.

British intelligence agency MI5 has provided online advice to help individuals and businesses combat the terrorist threat. http://www.mi5.gov.uk

Northern Ireland police have issued an alert to shops to be aware of firebombs left on the premises. The warning follows the discovery of a bomb-making operation, for which the Real IRA is suspected.

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6. Middle East

In Gaza, an explosives-packed jeep blew up killing the driver and injuring four Israeli soldiers near a Jewish settlement. Two Palestinian gunmen attacked an Israeli settlement, opening fire and detonating a bomb. Both were killed as well as a pregnant mother of four and her children.

In Iraq a year after US President Bush declared "mission accomplished" the invading forces face disgraceful charges of sexual abuse and torture of prisoners; an allied force death toll that exceeds the number killed in taking control of the country; and no plan for security or democratization yet in place. Amnesty International report on torture: http://web.amnesty.org/library/index/engmde140172004 Chronology: http://www.guardian.co.uk/Iraq/page/0,12438,1151021,00.html

Israeli members of the governing Likud party voted on Prime Minister Sharon's plan to pull out of Gaza. Exit polls indicate the plan has been rejected, but Sharon indicated that the results would not be binding.

Jordanian television broadcast a confession by a detained militant who was linked to a chemical attack and al Qaeda. However, al Qaeda has denied planning any chemical attack.

Al Qaeda also denied responsibility for a suicide car bomb attack in Riyadh, Saudi Arabia last week but warned of fierce attacks against the US and other western targets. In Saudi Arabia, a gunfire attack against an oil company killed six people, including westerners, and injured some 18 people. Saudi authorities have pledged to eliminate terrorism from the kingdom.

Syrian security forces clashed with alleged terrorists who stet off an explosive device at a UN office in Damascus. There were 3-5 explosions and gunfire in several locations. Two attackers, a police officer and a civilian were killed. This is the first such violence since an Islamic insurgency in the 1980s was suppressed. Syrian authorities attributed to attacks to al Qaeda associates, but more than a dozen groups have been considered in this regard, including local Kurds, the Muslim Brotherhood, and Israel.

In the West Bank, as Israeli Defense Forces raided the Tulkarm refugee camp, two Palestinian militants were killed. A third, 14-year-old boy was killed in s separate incident. The Al Aqsa Martyrs' Brigades killed one Israeli border policeman in revenge for the death of Abdel Aziz al-Rantissi. In an IDF raid, a Palestinian woman died of a heart attack after soldiers threw a tear gas canister into her house and 123 people were injured. In another incident, a Palestinian militant from the al Aqsa Martyr's Brigades was shot dead by an IDF sniper after he opened fire.

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7. South Asia

Afghan President Karzai blamed terrorist elements for the poisoning of three schoolgirls, apparently because they were opposed to female education. The girls were in critical condition but are recovering and a woman has been arrested in connection with the incident. Other incidents this week include the murder of two local aid workers and a soldier, a Taliban attack that killed five Afghan soldiers, and a roadside bomb attack against a UN convoy that resulted in the temporary suspension of operations. Afghanistan also witnessed its first sentence of capital punishment, with the execution for murder for former military commander Abdullah Shah.

Bangladesh opposition Awami League has been staging a general strike. As it began, at least seven improvised explosives were detonated near government officials and state-run television offices, but there were no casualties. In the next few days of the strike sporadic violence resulted in dozens of injuries. There have been more than 7,000 arrests.

India's Anti-Smoking Act, passed last year, has come into force. It prohibits smoking in public, direct and indirect advertising of tobacco products, and sale of cigarettes to children.

Indian communist groups the Maoist Communist Center and the People's War Group and two Sikh organizations, Babbar Khalsa International and the International Sikh Youth Federation, have been added to the US State Department list of terrorist organizations.

In Indian-occupied Kashmir, a grenade attack killed three and injured 59. Two other attacks injured 26. The attacks occurred during election events.

Nepal's Maoist rebels have freed more than 40 policeman who were captured earlier in April. The government freed 29 opposition leaders and members who were arrested during anti-monarchy demonstrations earlier in April.

Sri Lanka has welcomed the arrival of Norwegian envoys that plan to restart peace talks between the government and Tamil Tiger separatists. This follows a riot between Tamils and Sinhalese in which two people die and a gun battle in Tamil areas of the east that killed seven rebels.

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8. Cyberterrorism and Information Warfare

The British Department of Trade and Industry reports that 74 percent of all businesses and 94 percent of large companies had an information security incident in the last year, double the rate of the previous survey, at an average cost to large companies of GBP120,000 per incident.

Both the Internet Storm Center and Symantec report automated attacks on computers leveraging previous attacks against Microsoft Internet Information Servers that have not been patched.

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9. Finance

The US Treasury issued a request for comments regarding the Terrorism Risk Insurance Act (TRIA) to determine whether to extend it into the third year, through the end of 2005 and announced a proposed regulation to implement its litigation management provisions. http://www.treasury.gov/trip http://www.treas.gov/press/releases/js1496.htm TRIP was also the subject of two General Accounting Office reports describing the implementation and effects of the Act.
http://www.gao.gov/cgi-bin/getrpt?GAO-04-307
http://www.gao.gov/cgi-bin/getrpt?GAO-04-720T

The International Monetary Fund issued a report on "South Africa: Report on the Observance of Standards and Codes -- FATF Recommendations for Anti-Money Laundering and Combating the Financing of Terrorism", summarizing the level of observance and providing recommendations to strengthen it. http://www.imf.org/external/pubs/cat/longres.cfm?sk=17365.0

While investigations continue Riggs Bank has made a statement describing their cooperation with regulators and various compliance measures. http://www.riggsbank.com/Discover_Riggs/statement.html

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10. Human Rights

The Organization for Security and Cooperation in Europe (OSCE) held its second conference on anti-semitism, ending with the "Berlin Declaration" that laid out concrete measures to combat it. http://www.osce.org/news/show_news.php?ut=2&id=4037

Connected with the expansion of the EU, they have adopted a new law on asylum seekers, the Asylum Procedures Directive that regulates how asylum claims are made in all states. The UN High Commission for Refugees has expressed concern that this directive has no binding commitment to satisfactory procedural standards and could allow States to adopt or continue worst practices in determining claims.
http://www.unhcr.ch/cgi-bin/texis/vtx/home

As UNHCR concluded its 60th session it also took special measures on situations in Belarus, Democratic People's Republic of Korea, and human trafficking. http://www.un.org/News/Press/docs/2004/hrcn1099.doc.htm

A US judge has ruled that a Sikh police officer who was forced to leave the New York Police Department because he refused to remove his turban or shave his beard, should be reinstated because he had been discriminated against because of his religious beliefs.

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11. Law and Legal Issues

Amer Azizi, a Moroccan fugitive, has been indicted in Spanish court for helping plan the September 11 attacks. He had previously been sought in connection with the Madrid May 11 train bombings.

Abu Bakar Ba'asyir was rearrested by Indonesian police upon his release from jail on treason and immigration charges. He is now being detained for alleged terrorist activities.

Abdelmalek Bouzgarene, Mohamed el Jarmouni, and Mourad el Manouar have been arrested in Morocco inconnection with the Casablanca suicide bombings last May 16.

Niall Connolly, Martin McCauley and James Monaghan have been acquitted in Colombian court of being IRA members who trained left-wing rebels in Colombia. They were found guilty on a passport offense. The case will be appealed, but they will be freed on bail once they pay a fine on the passport charge.

Doku Dzhantemirov of Grozny, Chechnya, has been sentenced to life in prison for shooting down a Russian military helicopter with a shoulder-fired missile, killing 127 soldiers.

Matthew Hale, a white supremacist, was found guilty in US court for trying to have a federal judge killed and was ordered to stop using the name World Church of the Creator.

Fakid Hilali, detained in Britain on immigration charges, has been identified by Spanish Judge Garzon as "Shakur", and accused of helping to plan the September 11 attacks. His extradition has been requested.

Shane Hughes, Stephen Quigley, Patrick Tierney and Gavin McArdle were accused in Northern Ireland court of possessing a rifle and ammunition with intent to endanger life and having other equipment for terrorist purposes.

James Kilmore, a former member of the Symbionese Liberation Army (SLA) involved in bank robberies and an anti-police bombing campaign, has been sentenced to 48 months in US federal prison.

Milorad "Legija" Lukovic surrendered to Serbian police and has been arrested as the alleged mastermind of the murder of Serbian Prime Minister Zoran Djindjic.

Dawabe Ben Albi Maulana, Talib Uddin and Arsad Indaman Abdulhabi were arrested in the Philippines. The three alleged Abu Sayyaf members reportedly admitted to a terrorist mission that was also connected to a drugs-trafficking operation.

Carols Menem, former President of Argentina, has been issued with an international arrest warrant after he failed to appear in court on tax fraud charges.

Parveen Sharif, sister of would-be Tel Aviv suicide bomber Omar Sharif, appeared in British court charged with inciting an act of terrorism. She, the brother and wife (Zahid Sharif and Tahira Tabassum) were accused of failing to disclose information about terrorism.

David Paul White has appeared in Belfast, Northern Ireland, court on charges in connection with attempting to bomb the motor tax office and with making two improvised explosives devices.

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12. Transportation

The US Transportation Security Administration has released the executive summary of the "Private Screening Operations Performance Evaluation Report"
http://www.tsa.gov/public/display?theme=44&content=090005198009d340

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13. Weapons of Mass Destruction

Nuclear security in the US was the topic of several General Accounting Office reports. GAO found that the terrorist threat defined by the Department of Energy was lower than that in the intelligence community, that criteria for protection against sabotage may be insufficient, as well as other problems. http://www.gao.gov/cgi-bin/getrpt?GAO-04-701T and http://www.gao.gov/cgi-bin/getrpt?GAO-04-623 In reviewing the proposed nuclear waste repository at Yucca Mountain, Nevada, GAO reports persistent quality assurance problems that could delay the license from the Nuclear Regulatory Commission that the Department of Energy requires. http://www.gao.gov/cgi-bin/getrpt?GAO-04-460

The UN Security Council unanimously adopted a resolution making it illegal to transfer biological, chemical or nuclear weapon materials to terrorists or black market dealers. http://www.un.org/News/Press/docs/2004/sc8076.doc.htm

The International Atomic Energy Agency is developing a radiation-based method to sterilize malaria-transmitting mosquitoes. This expands the IAEA's fight against weapons of mass destruction to combat diseases of mass destruction. http://www.iaea.org/About/index.htmlThe UK Atomic Energy Authority will decommission the Winfrith site in Dorset by 2020. The former nuclear research site will be completely cleared 30 years earlier than planned.

US President Bush signed a presidential directive "Biodefense for the 21st Century" that provides a national biodefense framework. http://www.whitehouse.gov/news/releases/2004/04/20040428-6.html

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14. Recently Published

Stewart Bell, "Cold Terror: How Canada Nurtures and Exports Terrorism Around the World" John Wiley and Sons

Steven Dudley "Walking Ghosts: Murder and Guerilla Politics in Colombia" Routledge

Howard W. French, "A Continent for the Taking: The Tragedy and Hope of Africa" Knopf

John Lewis Gaddis, "Surprise, Security, and the American Experience" Harvard University Press

Ben Macintyre "The Man Who Would be King: The First American in Afghanistan" Farrar, Straus and Giroux

Walter Russell Mead, "Power, Terror, Peace, and War: America's Grand Strategy in a World at Risk" Knopf

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FEATURE ARTICLE: South Africa: Past, Present and Future, Part III

Apartheid was more than racial oppression. It was a conflict of two ethnic-based nationalist movements. The Afrikaners, descended from early Dutch settlers, had lived on the land for more than 350 years, at times a majority of the population. The African population recovered after the smallpox epidemic and grew both internally and through migration until they were a large majority, even in white-designated areas. Both the Africans and the Afrikaners claimed the same land.

This type of conflict is particularly intractable. They include Palestinian Arabs and Israeli Jews in the Middle East; Catholics and Protestants in Northern Ireland; Sinhalese and Tamils in Sri Lanka; and complex ethnic mixtures in the former Yugoslavia and the Caucasus.

South Africa stands alone in establishing an inclusive democratic government of their own design and implementation that has now lasted for a decade in which stable progress has been the order of the day. The country is no longer divided by color. Instead, it is divided economically. Today, the middle-class black population, unknown under apartheid, outnumbers the white middle class.

But that is not the end of the story. South Africa today faces formidable challenges. In this third and final section we review some of the significant issues facing the country: healthcare, foreign policy, security; and the economy.
Foreign Relations:

South Africa borders Botswana, Mozambique, Namibia and Zimbabwe. It completely surrounds Lesotho and almost completely surrounds Swaziland. It reached agreement with Namibia over the location of the boundary in the Orange River and has generally good relations with its neighbors. President Mbeki's support for Robert Mugabe during the continued economic and political crisis in Zimbabwe has been controversial and could negatively affect international investment, particularly from European countries.

Buoyed by its economic dominance, South Africa has also assumed regional political dominance. President Mbeki led the transition of the Organization of African Unity (OAS) into the African Union and has promoted the New Partnership for Africa's Development (NEPAD). South Africa has also been an important mediator and peacekeeper for other African nations, although it has also been a rich source of mercenaries.

On the other hand, it has not been friendly towards foreigners. South Africa regularly and repeatedly deports refugees, including tens of thousands of Zimbabweans. A new immigration act was passed in 2002, trying to strike a balance between job protection and the need to import skills. It has accomplished neither. Instead, the focus has been on preventing immigration. In the absence of clear official policy, the skills gap and related problems are likely to worsen.

Internationally, South Africa has helped bridge the north/south, rich/poor divisions between developed and developing countries. NEPAD has been one vehicle in which good governance is promised in exchange for financial aid.

South Africa has been supportive of measures to combat terrorism but reluctant to accept the broadening definition and scope pursued by the US, for whom it has provided no military support. It has offered to help with disarmament and has particular expertise gained from when it dismantled its own apartheid-era nuclear, biological and chemical weapons programs. Although the government pursued an anti-terrorism bill, it was shelved after criticism that it would compromise fundamental rights and freedoms, partly because of a very general definition of terrorism.

Other transnational security issues include South Africa's role as a major transshipment center for illegal drugs. It is also an attractive money-laundering venue. The FATF evaluation says, "the main sources of criminal proceeds are generated by organised crime groups which engage in narcotics and abalone smuggling, vehicle theft, arms and human trafficking, and mineral and precious stone trafficking. The use of 419 fraud schemes remains a threat, as well as other types of fraud using counterfeit cheques, credit cards, and pyramid schemes". South Africa has developed comprehensive anti-money laundering legal structures.
Security:

Domestic security is a greater issue than transnational threats. South Africa has more than 20,000 murders per year, one of the highest rates in the world. Most of the victims are blacks, in the poorest, most deprived areas. South Africa also has the highest incidence of reported rape in the world. Violent crimes such as carjackings, muggings, smash and grab attacks on vehicles and other incidents are common as are property crimes and frauds.

Racial tension and conflict remain a part of South African life and are often made tangible by criminal incidents. One of the most notorious recently was when a white farmer in the Afrikaner hotbed of northern Limpopo fed a black worker to a lion.

Domestic terrorism is a medium-level risk. Qibla is a small radical Islamic group that seeks an Islamic state in South Africa, modeled after Iran. It has been tied to People Against Gangersterism and Drugs (PAGAD) that began as an anti-crime, anti-drug movement but has been accused of housing Islamic militants. The Boeremag, a white supremacist organization, has a following but with many of its leaders on trial for treason it does not pose a serious threat.

One of the most serious threats to security rises from the high percentage of HIV/AIDS infections among security forces. Up to a third of the current security staff are likely to die of their infections.
Economy:

The impressive transformation of South Africa has changed the economic landscape. No longer divided by race, the country is now divided by wealth. The black middle class, previously unknown, now exceeds the white. In 1995 28 percent of households were under the poverty line and by 1999 that had increased to 33 percent. Although the government has provided support for the poorest, it has been difficult to reach rural areas, and there has been little progress in dealing with the major contributing factor of unemployment.

Based on a strict definition of those actively seeking work, unemployment in South Africa is at 30 percent -- nearly five million people. Adding in youths, women, and other categories can push unemployment as high as 40 percent. More than half of South Africa's population is under 25 years of age, and unemployment among these youths may exceed 75 percent.

Key productive sectors of the population are at great risk because of the HIV/AIDS pandemic. South Africa has 5.3 million people with HIV/AIDS, of a total population of 42 million (2002 figures). Prevalence in the working age population is around 25 percent, disproportionately affecting women. Companies are already feeling the impact of the disease. The Bureau for Economic Research and the South African Business Coalition on HIV/AIDS found that profits in a third of had been affected and half expected a downturn in the next five years. The impact is felt through reduced productivity, increased absenteeism, higher recruitment and training costs, and the loss of experienced staff that all add to the costs of production.

Another threat to economic growth comes from shortage of water. South Africa has no important arterial rivers or lakes and extensive water conservation and control measures are required but the growth in water usage is outpacing supply. Supplies are further threatened by pollution from agricultural runoff and urban discharge.

Prolonged droughts threaten both food security and industrial production. Yet again, the greatest impact is felt by the poorest.

The Institute for Democracy in South Africa's surveys find high concern regarding unemployment, with a large majority believing that new jobs are the most important problem to be resolved. There is a general belief that government is improving social welfare but not doing enough to create jobs, and that reductions in civil service jobs (at the behest of the World Bank and International Monetary Fund) are viewed negatively, with the state seen as a major employer.

In South Africa today, the wealth gap presents the biggest problem for future success. Both government and private industry has begun to address issues of black empowerment, providing loans and banking facilities for people with low-incomes, beginning to supply free HIV/AIDS treatment, and expanding public sector works programs. These measures are important, but genuine success will require international support to overcome the significant near-term challenges, including the nearly irreparable impact of HIV/AIDS.

Further Reading:

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