welfare (one for each "race" at the national level, one for each province,
and one for each Homeland), large military and security establishments,
and financially dependent Homelands.
Isolated by sanctions, the South
African economy was inefficient. The country did not make good use of its
human resources: Whites, however mediocre their talents, had a near mo-
nopoly on middle- and upper-level jobs in the bureaucracy and in the pri-
vate sector. South African products were not competitive with those of the
developing countries of Asia, Latin America, and eastern Europe, because
South African trade unions had forced wages far above those of such
countries. Nor were South African-manufactured
products competitive
with those of Japan, the United States, Canada, and western European
countries, because of low productivity and poor quality. In addition, sanc-
tions and a spate of disinvestments from South Africa were beginning to
bite. In particular, South Africa lacked access to foreign capital. As Ger-
hard de Kock, governor of the South African Reserve Bank, said in 1988:
"In the present international political climate the capital account remains
the Achilles heel of South Africa's balance of payments.":' World Bank fig-