Ciskei's Independent Way

Critics at home say this black "homeland" is a traitor to the anti-apartheid cause. Critics abroad say its hopes for prosperity are a pipedream. An investigative reporter goes to Ciskei to find out what's really happening.

There is a small black African country where new-factory openings are so frequent people are losing count of them, where employment in some areas has more than quadrupled in the last four years, where blacks are setting up small businesses in droves and will soon be able freely to own property for the first time in nearly a century, where urban blacks are becoming homeowners under a privatization-of-government-housing plan, and where all manner of "white man's laws" inherited from neighboring South Africa, including the detested race laws, are being swept from the books.

You'd think that this country and its leader would be getting a good press, especially among fellow blacks. But that, I found during a recent investigation, is not the way the story of Ciskei reads.

The Republic of Ciskei (sis-kie), formerly one of South Africa's "self-governing homelands," gained its independence in 1981 and set itself on a course of sweeping free-market economic reforms. It was news of these reforms that took me to Ciskei, but when I stopped first for a week in Johannesburg and the neighboring black township of Soweto, it soon became apparent that my enthusiasm for what was happening 500 miles away in Ciskei was not widely shared at all.

Dr. Lennox Sebe (SEH-bay), the president of Ciskei and the leader of its reforms, is held in very low esteem by the cream of South Africa's anti-apartheid intellectuals. "Fool," "despot," "traitor," "autocrat," "oppressor," and "stooge" is the best they had to say of him. Charges of detention without trial, harassment, and torture, long associated with white-ruled South Africa, are now laid at Sebe's door.

Ciskei itself, in the view of these critics, is a "fraud" as an independent country. More than that, the homelands constitute "the linchpin" of a South African scheme of "Grand Apartheid" and are "the key to the white man's continuing domination of blacks."

Nor is criticism of Ciskei and its president limited to intellectuals who might be disdainful of the new country's avowed enthusiasm for free enterprise. In Soweto, a sprawling black township of 2 million, followers of the black American free-market economists Thomas Sowell ("How can we get him to come here?") and Walter Williams ("He came!") were equally scathing: Ciskei is a classic banana republic; it is led by a very unpopular man put in by South Africa's white government; the homelands were created to divert attention from the main issue—one man, one vote for South Africa.

In Johannesburg, Afrikaners (whites of Dutch descent), who tend staunchly to support the apartheid policy of racial segregation and discrimination, derided the idea of a "kaffir"—their pejorative term for blacks—leading anything. White non-Afrikaners, politically more liberal, were more polite but just as skeptical: Ciskei is Sebe's fiefdom; it exists only thanks to high taxes in South Africa that fund almost all of his spending; most of the latter is questionable, probably highly dubious—even criminal; and he is slapping any opposition into rapidly filling jails.

People knew that the three-year-old Third World Ciskei is breaking the mold, going for free-market capitalism and eschewing socialist planning. They knew it, but for the most part they did not want to talk about it. When I pressed the point I was told very brusquely, "It's irrelevant to the main issue," or "It's too far away to have any impact here even if it's successful," and finally, "It doesn't matter whether it's a success or not—black activists would still condemn it."

Ten years ago, sitting in a downtown coffee house in Johannesburg, a white person would I have been surrounded by other whites, served by blacks, and have paid the white cashier. Today a white might well be surrounded by blacks, be served by whites, and then pay a black cashier. Apartheid has changed. Some—but by no means all—of the regulations proscribing or limiting blacks' freedom in South Africa have been removed, relaxed, or ignored. Anti-apartheid activists, however, charge that this is nothing but a thin veneer, a shallow public-relations campaign by the South African government to mollify overseas critics and draw attention away from what these activists call "the final solution," or "Grand Apartheid."

Grand Apartheid, as these critics detail it, is the policy of carving new "states" out of the main body of South Africa corresponding to the major tribal groups among blacks. Such states become self-governing homelands and are persuaded to apply for "independence." To date, four have become independent—Transkei in 1976, BophuthaTswana in 1977, Venda in 1979, and Ciskei in 1981—although no other nation but South Africa recognizes them. The remaining six—Lebowa, KaNgwane, KwaNdebele, KwaZulu, QwaQwa, Gazankulu—are self-governing within the Republic of South Africa.

However, this is only the start. Every black South African has been assigned the citizenship of one of the homelands on the basis of place of birth, language, or cultural affiliation. And as a self-governing homeland goes independent, all its assigned blacks are stripped of their South African nationality—denationalized. So a black who was born in Soweto and lives in Soweto but speaks Tswana is a citizen of BophuthaTswana and an alien in South Africa, permitted to enter, move about, and work there at the pleasure of South Africa's government.

Eventually, by conceding 13 percent of the total area of South Africa to the homelands and denationalizing some 70 percent of the population that is black, South Africa itself will contain no black nationals, only black aliens, or guest workers. The now-disgraced Connie Mulder summarized the ultimate goal when, as the South African government minister in charge of administering the homelands policy, he said in 1978: "If our policy is taken to its full logical conclusion…there will not be one black man with South African Citizenship.…Every black man…will eventually be accommodated in some independent new state…and there will no longer be a moral obligation.. .to accommodate these people politically."

With the policy of denationalization of blacks up and running, the Coloureds (people of mixed race) and Indians have finally been allowed a place in a new, tri-cameral Parliament. Thus, when the day comes that "every black man" is "accommodated in some new independent state," the South African government will be able to say to the world that has been so critical of apartheid: "Look, we have one man, one vote, with full rights for all our nationals. The blacks are only gastarbeiten, like the Turks in Germany or the Algerians in France. What's the problem?"

Such was the case of the critics of Grand Apartheid. Others put a different face on the matter. The problem confronting South Africa, they say, is how to ensure self-determination for each of the country's 12 minorities—nine black tribal groups, plus whites, Coloureds, and Indians. In Sri Lanka today, they note, 2 million Tamils are demanding independence. Violence besets India as the Sikhs seek political autonomy. And so on. The homelands policy should be seen, not as apartheid's "separate development" taken to the extreme, but as an attempt to avoid the tragic outcome of imposing majority rule on a heterogeneous society. But as my week in Johannesburg and Soweto went by, it became evident that the Grand Apartheid view prevailed in reactions to Ciskei and its independent ways.

Makana Tshabalala and Moses Leoka are top officers of the Soweto Chamber of Commerce. Tshabalala has a fast-food chicken take-out chain, while Leoka works for Standard Bank. We met in Tshabalala's home, ate chicken, and later talked in the office-cum-storeroom to one side of his business as his wife brought the books up to date and staff members came in and out for supplies.

Tshabalala had had a tough time opening his business. He'd been attacked from one side by the "white man's red tape," he recounted, and from the other by "black militancy which places the entrepreneur in an isolated position, although once you're open they do patronize your business." In the late '70s the South African government had relaxed highly prohibitive regulations concerning black businesses, leading to a massive increase in their numbers in Soweto. Everywhere I drove in Soweto there was evidence of a burgeoning small-business sector, both formal and informal.

To Tshabalala, the "strongest possible political statement you can make is to make a profit." And to do so in Soweto, he added, most people still have to operate "outside the white man's law."

Why then, I asked, was this devotee of radical free-market theorists such as Thomas Sowell and Walter Williams not shouting from the rooftops for the "Sebenomics" of Ciskei? It was very simple. South Africa's whites "are taking our country away from us," he declared. "The whites are seen as one nation—when they're not. We are seen as separate groups. Imagine what would happen in America if the US government made all Irish-Americans Irish nationals! German-Americans, German nationals! Italian-Americans, Italian nationals, and so on!?"

His theme was repeated in different ways again and again.

On the patio of her exclusive home in a posh white suburb of Johannesburg, Sheena Duncan, president of the antiapartheid activist group Black Sash, scored the homelands policy as "a very cheap way of not looking after people." Her evidence: "Over 50 percent of our population is officially resident in the homelands, but under 10 percent of our government expenditures are directed to them." Scrapping the homelands policy would, she said, "be the first step toward abolishing apartheid."

"All of South Africa is over-regulated," replied Duncan when I confronted her with President Sebe's deregulation of business in Ciskei. "Why limit it to such a small area? All Sebe is doing," she concluded, "is enriching a small group of people. To keep power, he has to reward the top people to keep them loyal."

Back in Soweto the next day, Dr. Nthato Motlana, a major black political leader, welcomed me in the main office of his medical practice. He came to the point quickly. Parliamentary elections in all the four independent homelands have been "rigged"—"South Africa chooses fools they can control and get re-elected," Motlana charged.

"The leaders of the homelands are traitors to the black cause, and they're not independent. How can they be, when they depend on South Africa for so much?" Motlana dismissed Ciskei and the others as "obscene" and continued: "South Africa is one country, but the white men are cutting it up into little pieces and giving them to people they favor. We want rights in a common fatherland."

John Dugard, a white opponent of apartheid, was born and bred in Ciskei. As the leading anti–Grand Apartheid academic jurist, it is a matter of wry amusement to him that it was his father who gave Ciskei's Sebe his first major boost by promoting him from school teacher and headmaster to school inspector. A law professor at the University of Witwatersrand, Dugard contends that Ciskei has the worst human-rights record of all the independent homelands. But "it should have the best," he suggested, "because it had had the longest period of contact with the whites of all the homelands."

I met Bishop Desmond Tutu in the offices of the South African Council of Churches just after his return from America and Europe, where he had been awarded the Nobel Peace Prize for 1984. More a Cardinal Wolsey than a Thomas More, every sentence was tailor-made, instantly quotable, and highly charged.

"The homelands policy," he said, in a pointed reference to Hitler's treatment of the Jews, "is apartheid reaching its final solution." And, referring to Ciskei's record on civil rights: "The elite of Ciskei are having a splendid time. They are behaving as oppressors always do in these situations. They are very apt pupils at outdoing their teachers at their own game."

Percy Qoboza, once jailed by the South African government for political activity and now the associate editor of the black newspaper City Press, was equally damning. Ciskei is a white creation that has disinherited blacks. It is an imposition and an abomination, a sham run by "a despot gone mad." Human oppression within Ciskei knows no bounds; people are being incarcerated without trial every week, he said.

Thus in taking Ciskei to independence, President Sebe is a "stooge," because he is a key player in the implementation of Grand Apartheid. He is a "traitor," because he is deserting the cause of the black vote in South Africa. He is a "fool," because he fails to appreciate what happens to stooges and traitors. And his civil rights record makes him a "despot," an "autocrat," and an "oppressor."

With this as my introduction, I was off to Ciskei to find out what I could.

From Johannesburg I flew to East London, which lies on the Indian Ocean at the southern end of a V strip of South Africa separating the independent homelands of Ciskei and Transkei. Bishop Tutu had made a point of ridiculing the separation of two homelands by a narrow strip of land. The people in both Ciskei and Transkei, he noted, speak Xhosa (KAU-sa); if there were any sense at all to the homelands policy, "They should be one!"

The commonly accepted history of the Xhosa people, however, provides a clear explanation of the existence of two separate nations. Oral tradition holds that Bantu tribes started migrating south from the Great Lakes region in central Africa around 900 A.D. By 1650, the Xhosa tribe had reached the area now known as Transkei. In 1740 an attempted coup against the paramount chief Phalo led to a permanent split, as he and his son Rharhabe moved west across the Kei River (Transkei's western border) into Ciskei, leaving another son, Gcaleka, in Transkei.

As Phalo and Rharhabe moved west to the Great Fish River, now Ciskei's western border, white settlers were moving east from Cape Town. The Great Fish became the accepted boundary between the two groups until 1779, which saw the beginning of 100 years of struggle and nine full-scale frontier wars ending in defeat for the blacks in 1879.

Although the separation between Ciskei and Transkei was "utterly ridiculous" to Tutu, all of the Ciskeians I met were very conscious of the schism that had occurred in 1740 and proud of their ancestors' valor in the frontier wars. To many of the whites living and working in the area, the clear separation also made eminently good sense. Relations between the two groups, they said, were often not good. Indeed, it was said that even a common border could lead to trouble.

From East London I avoided the divided highway to King William's Town and Bisho and took a back road through the Ciskeian countryside. The transition from First World South Africa to Third World Ciskei was quick and stark.

Although not a particularly prosperous area, East London is not too different in many respects from Western cities. Stores, restaurants, and gas stations and trim detached homes with well-tended gardens line busy, well-paved roads. One could take photographs there, mix them up with ones taken in, say, Corpus Christi, Texas, and Portsmouth, England, and only an expert horticulturist would be able to pick out those of East London by the flora.

Within yards of turning into Ciskei—there was no checkpoint at the border—the picture changed dramatically. Occasionally we passed a man on horseback. Every mile or so, there were groups of blacks sitting at the roadside waiting for a bus. Many were walking and obviously expecting to walk perhaps 10 or 20 miles. Women balanced large bags on their heads. Children were everywhere, some with adults and others herding cattle in the fields. Women and girls, some as young as four and five, collected armloads of firewood and balanced the bundles on their heads to walk in file back to their villages.

Most of the land was uncultivated, often stony, with few trees but many bushes. Now and then I saw strips of cultivated land with predominantly women hoeing maize, which seemed to be the sole crop.

Villages were everywhere, scattered across hilltops and slopes. Typically, they numbered between 50 and 150 homes. Many were not connected to the main road, and one could see well-worn paths leading from them to the bus stops. None was marked on the largest scale map. To the extent that a map provides a picture of a country, Ciskeian cartographers could improve their products enormously by taking a large handful of confetti, dropping it, and stating that each piece represents a village.

Later during my time in Ciskei I was to visit some of its urban centers such as Zwelitsha and Mdantsane, the second-largest black city in southern Africa after Soweto. Outside of such urban areas, however, rural Ciskei is typically rolling hills, small villages, and subsistence farming.

It naturally occurred to me to ask how an emerging black African country, a tiny area less than a third the size of Vermont, with no natural resources to speak of and little developed industry or agriculture, geographically isolated from southern Africa's major markets, and hived off a Western-style welfare state had, alone among the 10 homelands, hit upon a radical pro-market approach. Ciskeians, however, hadn't sat down to figure out its origins.

The best I could establish was that its base was a strong sense of history among Ciskeians, who know that their forefathers did not live the communistic way of life so many experts say they did. Communal, perhaps; communistic, never. Building on this, they had looked around their continent and the rest of the world and perceived a perfect correlation in developing countries between free enterprise and prosperity and between socialism and poverty. As one pointed out, "We may suffer bad droughts, but only Marxist African countries seem to suffer very bad droughts!"

A third element was their inheritance of all South African laws enacted to the date of independence, December 4,1981. These were whites' laws and thus by definition part of apartheid and other evils to be swept away. These were the laws which, as President Sebe put it to me, "had seen small-business men chased as criminals by police dogs."

The final element was the work of the Small Business Advisory Service (SBAS), a nonprofit group set up in 1974 in Johannesburg by Ian Hetherington. A British-born accountant, Hetherington is the former head of the South African arm of Norton, Ltd. His route to involvement in Ciskeian affairs started in the early '70s with a belief that southern Africa was desperately short of black entrepreneurs. SBAS, funded by Norton and later by Barlow Rand as well, was the result. To date it has helped thousands of black and other entrepreneurs and drew the attention of Dr. Lennox Sebe, who had been the chief minister of the Ciskei Territorial Authority since 1973. When his party, the Ciskei National Independence Party, won the parliamentary elections in 1981, Sebe was made president of the new Republic of Ciskei.

As far back as the '70s, Sebe's speeches were singing the praises of free enterprise to the people of Ciskei. And now with independence, there was finally the opportunity to do something about it. In July 1983 his administration appointed nine experts—all white South Africans, none of them resident in Ciskei—to a Commission of Inquiry into the Economic Development of the Republic of Ciskei. The Swart Commission, named after its chairman, Nicolaas Swart, reported in December 1983, and its recommendations were immediately accepted.

The core of the report is the central role of the entrepreneur and ways in which "to accelerate the process of introducing potential Ciskeian entrepreneurs to the free market system." To achieve development, the report urged such key reforms as:

• wholesale deregulation of business, in particular small businesses, including the repeal or amendment of some 500 South African laws;

• reform of land ownership to introduce security of tenure, the right to buy and sell, and the right to consolidate and subdivide;

• privatization of large parts of current government assets and activities; and

• establishment of Ciskei as a "tax haven" that attracts investment with low taxes.

To mainstream development economists, who have dominated the guidance of black African economic policies, this was strong medicine and led to charges of "excessive emphasis on the potential role of the market." The commission,however, held firm and responded by pointing out that it had conceded "much more to affirmative development strategies than the leading social scientists in the spontaneous order (free-market) tradition would condone."

In addition to accepting the Swart Report in full, the Sebe administration appointed a number of the commission's members to implement its policy recommendations. I met with several during my visit, spending many hours learning where they had started, what they had achieved, and where they were going.

Ian Hetherington of the Small Business Advisory Service is the mastermind behind Ciskei's tax-haven plans. "There was no capital gains tax, inheritance tax, or donations tax to start with," Hetherington told me—seeming cheated of the pleasure of abolishing them himself. "The heart of our legislation is that from March 1st, 1985, there will be no tax at all on corporate profits, and the income tax will be a flat 15 percent on everything over $4,000 per annum, with no deductions." (The average annual household income in Ciskei is $1,950; Hetherington said that 95 percent of Ciskei's residents would not be paying income taxes.) "The 10 percent general sales tax on everything but basic foodstuffs remains," Hetherington noted, "and there's a 15 percent flat-rate withholding on dividends, royalties, and interest paid by Ciskeian corporations to people outside the country. But that's about it!"

The corporate income tax had brought in a mere $162,000 last year, and this year is expected to bring in $750,000. This is less than one-half percent of total government revenue, so I asked him how he could view this as a major reform.

He agreed with my figures. But the new tax-haven policy, he said, must be viewed as Ciskei's industrial and employment policy of the future. Between some 200,000 unemployed Ciskeian adults (40 percent of the adult population) and 300,000 youths coming into the labor market over the next 10 years, he figures that Ciskei needs to generate half a million jobs.

The old South African policy had been to try to encourage development in the homelands via taxpayer-funded subsidies. Firms moving into Ciskei, boasted a government agency, were eligible for "the world's best package of subsidies or concessions." Government picked up the tab for 80 percent of the rent on factory buildings, 95 percent of wage bills, up to $300,000 for relocation; 60 percent of transport costs, some of the cost of housing, training, and electricity—on and on went the list.

After independence in 1981, this concession scheme was still in place, with South Africa paying half and Ciskei half. Applicable only to manufacturing industry, it had resulted in underdevelopment of the retail sector and much Ciskeian income being spent across the border. The cost per manufacturing job generated was at least $10,000. Many were highly marginal, and besides, the money was simply not available. "If of the half-million jobs we need, say 200,000 were in manufacturing, the cost of this route would have been $1 billion for Ciskei alone," noted Hetherington. "In every respect this policy was nonsense."

The conclusion of his work was that Ciskei would be far more likely to attract the jobs it needs if it offered tax-haven status to all entrepreneurs, be they in manufacturing or any other sector; Ciskeian, South African, or any other nationality. The tax-slashing legislation was approved in July 1984, along with measures designed to break the subsidy game and encourage firms to go tax-free.

The concession scheme remains an option for a while—under the multilateral agreement between the four independent homelands and South Africa, Ciskei could abolish it completely only with two years' notice. Such notice of withdrawal was given in November. Meanwhile, a firm that opts for the concession route must pay a 50 percent corporate income tax. But it is a tax whose days are numbered. Every payment is being credited against concessions received, plus interest, and when the last such penny has been paid off, all companies in Ciskei will be tax-free.

Along with abolishing the corporate income tax, Hetherington had taken the opportunity to simplify the remaining tax structure as much as possible. "It is totally crazy for a poor emerging nation to have anything but a simple flat-rate system that everyone can understand," he explained. "South Africa keeps increasing its taxes and the complexity of its system. We're going in exactly the opposite direction."

Leon Louw, a lawyer and a principal figure at Johannesburg's Free Market Foundation, is the architect of Ciskei's land reform. Land in Ciskei is predominantly in public or quasi-public hands: 50 percent is controlled by the Tribal Authorities and allocated to individual and communal use, 30 percent is owned by the government, 15 percent is controlled by a governmental Agricultural Corporation, and at most 5 percent is privately held. Under legislation embodying the Swart Commission's proposals and expected to be passed soon, several fundamental rights are being added to the present pattern of land ownership: freedom of exchange, freedom of consolidation and subdivision, and security of tenure.

All previous attempts at African land reform, claimed Louw, have involved central government overriding tribal customs. These attempts have failed, and he is seeking to get a market going instead of legislating a particular pattern of ownership and use.

The 50 percent of Ciskei's land traditionally allocated by Tribal Authorities may now, at their discretion, be bought and sold. "Our aim is not to override them," Louw reiterated, "but to set up a system which they may implement or alter to suit their needs." He sees signs that privatization is going to be popular. "The, only restriction I envisage any of the Tribal Authorities imposing might be something to the effect that some land in a particular area may be sold only to a member of that tribe."

Turning to the 30 percent held by Ciskei's government, Louw talked of the Swart proposals to hold "well-advertised public auctions" to transfer it "into unencumbered freehold title." And to privatize the 15 percent held by the Agricultural Corporation, a variety of schemes is being contemplated, ranging from converting government-run projects to public companies and selling off shares, to selling farms to individuals or groups of families.

Ciskei has already removed restrictions on who can purchase land, Louw noted. "There are no nationality, citizenship, or residency requirements." Building regulations and zoning have been foresworn in favor of market determination of such matters. "Once the new reforms are in place," he concluded proudly, "it will be the freest private land in the world." And that's in a country where, five years ago, blacks were allowed no land ownership and there was absolute government control over the granting and transfer of occupational rights in all land.

Louw is also the principal author of Ciskei's Small Business Deregulation Act, which was passed in July and went into effect in September 1984.

On gaining independence, Ciskei inherited all of the legislation passed up to that date by the South African parliament. My investigations in South Africa had convinced me that its economy was probably more regulated than that of the United States or even the United Kingdom. Louw confirmed my suspicion and cited the example of a small trading store in rural Ciskei, which had had to get 36 different licenses, permits, and so on to operate.

Reviewing all of South Africa's legacy of regulation to see whether there was anything Ciskei wanted to retain "would have taken years," said Louw in explaining his subcommittee's approach. "We wanted to get off to a quick start." Consequently, they chose an alternative route, legislation that specified an initial list of 80 acts, dealing with everything from abattoirs to workers' compensation, that would no longer apply to businesses employing 20 or fewer. Louw stressed that this quick start only scratches the surface—although the store that needed 36 licenses now needs none. For digging down deeper the act established a Small Business Commissioner to supervise ongoing deregulation, or, as it was often put to me, "the removal of white man's law from black business."

The commissioner's powers are wide-ranging, including even the power to exempt a business from a regulation over the phone. When this happens, the commissioner follows up with an investigation and recommends either keeping the regulation, abolishing it for all businesses, or exempting a certain class of business. His day-to-day task, however, is to sift through every existing regulation, ordinance, statute, and bylaw to recommend to Ciskei's parliament additional exemptions.

Clause 9 of the deregulation act stipulates that all of this shall

be guided by free market and common law principles, including the following—

(1) No person should violate the common law rights of another, except by way of lawful self-defence or retaliation in the protection of personal or property rights by reasonably necessary means.
(2) All persons should be free to engage in mutually volitional transactions upon mutually and volitionally agreed terms.
(3) There should be freedom of contract, exchange, association and disassociation.
(4) The law should respect and protect personal and property rights.
(5) The principles of liberty, the rule of law and natural rights should be upheld.
(6) No person should use fraudulent or dishonest means of trade.

Louw expects another 25 acts to be added to the list of exemptions this spring and predicted "that big business will soon start to cry wolf and demand the same exemptions. This way we will gradually build up pressure for and acceptability of the same reforms for everyone."

One of the next targets for Louw's Law Reform Subcommittee is banking laws. A delegation of seven Swiss bankers and others were expected in late January to advise how Swiss-style confidential banking could be set up in Ciskei.

President Sebe seemed confident that the Swiss would find Ciskei attractive. On a recent visit to Switzerland, he said, the first question was always, "Can you balance your country's books?" He'd replied yes. "For how many years?" was the rejoinder, to which his reply had been, "Ever since independence!"

To me he noted: "You discipline the whole nation by having no deficit. It makes everyone draw up their priorities properly, and it sets an example to the people."

Louw's subcommittee is also drafting labor legislation, which he hopes will be "indicative rather than coercive." In other words, it will lay out standards and specify that they apply unless the employer and employees in a workplace agree otherwise.

"There's lots of good theory" about free markets, Louw commented wryly at one point, "but nothing that tells you how to set an economy free." He hopes that the work of the Swart Commission members will prove useful in free-market reforms elsewhere.

Gert Hendrik Claassen is a consulting engineer from the South African city of Durban who now holds a number of positions in Ciskei. Inter alia he is executive director of its National Housing and Urban Development Commission and managing director of the governmental Townships Corporation.

His office is in Bisho, the capital of Ciskei, and is situated on the second floor of its first shopping mall—one of the few places in the whole of southern Africa where blacks and whites do business side-by-side.

Bisho itself, a new city being built from scratch on a bare veldt, is the subject of much derision in South Africa. In some circles, it is considered laughable that Sebe should be behind building a "capital." In others, it is thought to be a criminal waste of South African tax-payers' money.

To date, Bisho amounts to only a handful of buildings: the Parliament and related offices, a radio station, the Supreme Court, one hotel with its casino (gambling has been legalized), a supermarket and office complex, a shopping row, and so on. And when Claassen showed me a gigantic scale model of how the capital would look in a few years' time, all my worst memories of four years as a councilman in a highly bureaucratic, Marxist London borough came back.

Claassen conceded that Bisho is "a political creation." Yes, some of the buildings planned were more government offices needed to relocate certain Ciskeian agencies located temporarily in South Africa. Yes, much of the initial capital outlay had come from government sources. Other than that, though, he thought I would find his approach to the city's development radically different.

It is, he insisted, "a total free-market, free-enterprise approach." The City Corporation was laying down some infrastructure, but "private enterprise will do the rest." The gigantic scale model was only to suggest how Bisho might look as it develops.

"There will be the bare minimum of planning controls. About all we are asking is for adequate sanitation and some fire hazard safeguards. What will happen to certain stands (lots), I have no idea. Obviously, if someone wants to build an abattoir in the middle of housing, I would step in and veto it. But given a free market and all that implies, I don't see such cases emerging."

His aim is to keep the total staff of the city at its current level of 10 and "to privatize as much as possible." As the city grows and new services become appropriate, they will be offered privately. Refuse collection, for example, is already in the hands of two private companies, and his model, he said, is Robert Poole's guide to privatizing government services, Cutting Back City Hall.

Ciskei's radicalism is no less evident in its approach to housing. Claassen showed me the recently revised National Housing Policy, which declared that "housing shall become a free enterprise activity…based on private ownership at every level."

"Ciskei had inherited a socialist approach to housing," he explained. Housing consisted of either government-owned units in the urban areas or the shacks and huts that dotted the rural areas. Prior to independence, freehold ownership had not been permitted in either case. In the three years since, 25 percent of the housing in urban areas, such as Mdantsane and Zwelitsha, had already been bought by tenants.

So far, the government had been selling off public housing by converting rent payments into mortgage payments. Come July 1985, a more radical scheme would go into effect. For every year of tenancy, prospective buyers will receive a $10 discount off a purchase price related to the original construction cost, adjusted for inflation. The cheapest would be $950, the dearest $4,650. If buyers pay cash, they get a further 20 percent off. And to encourage as high a rate of sales as possible, Claassen has announced that the prices of these units will rise 10 percent a year from July 1986 on.

"We are keeping the whole scheme as simple as possible," he told me. "The more you put up artificial barriers, the more people will look for loopholes." Consequently, there is no minimum period of tenancy in order to buy, there are no restrictions on resale, and if the tenant turns down his first option to buy, the property will be available for sale to what Claassen hopes will be a new, emerging class of landlords. Furthermore, there will be no restrictions on the establishment of private lending institutions. And with so many regulations coming off housing in particular and business in general, he foresees many new forms of housing finance being generated by the market.

Virtually everyone I met in Ciskei is enthusiastic and determined to benefit from the economic reforms I had discussed with the Swart commissioners.

Phil Parkin, an English South African, is the chairman of the Ciskei Chamber of Industries. We met in his office at Ciskei Milling, in Fort Jackson, where he employs some 200 people. A giant of a man—he would dwarf even an NFL fullback—he was hugely enthusiastic about the "snowball of development" he saw coming. As Ciskei was abolishing taxes and South Africa was increasing them, he predicted that within five years neighboring South African towns would beg to become incorporated into Ciskei.

"We don't want the concession-mongers attracted by the old scheme," he said. "We want genuine entrepreneurs coming in for tax breaks, not for handouts. This will decrease our dependence on South Africa, and the retention of all corporate profits will lead to even more investment, more jobs, and more prosperity."

Frans Meisenholl is managing director of the Ciskei Peoples Development Bank, a governmental unit that the free-marketeers hope to get out of the business of loan-making. Located in South Africa's King William's Town, it is soon to move 10 minutes up the road to Ciskei's Bisho. "The problem with subsidies," said Meisenholl, "particularly a wage subsidy, is the negative effect they have on productivity. Our motto is, it's a sin not to make profits,' and we don't ask for grants or foreign aid. Instead, we say to an individual, 'Here's a great opportunity: no company tax and very low personal tax, so come and make a go of it.'" He knew of many companies waiting for the tax reforms to come into effect in March before signing up to move in.

Enroute to an appointment with Ian Duncan-Brown, managing director of Dimbaza Foundries, I stopped at the Dimbaza graveyard. I stood on the spot where 10 years earlier the cameras of the British state-owned BBC had been set up in Ciskei to film "The Last Grave at Dimbaza," a liberal documentary dripping with pessimism about the future of the region's blacks unless massive foreign aid were forthcoming. To my left was the town—by Western standards poor, though I have seen much worse in British public-housing developments. Most of Dimbaza's houses had TV aerials, however; most were connected to telephone wires; a number had cars; and many had obviously been bought, for they were being transformed beyond all recognition. To my right, the area that on BBC had been open veldt was now a busy industrial park. Factories of all sorts sat in the shallow trough of land, and on the far fringes even more buildings were going up and new ground being broken.

Ian Duncan-Brown had himself been breaking ground for his original foundry the day the BBC came to make its doleful film. Seven extensions later, he employs 400 people and every month turns out 500 tons of steel crushing equipment for quarrying and mining. Three-quarters of his production is exported worldwide. As enthusiastic as Phil Parkin, he sees the tax reforms "changing the caliber of entrepreneur attracted to Ciskei. Now guys will be coming for the tax saving, and by definition that means they will be making or expecting to make a profit very soon."

To former Californian Don Saul, a manager with the Ciskeian government's Small Business Corporation, the deregulation act was "fantastic." "It will take time, but it will make a big difference," he said. "It's like abolishing OSHA and more back in the States. It means that all the informal-sector businesses in Mdantsane, say, can now come out of hiding in their backyards and really get to work without any fears."

His Ciskeian staff showed me around small-business complexes, one in Zwelitsha, the second in Mdantsane, built by the corporation. The demand for the units was enormous. In Mdantsane the local manager had closed his waiting list when it reached 350; he has 47 units. "As soon as they're viable," explained Saul, "we try to get them to buy the unit, so we can plow the money back into more new units."

The units were very basic, all identical, but the businesses they housed ranged from tailors, hairdressers, welders, and carpenters to engine tune-up and body shops. Between the towns we stopped at Kambache to visit tailor Patrick Mbiko, whose payroll had soared from zero to 50 in under a year. But Mbiko was out—hunting for more workers! His wife and brother showed me their small two-room factory, which was turning out 1,400 children's jogging suits a day for a US chain of stores.

And black business, church, and other spokesmen were just as enthusiastic about the economic reforms.

L.F. Siyo is a butcher and funeral director who employs 7 and 14 in his respective businesses. He is the chairman of the Mdantsane Chamber of Commerce but also a member of the Committee of Twenty, a civil-rights group, so he does not necessarily see eye-to-eye with Ciskei's President Sebe on everything. He was categorical, however, about the benefits of "Sebenomics" to small business. Mdantsane was quiet and stable, and he foresaw a very good five years. Unemployment was still too high, but all that was needed now was more industry. Siyo concluded our conversation by confirming what a number of whites had already suggested: "People see the chance of prosperity in Ciskei. They're running away from the violence of South Africa and coming back."

I met the Rev. Patrick Ncaca, the local Anglican archdeacon, and the Rev. E.A. Plaatjies, the local superintendent of the African Methodist Episcopal Church, in Ncaca's home in Zwelitsha. "For over 300 years," said Ncaca, "this was an arid, underdeveloped land. Now we are getting free enterprise, development, and job opportunities. We never dreamt that this was possible."

Both of them considered the proposed land reform both good and popular. "We used to build on or farm land that was not ours," said Plaatjies. Tax reform, it is true, will bring foreign investors and entrepreneurs, but "the answer to unemployment is more industry, and we are ready to welcome all who come," said Ncaca. He concluded: "As church leaders, we express our highest appreciation for the tax and land reforms. Tell America to come and see for itself what is happening here in Ciskei!"

Probe is the only black-owned magazine in the Republic of South Africa. Published in East London, just over Ciskei's eastern border, its editorial policy is "justice for all." Editor Leslie Xinwa is a Ciskei watcher who has many criticisms of Sebe on civil liberties. But "Sebonomics" is to Xinwa a "just" policy. The economic development, particularly at Dimbaza, is "impressive, even mind-boggling." It used to be a major media event when a new factory opened. Now so many are opening, firms don't even issue a press release. The economic reforms, said Xinwa, are "virile and sensible."

All the optimism in Ciskei stood in stark contrast to the warnings and worries I had encountered from nearly everyone in Johannesburg and Soweto. Few of [those pessimists had ever been to Ciskei, but one who had—Sheena Duncan, the Black Sash activist—warned me of "drunken, machine-gun-carrying policemen terrorizing whites and blacks alike." She added with a dry laugh, "At least the whites are reasonably safe here in South Africa."

I remembered this warning when I was asked, after three days traveling all around Ciskei, "What did you expect to see when you came here?" It occurred to me that I didn't remember having seen a single police officer. "What color uniforms do your police wear?" I asked. "Green," was the answer. So I kept a look out the rest of the week but never did see anything more than two traffic cops—in brown—operating a speed trap just east of Dimbaza.

Everywhere I traveled in Ciskei, I put criticisms I had heard in Johannesburg.

Ciskei, they objected, is a one-party state. It is true, said Ray Mali, chairman of the Ciskei National Independence Party (CNIP), that the two opposition parties of the recent past have joined the CNIP. But people are free to start other parties, he said. (In fact, running for office in Ciskei appears to be about as difficult as getting on the ballot in the United States.)

Mali insisted that the "one-party-state" criticism showed a lack of understanding of Ciskeians' culture and history. "Although we are committed to sound democratic government, we have always said we will retain our traditions. One such was that the chief would call together his advisers for an 'indaba.'" The traditional indaba, he noted, is a discussion or debate that by definition leads to a consensus. "There are opposing views within the CNIP," Mali went on. "But we meet to discuss them and to reach a consensus. We have political freedom according to our standards and culture."

Ciskei's independence, they charged in Johannesburg, is a pretense. The rest of the world refuses to recognize it (or any of the other independent homelands) as a state, its government is controlled by South Africa, and it is totally dependent on South Africa's overtaxed taxpayers.

In many places Ciskei's border with South Africa is unmarked, and one can travel between the two without knowing it. But it is a border. Tax rates are different, legislation is different, and both are becoming increasingly different. Significantly, on one side of the border, there is racially based legislation, on the other, none.

Willie Breytenbach, the top South African civil servant specializing in constitutional development, works in President P.W. Botha's office in Pretoria. "De facto and de jure, Ciskei is independent," he said. "The lack of international recognition does not mean it's not a state. It just means it's a state without international recognition."

Moreover, he noted, "independence is not forced on the homelands. They opt for it voluntarily." As evidence, he cited the case of KwaZulu, which "does not want independence, and Pretoria can't force it on KwaZulu."

If South Africa's government controls Ciskei's, it is not doing very well at it. Breytenbach made it clear that South Africa does not like Ciskei's free-market reforms, "especially not the abolition of the corporate tax. It will lure South African companies offshore, and it sets a precedent for other homelands."

For his part, Chief Mavuso, one of Ciskei's tribal leaders, rejected the idea that the number of whites holding top civil-service positions in Ciskei is evidence of control by the white South African government. Whites, he countered, are employed only in specific technical areas where their expertise is needed.

Tax expert Ian Hetherington had taken me through Ciskei's revenue account, and my first impression had been to agree with the charge that Ciskei is heavily dependent on South Africa. But Hetherington insisted that the 80 percent of total revenue, or $140 million, that comes from South Africa is not charity or foreign aid: $60 million is money that South Africa was at the time of independence contracted to spend anyway—pensions to individuals, for maintenance of South African roads, and so on. Another $60 million is Ciskei's share of duties from the common customs union. Rebating of Ciskeian income tax paid in South Africa accounts for $6 million. And so on, line by line, Hetherington whittled it down to a final $12 million that he reluctantly agreed might be considered "not Ciskeian revenue by right." But that's hardly "total dependence."

Charges of corruption, too, rang in my ears as I had proceeded from Johannesburg to Ciskei. Newly independent Third World countries are notorious for corruption and bribery. But with one exception, I failed to detect the slightest whiff of it.

Ciskei manufacturer Phil Parkin told me of corruption in the other homelands, "but I've never seen the fingers in the cookie jar here." And Gert Claassen of Ciskei's housing department described the government as "honest." He continued, "There's not been the slightest hint of corruption in any of the contracts I've been involved in, and two amounted to $35 and $45 million."

There were complaints of uhuru, or freedom, hoppers. Latterday "carpetbaggers" of the post–US Civil War era, they are also known as "Messrs. Ten Percent." They move around newly independent countries with grandiose schemes at their fingertips, ripe for central government financing. Such people will have a plan, a scale model, and a contract ready for inspection and signature for everything that a new president might wish for his people.

On the record, everything in Ciskei was perfect—no hands in the till. Off the record, the name of one cabinet minister and one uhuru contract came up repeatedly. In some ways, it was reassuring. First, there was outrage; second, there was confidence he would be caught; and third, if this was the total scale of corruption in Ciskei, then it probably had the best record on the continent.

But the strongest criticisms of Ciskei put to me during my investigation concerned its lack of civil liberties. As charged by its critics, it had inherited and kept and was using with utter abandon the white South African internal security laws. That whites would use such methods against blacks was utterly evil; that blacks would do so to fellow blacks was infinitely more so. They mentioned again and again a major boycott of Ciskei's government-run buses in 1983 in opposition to an 11 percent fare increase. Reaction to the boycott, which lasted several months, had included the detention of hundreds, as well as torture, rape, harassment, a curfew and state of emergency, and deaths and injuries by gunshot, allegedly by the police. Some of what was claimed is undoubtedly true. Ciskei's gross abuses of human beings cannot be defended, but one can comment on their scale and add some perspective and context.

In Johannesburg, I was told that Ciskei's jails are overflowing with hundreds of detainees. Nearer Ciskei, in East London, the editor of the black-owned magazine Probe, Leslie Xinwa, said the number was about 30. In his temporary King William's Town office, still in South Africa, CNIP Chairman Ray Mali said it was 5 or 6 and described detention in tribal terms as "a cooling-off period." And next door to President Sebe's office in Bisho, Chancellor Nico Ferreira said the number of detainees was somewhere around 10.

"I've read every local press clipping for the past three months," I countered, "and I've put together a list of about 20!"

"Is one of your 20 the director general of education, the man this morning's papers say is locked up?" asked Ferreira.

I nodded.

The chancellor smiled. "He's sitting outside my door, waiting to see the president. You just walked by him."

Whatever the figure—probably no more than 20 and certainly not hundreds—Sebe readily admits that detention without trial exists in Ciskei. But the state, in his view, has a duty to protect the individual, and in return the individual has an obligation to play by the rules. He claimed that those detained were not playing by the rules of a free society.

I took out a press clipping that listed four current detainees. Why are these men locked up, I asked? He took me through each case in some detail. Qeqe had allegedly been caught trying to smuggle plans of both of Ciskei's jails out to Transkei. Metele, he said, had been detained for possession of "half a ton of action committee literature supplied from Russia with money." Sandi was accused of murder, and Diabantu, a Ciskeian Intelligence Services officer, was thought to be a double agent, caught in radio communication with Transkei.

Helen Suzman, a Progressive Federal Party member of the South African Parliament, had recently been through the same material with Sebe. Early in 1984 she had talked in Parliament of "millions of blacks in Ciskei" being subjected to "the tender mercies of a vicious tyrant like Sebe" (although Ciskei has only a million residents altogether). To his credit, Sebe had invited her to come and see for herself, to go within Ciskei wherever she pleased. She too had been taken through the background of current detainees. Sebe claims she said to him, ''All the ministers of justice in South Africa have never explained it the way you do." To my inquiries, she responded, "My statement stands. Sebe's explanation is the usual story. He showed me only the genuine or convincing cases. My opposition to detention without trial has not altered."

Other than this issue, however, she was apparently impressed by much of what she saw, such as the dedication of the people under very adverse conditions, the deregulation and tax reforms, and Sebe's openness and honesty. She was allowed to go wherever she wanted and talk to whomever she chose, and Sebe actively encouraged her to see not only the good but the bad and the ugly.

Phil Parkin's assessment of Ciskei's troubled record is that it had been "blown out of proportion" and that much of the criticism of Sebe is "somewhat unjustified." Mdantsane, he pointed out, is the second-biggest black city in southern Africa. "No other black homeland leader has such a place where foment can begin." (The largest is Soweto, with a population of 2 million. Mdantsane has half a million. And the distant third is Ga-Rankuwa, in BophuthaTswana, with 100,000.)

At the time of the bus boycott in Mdantsane, "Sebe was an inexperienced head of state with a very difficult situation on his hands," explained Parkin. His optimism was guarded, but he saw a good track record on both economic and civil liberties emerging in Ciskei.

Had there not been a ban on church services one Sunday, I asked church leaders Ncaca and Plaatjies? Yes, they said, but they blamed it not on Sebe, who is an elder in the Congregational Church, but on a low official. Yes, it had damaged Ciskei's image, but they were vehement that there is complete freedom of worship. Not only that, said Ncaca, but "Sebe has stated time and time again publicly that it is the obligation of church leaders to criticize the state if they see injustice."

Finally, I tackled Swart Commissioner Louw. How could he, a staunch advocate of individual liberty, advise a government that detained people without trial? How could he work with people who banned a trade union? How could he be involved with the forced resettlement of blacks from South Africa to Ciskei, which resulted in horrors such as Ndevana, a poverty-stricken resettlement camp I visited in Ciskei?

"Forced resettlement of blacks is part of South Africa's Grand Apartheid," he countered. "It's part of the drive to get all blacks other than migrant workers into the homelands." And although one study has reported that a quarter of Ciskei's current population came there as a result of resettlement over the last 10 years, Louw claimed that since independence in December 1981 there had been no forced resettlement to Ciskei.

On the union question, he acknowledged that the government had banned the major organization, SAAWU, in 1983 and had detained some of its leaders. "Anti-unionism is part of Ciskeian conservatism," Louw explained, and he hoped the new "indicative" labor legislation his subcommittee is drawing up would allow a union movement to emerge in a manner consistent with a free society.

On civil liberties in general, he contended that Ciskei can be compared to many countries around the world generally regarded as free. The Ciskei government had found Soviet weapons, he said, and the government's offices had been bombed. "Very few people in the world oppose detention to deal with terrorism," he pointed out. "Detention is seen as part of apartheid, but it has nothing to do with it—most countries have such a power."

As for due process, "Detainees here, such as the president's brother (the former head of Ciskei's security forces, jailed in 1983), tend to come to trial, be found guilty, and go to prison. It's not a mock trial, we have the British system of innocence until proven guilty, and the onus of proof is on the state.

"Under my chairmanship, the Law Reform Subcommittee will be making recommendations on detention and civil liberties to the government very soon. If accepted, they will overcome most of the remaining criticisms," he argued.

Ultimately, says Louw, the economic freedom that Ciskei's critics dismiss as "beside the main point" can end up addressing that very point. "By increasing economic freedom, one is not condoning the absence of freedom elsewhere. Nor is one, by increasing freedom in a homeland, condoning apartheid. On the contrary, one is undermining apartheid, and I can think of no better way of doing so."

I had left California with a clear brief: find out about the economic reforms in Ciskei and assess whether they might serve to prod the South African government away from its loathsome apartheid policy. I had left Johannesburg with no more information on economic reform than I'd had on arrival, but with political pessimism ringing in my ears. I was leaving Ciskei with notebooks full of information and a great many ifs about the new country's situation.

Three hours after my plane touched down in San Francisco, I watched a CBS-TV news segment on Ciskei. The largely misleading report—for example, segregated trains depicted as Ciskei's are actually the South African government's, and Ciskei is no more "propped up militarily by the South African government" than is Ohio by the US government—culminated in derision for Ciskei's economic reforms.

Government advisors, noted the report, are saying that Ciskei could be another Hong Kong, but "so far it is a wasteland dotted by status symbols" (said as the camera moved in on a statue of President Sebe). Having just returned from Ciskei, I knew that CBS's camera crew, to get to the spot in the middle of nothing where there is indeed a statue of Sebe, had to drive along the outskirts of Dimbaza, passing within yards of large factory buildings—hardly "a wasteland."

There is no question that Ciskei faces daunting odds. The degree of poverty and unemployment was recognized by all I met there. Yet there was a very strong sense of hope and confidence.

Small-business deregulation was obviously working. The informal sector had come out of the regulatory closet—as evidenced, for example, by the scores, even hundreds, of previously illegal taxis and kombis (minibuses) plying for trade in Mdantsane and elsewhere. With deregulation, all their operators needed was a driver's license, insurance, and a vehicle license. Many journeys take them over the border, and South Africa was soon complaining about these "unlicensed" taxis. Ciskei obligingly started requiring a taxi license, but the joke's on South Africa—Ciskei's new taxi license is as easy to buy as a postage stamp!

The privatization of public housing was just as obvious a success. The improvements that new owner-occupiers were making to what were now their own homes were more startling than anything I have ever seen in privatized public housing in Britain. At the very least, new window frames, new doors, new paint work, and so on had been undertaken. And in many other cases the houses had been restructured beyond all recognition.

It was too early to judge the likely impact of land reform when it comes through. Likewise the tax-haven status, which was still a few weeks from coming into effect when I left Ciskei in mid-January. Potential investors and entrepreneurs were clearly interested in Ciskei, however. I observed a constant stream of businessmen in Bisho's one hotel, whose management was looking at plans for adding on a second extension.

Meanwhile, privatization of government assets and functions proceeds. Sale of the bus system is in the works; the only argument is whether the buses should be sold singly or as a unit. Stuart Farrow of the Agricultural Corporation took me to a pineapple farm tended by a commune of 10 families, a formerly white-owned farm bought out by South Africa and turned over to Ciskei. Once the farm is running again, the commune is to buy it from the corporation.

Everywhere, free enterprise and private property were being grafted onto the old system in innovative ways. But how durable is Ciskei's free-market approach?

Three days after I returned to the United States, President Sebe was admitted to intensive care in an East London hospital. Officially, it was a mild heart attack; he was in good condition and responding well. Unofficially, there was news that it was a bad stroke coupled with kidney failure. His illness coincided with a recent cabinet reshuffling that had seen the axing of the two senior chiefs. This was, I learned by phone, leading to speculation that Sebe would step down.

Sebe has by wide acknowledgment been a leading force behind Ciskei's dramatic move to free enterprise. "It is the only salvation for my people," he had told me. "If I deviate, I will be betraying them for a pot of porridge." But I also had found widespread agreement that not just Sebe but Ciskei is committed to the free-market path.

So far Ciskei has resisted pressure from South Africa to abandon its economic and tax reforms. When Willie Breytenbach in President Botha's office had admitted South Africa's dislike for the reforms, he had added, "South Africa and the four independent homelands are an economic Club of Five. If one breaks the rules, one can be thrown out, like Cuba was thrown out of the OAS and Egypt out of the Arab League."

In that case, I had asked, what would happen? "Ciskei would forfeit its access to the Development Bank of Southern Africa," said Breytenbach, "and it would be out of the Customs Union." Matters were not yet at the crisis stage, he had said, but warning signals were being sent to Ciskei.

To some analysts I had talked with, this spelled good news for Ciskei. Out of the Customs Union, it could establish itself as not only a tax haven but also a customs and excise haven, like prosperous Hong Kong (which is one-seventh of Ciskei's size). Out of the Development Bank, Ciskei would not be tempted to make possibly wrong investments using artificially low-interest loans. And, some even speculated, why not also leave the Rand Monetary Union, which is plagued by South Africa's soaring deficit, uncontrolled money supply, and rocketing inflation? Fiscally conservative Ciskei was determined never to run a deficit, and a sound Ciskeian currency, they suggested, would be preferable to the current situation.

And so it goes. While the media in the West insist on calling the homelands ''nominally independent," little Ciskei in effect thumbs its nose at South Africa. And while anti-apartheid activists in Johannesburg and Soweto accuse the independent homeland leaders of betrayal of the cause, the homelands proceed in liberating ways that the South African government undoubtedly never envisioned.

All four of the independent homelands have abolished the "race laws" inherited from South Africa. Ciskei is leading the way with economic freedoms and property rights, reforms that other independent homelands are now reportedly considering. BophuthaTswana, I was told, has put in place civil-liberties protections that Ciskei could now emulate. And Chief Gatsha Buthelezi, the leader of the largest tribal group, is resisting pressure from South Africa to take KwaZulu independent unless Zulus will be able to retain South African nationality.

With Buthelezi's move, the homelands policy as Grand Apartheid may be on its last leg. If the critics of Grand Apartheid are correct, the homelands policy was conceived as the ultimate in apartheid. Blacks would be stripped of South African citizenship and nationality, thus removing the need to accommodate them politically in South Africa. But the very independence necessarily granted blacks under that policy appears to be leading to its demise. In its place, what?

A week and a half after my return, President Botha opened the 1985 session of the South African Parliament with a call for far-reaching reforms, including acceptance of blacks as permanent urban residents (not the "guest workers" of Grand Apartheid); freehold property rights for blacks where they live, work, and farm; an end to forced resettlement of blacks to their "native" homelands; and a solution to the question of South African nationality and citizenship. According to one government official, the biggest factor behind the proposals was the "strong and persistent arguments" of black township officials and homeland leaders against the government's present policies. Ciskei and the other homelands—although the suggestion is anathema to many anti-apartheid activists—may just turn out to be a Trojan horse that ultimately destroys the apartheid that led to their establishment.

If so, and if Ciskei sticks to its free-market reforms and puts its civil-rights house in order, this tiny black African nation could end up offering the troubled continent a new model of development. It would be a delicious irony.

"The homeland concept," Anglican Archdeacon Ncaca had said to me back in Ciskei, "is not the dream of the black. But—and it's a very big but—through this system we have seen wonderful development. The humiliation of the black in the urban areas of South Africa stinks. Now I have tasted black government here in Ciskei, there's no way I want reincorporation in South Africa.

"There's no such thing as a perfect state, and Ciskei is not perfect. However, it is a free, stable country, and Ciskeians feel more secure here than in South Africa."

And Ciskeian entrepreneur L.F. Siyo: "People see the chance of prosperity in Ciskei. They're running away from the violence of South Africa and coming back."

And Ncaca again: "Tell America to come and see for itself what is happening here in Ciskei!"

John Blundell is the executive vice-president of the Institute for Humane Studies in Menlo Park, California. He has a degree from the London School of Economics and was a London borough councilman from 1978 to 1982. This article is a project of the Reason Foundation Investigative Journalism Fund.