Try, beloved country: rumors of South Africa's decline are greatly exaggerated.

• Author: Blundell, John

IF YOU BELIEVE what you read and hear about South Africa, you'll think the country is in horrible shape, with 42 percent unemployment, runaway crime, and 5 million people dying of AIDS. After nearly a decade of democracy, sub-Saharan Africa's crown jewel is, many pessimists warn, even more damaged than it was under the apartheid system.

But if you believe your eyes more than the press, and conversations with individual South Africans more than misleading statistics, a different picture emerges. Having spent time in South Africa in the mid-1980s and mid-1990s, I was anxious to return and see for myself just how much truth there was to these disturbing and depressing reports.

Last August I spent 10 days poking around the greater Johannesburg area, from the ravaged Central Business District to the squatter camps, from the townships to the wealthy suburbs. I talked to taxi drivers, scholars, businessmen, squatters, politicians, reporters, lobbyists, hawkers, doormen, a chief, and an ex-president. The society I observed was far from doomed. Rather it was dynamic and growing, with healthy political debate, teeming shops and malls, and a vibrant private sector. South Africa, for all its very real troubles, is a basically free country that's improving by the day.

Rise of the Vendors

"What is the big difference between now and 10, 20 years ago?" I asked Lawrence Mavundla, president of the African Council of Hawkers and Informal Business (ACHIB), a nongovernmental advocacy group that writes model street commerce laws designed to influence legislation in South African cities. We were sitting in the office above his tire service business in the Central Business District of Johannesburg, under portraits of past President Nelson Mandela and current President Thabo Mbeki, who took office in June 1999 and was re-elected last April. Across the road loomed the notorious headquarters of the South African police force, out of whose 10th-story windows many unfortunates "slipped" during the apartheid years.

Mavundla smiled widely. "Now we can talk openly without fear of repercussions," he said. "The difficulty is that the officials who enjoyed enforcing apartheid are still there. These officials do not buy fruits on Friday because they know they are going to raid the hawkers."

ACHIB was founded 17 years ago by 250 street vendors as a reaction to police brutality. Today it has 110,000 members; many have built big businesses; others have gone into politics. President Mbeki's roots are firmly planted in this sector; his mother still runs a spaza shop (a small informal supermarket) where the president worked as a young boy.

Mavundla himself was fired from his position as shop steward at the East Driefontein gold mining company in 1985 after organizing a strike to protest the poor treatment of his fellow black miners. "The black mine workers were being asked to eat the insides of the cow, while the whites were getting all the meat," he said. "That was it. Whites could eat whatever they wanted, but management was deciding for us." He left his job with a mere 400 ($60) rand in his pocket. Not much, but enough to start him off selling cosmetics on streets and trains.

Today this former hawker has his fingers in several enterprises. One of them, his tire business in the Central Business District, sells mainly Goodyear products to a customer base that is now 90 percent black. "I just today employed my first white guy on wheel alignment," Mavundla said, laughing out loud at the irony of his black customers' demanding a white man to perform a technically complicated job. But, he said, "the customer is king!"

Mavundla is confident about his company's future. "Even if my price is higher than a white company's," he said, "I'll get the government contract." How does this favoritism square with his free market rhetoric? Mavundla's justification: "Certain changes must happen, and we need time. White businesses have had lo years to change, and they haven't. However, in another decade things will have changed so much that white and black will be together in owning businesses, and there will be no such thing as a 'white' business or a 'black' business."

This persistent divide between black and white is, of course, one of apartheid's many terrible legacies. The racial tension manifests itself in many ways, some subtle, others not.

South Africa's complex, one-of-a-kind history has resulted in a country with H official languages and a racial mix of 75 percent black, 13 percent white, 9 percent "colored" (of mixed white and nonwhite descent), and 3 percent Indian/Asian. Its Gini coefficient--a 0-to-1 index that measures the distribution of wealth, with o being absolute equality--is an extremely disparate 0.62, meaning that the poorest 20 percent get 3 percent of the income and the richest 20 percent get 63 percent. Europe, by comparison, is just below 0.30, and even the "grossly" capitalist U.S clocks in at only 0.35.

You can see these numbers come to life just by looking around Johannesburg. It's only a 45-minute drive from the Gucci outlet in Sandton Square ("the only Gucci shop in Africa") to the squatter settlement behind Chris Hani Baragwanath Hospital in Soweto. But such makeshift camps are small, and you have to search for them, unlike in the rest of Africa and many parts of Latin America, where they are ubiquitous. According to the South African Housing Ministry, about 5 million South Africans (out of a population of 45 million or so) live in the 1,066 informal settlements spread across the country's nine provinces.

An informal settlement is one that does not conform to government town planning rules. Settlements develop spontaneously, generally on land owned by the central, provincial, or local government in urban areas, though they occasionally develop on private land as well. In the rural areas the informal settlements are generally on traditional community land currently held by the state but soon to be transferred to the communities under recently enacted legislation. Initially, no services are provided, but in time the government adds roads, electricity, and water. There is great political pressure on the...