Throughout the political confrontation between South Africa and the front -line states, the regional economy of southern Africa has remained one of mutual interdependence, in which South Africa"s neighbours were uncomfortably aware of their economic vulnerability. The South African economy dominates the region; but it is also dependent on its neighbours for labour and markets. Now, with the advent of a more liberal regime in South Africa, the old patterns of economic interdependence begin to take on a different significance. This study examines the main features of this interdependence. It reconsiders the politics of mutual dependence, examining the pressures for sanctions on one side and destabilization on the other, as well as the countervailing pressures for continuing co-operation. It notes the changing political context at the beginning of the 1990s and, finally, considers how regional economic links may be used constructively in moving away from confrontation towards a post-apartheid era.