In the early years, mestiços began to form a third-class between the Portuguese colonists and African slaves, as they were usually bilingual and often served as interpreters between the populations.
In Angola and Mozambique, the mestiço constitute smaller but still important minorities; 2% in Angola In Namibia, a current-day population of between 20,000 and 30,000 people, known as Rehoboth Basters, descend from liaisons between the Cape Colony Dutch and indigenous African women.
In contemporary society, however, to redress the unfair privileges of the past Apartheid regime the policy of Black Economic Empowerment (BEE) was adopted to level the economic playing field.
BEE policy favored indigenous Black Africans for employment, scholarships, government contracts and loans, whereas before such opportunities were strictly reserved for the White minority.
In the 18th and 19th centuries, racialists such as Edward Long and Josiah Nott began to assert that mulattoes were sterile like mules.
The 1595 work Drake's Voyages first used the term in the context of intimate unions producing biracial children, with the Oxford English Dictionary defining mulatto here as "one who is the offspring of a European and a Black".
This earliest usage regarded "black" and "white" as discrete "species", with the "mulatto" constituting a third separate "species". These sources specify that mulato would have been derived directly from muwallad independently of the related word muladí, a term that was applied to Iberian Christians who had converted to Islam during the Moorish governance of Iberia in the Middle Ages.
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According to the same source, the term does not denote being of mixed-race but rather being of foreign-blood and local culture.