S. Africans eager for sanctions' end U.S.-theme trade fair is big success

September 13, 1993|By Michael Hill | Michael Hill,Johannesburg Bureau

JOHANNESBURG, South Africa -- The South African businessman stood underneath the Maryland flag and thumbed through a directory of the state's businesses, looking for chemical companies, writing down names and addresses.

Such attention pleased Sheila Dixon, the Baltimore councilwoman who was staffing the state's booth at Made in the USA, a trade fair held in the suburban World Trade Center.

"I think we've had about 250 to 300 leads," said Ms. Dixon.

Recent decisions by negotiators trying to turn South Africa's all-white government into a multiracial democracy mean that economic sanctions against the country should soon disappear, heightening interest in the exhibition.

"We came representing eight companies, but people have been asking about everything -- food, textiles, chemicals, you name it," Ms. Dixon said.

Indeed, a visit to the colorful show featuring more than 200 companies -- some are from the United States, more are local distributors of American products -- reveals something akin to a feeding frenzy.

The trade fair, which ended yesterday, has been a virtual social event in Johannesburg, combining South Africans' excitement over their return to the international arena and their fascination with American culture.

You can see it in the way they follow their cricket team's fate in Sri Lanka, in the daily headlines over the status of two planned concerts by Michael Jackson and in the crowds at the trade fair who are looking at everything from WordPerfect to the Humvee, the Desert Storm military vehicle now available for civilian purchase.

Economic sanctions -- never an impermeable barrier -- have been eroding since the walls of apartheid started coming down three years ago.

They are expected to disappear next month. That's when the Transition Executive Council comes into existence. This interim multiracial institution, hammered out in negotiations, will essentially run the country until next April's election. Its final approval should trigger a call by Nelson Mandela, president of the African National Congress, to lift remaining sanctions.

But many warn that this will not mean the economic bounty some South Africans seem to expect. Perhaps most importantly, it should mark the return of the International Monetary Fund and the World Bank to the country's economy. But IMF money is expected to have more of an impact on government finances than on the man- in-the-street, while World Bank-backed developmental projects will take some time to get under way.

The threat of violence and general uncertainties about the future the country will also inhibit would-be foreign investors, especially when combined with the fact that South Africa's return to the world economy comes at a time of general recession.

Competition for capital

"There actually is a lot of capital out there," said one Western diplomat. "But there is also a lot of competition for it, from Eastern Europe, from Asia, from the United States where there is pressure for domestic investment."

One hope of many South Africans is that the same political pressures that caused many companies to leave South Africa will now be brought to bear on investors, convincing them to get back in.

"I think the United States can be proud of the role it played in bringing down apartheid," said Michael Judin, a trade lawyer associated with the U.S. Chamber of Commerce in Johannesburg. "I now hope that America will play an equally important role in rebuilding the country."

He noted that the anti-apartheid activists in the United States heeded the call of Mr. Mandela during the sanctions era, so they should also go to work when Mr. Mandela calls for investment.

"It's really a cottage industry," Mr. Judin said of the American anti-apartheid movement. "What they were working for is about to happen. This would give them something else to do to try to help this country."

The hope of South Africans is that the billions of dollars in government and trade union pension funds which were pulled out by their political strings in the sanctions era will be put back in.

To attract those funds, there's an attempt to develop investment opportunities that will both make money and display a social conscience. A recent bond offering by Escom, the nation's electric company, to finance the electrification of black townships is one example.

Actually, with Coca-Cola available in any store, Kentucky Fried Chicken on many corners and Kellogg's Frosted Flakes on supermarket shelves, it's hard to believe there were any sanctions at all.

Companies have used a variety of methods to keep a niche during the sanctions era. Some that were already here sold to local owners or arranged distribution deals with independent companies. Coca-Cola, for example, makes its product in nearby Swaziland and goes through an independent distributor.

Reginald Mayor, the international sales manager for Luster Products, a black-owned Chicago company that makes cosmetics, said his products have made it into South Africa on a small scale for years.

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