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Eased Sanctions Will Boost Spirits, but Economy May Be Slow to Respond

September 25, 1993|BOB DROGIN | TIMES STAFF WRITER

JOHANNESBURG, South Africa — Tokyo Sexwale, a senior member of the African National Congress, was driving home at sunset Friday when his radio suddenly broadcast the news he has waited years to hear: Black leader Nelson Mandela was asking the world to lift economic sanctions against South Africa.

"We are saying to the world, 'Come back to South Africa. Help us build a new country,' " Sexwale said excitedly moments later from his car phone.

"We are saying, 'We cannot eat your resolutions. It's now time to put your dollars, your pounds, your francs, your lire where your resolutions have been.' That is the new challenge."

It is an open question, however, how much and how quickly the long-awaited call to dismantle all remaining non-military sanctions will help South Africa's crippled economy or ease its growing political unrest after so many years as an international pariah.

Business leaders, political figures and economists said in interviews that they foresee more of a psychological boost than an economic jump-start for the beleaguered country as it moves painfully toward multiracial democracy. Some even fear a backlash when reality inevitably fails to meet rising black expectations of jobs, housing and schools.

"We're all relieved at putting this unhappy saga behind us, but we shouldn't delude ourselves that it's going to magically make things a great deal better anytime soon," said Michael Spicer, spokesman for Anglo American Corp., South Africa's largest conglomerate.

Given the hundreds of governments, jurisdictions and companies involved, repealing the international thicket of legal sanctions may take longer than it took to dismantle the apartheid system itself.

"We're going to be undoing the effects of sanctions well into the next century," Spicer said. "You can't switch them on and off like a light switch."

Perhaps for that reason, there was surprisingly little euphoria here when the historic declaration finally came.

"You won't find anyone dancing on the table tonight," Spicer said. "It's a sort of very minor hurrah. There's a symbolism that's important. But it will take a hell of a lot more than speeches at the U.N. to put this economy back on track."

Mandela's speech came a day after South Africa's white Parliament voted to approve a power-sharing arrangement with a black-controlled transition council to supervise most government functions until all-race elections are held next April.

Debate rages as to how much nearly a decade of sanctions pressured the white-dominated National Party, which has ruled the country for the last 45 years, into dismantling its vicious system of racial segregation.

"We managed to circumvent sanctions pretty effectively," said Edward Osborn, chief economist for Nedbank Ltd., a major banking group. But the bans eroded international business confidence, he added.

The sanctions also took a heavy economic toll. Cutting access to global lending institutions such as the World Bank and International Monetary Fund worsened a financial crisis. Partly as a result, the once-robust economy in Africa's only industrialized country has contracted for the last three years. And black unemployment hovers at a staggering 48%.

Easing sanctions is not going to help that anytime soon. No one, for example, expects new investment to come flooding in.

Although 200 American companies gathered early this month to display their wares at a much-publicized trade show in Johannesburg, none announced plans to invest or manufacture here, said Roger Crawford, president of the city's American Chamber of Commerce.

"I don't think we'll see a significant increase in companies coming to South Africa until such time as we know what economic philosophy will emerge from the new government, and until such time as the political violence comes under control," Crawford said.

Factional violence has surged steadily this year, and many fear far greater bloodshed in the months ahead.

Still, Len van Zyl, head of the South African Foreign Trade Organization, a private corporation promoting international trade, is upbeat.

After President George Bush ended most federal sanctions in mid-1991, he said, the United States regained its traditional role as South Africa's top trading partner. Last year, he said, the United States exported $2.5 billion in goods here, while it imported $1.5 billion worth, mostly in gold and other minerals. He now expects U.S. exports to double, and imports from South Africa to triple.

"Investment invariably follows trade," Van Zyl said. "I don't think we'll see a mad rush of capital. . . . But it will trickle in quickly."

Social activists were also optimistic. The South African Council of Churches, a leader in the anti-apartheid struggle, urged its international partners to "cease all campaigns for the economic isolation of South Africa" and committed itself to encouraging foreign investors to contribute to "the social reconstruction and development" of the country.

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