Pretoria Hails Japan's Move to Lift Sanctions

THE decision by Japan to lift trade and financial sanctions against South Africa has been hailed in business and official circles here as the most important economic milestone in the country's return to international acceptability.The Japanese move could lead to an early resumption of Japanese loans and direct investment, direct air links, banking transactions, and trigger a rapid normalization of trade with other key Asian countries, such as Singapore, Indonesia, and Malaysia. A Japanese official said on Oct. 22 that Tokyo would likely restore diplomatic relations with South Africa before year's end. "I would view this very positively, said Rand Merchant Bank chief economist Rudolf Gouws. "This raises the prospect of the first direct Japanese investment, and it is my impression that they will come back strongly." In terms of the Oct 22 announcement, Japan - which until 1986 was South Africa's largest trading partner - will immediately scrap bans on direct investment, air links, and the import of South African steel, iron, and the voluntary restraint on the sale of South African gold coins (Krugerrands). The statement by acting Foreign Minister Misoji Sakamoto said the Japanese government welcomed continued progress toward a nonracial democracy in South Africa. "It regards the reform process as irreversible and believes that restoring growth to South Africa's economy is important for improving the country's welfare - including that of its black majority - resolving social problems, and ensuring progress of the negotiation process." Japanese imports from South Africa - mainly minerals and agricultural products - are valued at $1.8 billion per year, and exports - mainly automobile components, electronic goods, and machinery - at $1.5 billion. The only embargo to remain will be the ban on the export of Japanese computers and technology for use by parasecurity agencies. In an official statement, the African National Congress said it regretted the Japanese decision and contested its judgment that the process of political change was irreversible. The ANC cited the release of remaining political prisoners, continuing violence, and the government's covert funding of political allies as outstanding "difficulties." Referring to the Japanese position, the ANC said policies that had the potential of delaying a negotiated settlement, while well-meaning, "are disastrous in the lo ng term." The Japanese move overshadowed a decision by Commonwealth heads of government meeting in Harare, Zimbabwe, to support a phased lifting of sanctions against South Africa. The Commonwealth - a club consisting of Britain and 50 of its former colonies - endorsed scrapping of bans on cultural and academic exchanges, consular and visa facilities, direct air links, and tourism. But the Commonwealth decided to keep trade and investment sanctions until the formula for transitional rule had been agreed between the major parties. Under pressure from Britain, which argued South Africa urgently needs foreign investment, the Commonwealth decided to leave lifting of financial sanctions to the proposed all-party conference of South Africa leaders. The decision, which comes three months after the United States scrapped a similar package, follows Japan's election this week - with African support - to a nonpermanent seat in the United Nations Security Council. A Western diplomat said Japan was determined it should not jeopardize its Security Council chances by being seen as over-hasty in lifting sanctions against South Africa. In preparation for the lifting, Japan sent a fact-finding mission of the influential business federation, Keidanren, to South Africa in April. In July, Deputy Foreign Minister Muneo Suzuki visited South Africa, where he held talks with government and African National Congress officials. The ANC urged Japan not to lift sanctions before the end of year. When the US Congress adopted the Comprehensive Anti-Apartheid Act in October 1986, Japan faced mounting political pressure to cut back its flourishing trade with South Africa. As a result, its two-way trade with Pretoria dropped by about 25 percent to the current level of $3.3 billion a year (28 percent of South Africa's annual trade). Germany, subject to less stringent trade sanctions by the European Community, soon replaced Japan as South Africa's leading trading partner. The government welcomed the move. Foreign Minister Roelof (Pik) Botha said, "It is recognition of the bold steps taken by President Frederik de Klerk and will be seen as supportive of the envisaged negotiating process in South Africa."