US Pushes South Africa as Model

IN constructing a democratic system and a free-market economy, South Africa's new government is working hard to forge strong business links with the United States.

Both countries are anxious to build a relationship based on US support for South Africa's self-help. President Nelson Mandela and other leaders from the African National Congress-led government have made it clear that while they welcome US funds and efforts to facilitate their country's transition from an isolated, apartheid state to a vibrant international player, the African nation will set its own agenda.

Visiting the US to kick off his country's largest-ever commercial initiative with the US, South Africa Minister of Trade and Industry Trevor Manuel says in an interview, ``in the economic sphere, there is much to do to ensure that democracy has content.'' The US, he says, ``is taking the matter seriously.''

US officials hope the benefits spill over to other countries in southern Africa.

``A stable, democratic South Africa can play a responsible role in the region,'' especially with countries wrought with civil strife, such as Mozambique and Angola, asserts a senior State Department official.

While this official expects the new government to be preoccupied with its own pressing domestic agenda, he anticipates South Africa will over the long term be a leader in regional foreign policy by playing a vital role as peacekeeper and arbiter. ``We're pursuing what we consider to be in both US and African interests: enhancing stability and the ability of Africans to resolve their own conflicts.''

This is particularly important, he adds, given the problems the US has encountered in its involvement in Liberia, Eritrea, Somalia, the Sudan, and other African countries mired in domestic or cross-border fighting.

Washington announced last month its own $600 million aid package, to be paid out from mid-1994 through 1996. But it has offered to help coordinate the broader international donor effort and to assist South Africa in its relations with global financial institutions, including the World Bank and the International Monetary Fund.

``They have learned lessons [from other African states, such as Zimbabwe, which have encountered problems meeting the exacting conditions attached to development bank assistance] and are determined to pace reforms on their own terms,'' the State Department official says.

``They have informed us that they want to do something themselves and that they intend to present their own coordinated plan'' to the multilateral banks and donors, he adds, noting that the government is planning to have a multisector conference in the near future to determine the nation's development priorities. ``Then they can draw up a laundry list of their needs.''

South Africa's leaders ``don't need an intermediary [such as the US].... They will choose from this list what they want the World Bank and IMF to help finance,'' says a World Bank official who has assessed South Africa's urban, education, and income-inequality problems.

Assistance to South Africa will be a topic for leaders from the Group of Seven leading industrialized nations - the US, Britain, Canada, France, Germany, Italy and Japan - which will meet at an annual summit in Naples next month. President Clinton, who detailed the US commitment to Johannesburg in a letter to G-7 heads of state and solicited their contributions, is trying to give South Africa a high profile at the July meeting. Mr. Manuel and his colleagues will have to move fast to come up with an outline of their requests by then.

``This new government has to show some tangible improvements [in the standard of living] pretty early on in its administration,'' the State Department official says. US and other international support for housing construction, electrification, and a host of other sectors urgently in need of development ``goes a long way toward stabilizing the country,'' he says.

US exporters and investors hope to capture a sizable portion of the South Africa market. ``If our projections of the market are accurate, we're looking at a $20 billion opportunity for foreign firms over the next four to five years,'' says James Hackney, counsellor to US Secretary of Commerce Ron Brown. While US business is ``intense and focused'' on South Africa, Mr. Hackney says, ``we can't assume we're going to have the market to ourselves.''

TO help US firms compete in one of the world's most promising and largely untapped markets, the Clinton administration has boosted loan guarantees and insurance from the US Export-Import Bank and the Overseas Private Investment Corporation (OPIC).

``Here is a whole disadvantaged community - they need everything - and we are asking ourselves 'how can we help bring them up to where they want to be?''' says Ruth Harkin, OPIC president. ``Many US companies who were in South Africa want to go back,'' she says, and many more want to explore it for the first time.