Japan Cultivates Trade Ties With South Africa

JAPAN, which five years ago faced international censure for emerging as South Africa's major trading partner, could become the first country to make substantial investments there during Pretoria's transition to democracy.

Japan has set two prerequisites for a closer economic relationship with South Africa: a free market economy and stabilization of the country's volatile political and social situation.

"We see opportunities that could lead to investments as long as the trend toward an open economy continues," says Masamichi Fujimori, leader of the influential Keidanren economic mission presently visiting South Africa. "But the most important prerequisite is the creation of political and social stability."

After it emerged in 1987 that Japan had quietly become South Africa's major trading partner, the Japanese government was politically embarrassed and instructed its Ministry of Trade and Industry (MITI) to scale back trade. Tokyo has since fallen to fifth position in the international lineup on bilateral trade, but remains well-placed to stage a rapid comeback.

In 1990 Japan's trade with South Africa amounted to $1.2 billion, behind Germany ($1.7 billion), Britain ($1.4 billion), Italy ($1.2 billion), and the United States ($1.2 billion).

"While the Japanese have proceeded with characteristic caution and understatement, it is clear that they are preparing to play a substantial role in South Africa in the future," a Western diplomat says. Japan has maintained its trade potential with South Africa by consulting closely with neighboring African states such as Zimbabwe, Zambia, and Tanzania, and with the Organization of African Unity, which has consented to Tokyo's exploration of investment prospects.

"The lifting of sanctions does not necessarily mean that investment will follow," says Japanese Ambassador Masatoshi Ohta. "We will also look at the prospects for prosperity and we are awaiting the outcome of the negotiating process."

THE African National Congress publicly chided the Japanese for lifting economic sanctions in October last year. But the collapse of sanctions has continued unabated and two of Pretoria's staunchest Western critics in the past, Canada and Norway, are reported to be poised to lift sanctions.

Despite the ebbing of sanctions, however, a proliferation of trade and fact-finding missions from European countries has not yet been translated into new foreign investment. "The right people are coming," says Graham Bell, a Johannesburg economist. "But they are coming with their notebooks rather than their checkbooks."

Japan is a major importer of South African minerals such as copper, nickel, manganese, chrome, and platinum. It is eager to secure its sources of supply given the instability in the former Soviet Union, another major supplier.

"We could import more mineral resources and export more mining technology to South Africa," says Mr. Fujimori, a former senior official of MITI. Japan imports marginally more than it exports to South Africa. Exports are mainly electronic goods, automobiles, and car parts.

The Keidanren mission is dominated by representatives of the mining, steel, and mining technology industries. On its second visit to South Africa in a year, the 34-strong delegation is meeting with government officials, black leaders, and top businessmen. A mission of the Export-Import Bank of Japan will follow.

The Keidanren arrived in South Africa on the last day of a crucial summit of the Convention for a Democratic South Africa (CODESA II) May 16, which failed to reach agreement on key aspects of the transition to democracy.

"Even though CODESA II was unable to deliver the goods, it demonstrated that informal powersharing has already been taking place," Ambassador Ohta says. "It also noted the commitment of the people of South Africa to continue this crucial negotiating process."