The Multinational Monitor

April 15, 1986 - VOLUME 7 - NUMBER 7

A P A R T H E I D ' S   V I C T I M S   A N D   A L L I E S

Courting Apartheid

Reagan's Dubious Alliance

by Samantha Sparks

At the request of the Reagan administration, resident representatives of U.S. firms operating in South Africa will meet with a select gathering of about 200 black businessmen April 22, 1986 at a fairground just outside the South African capital of Johannesburg.

For three days, the U.S. executives will be able to peruse exhibitions of businesses ranging from artisanal ventures, like a leather craft shop that produces men's belts, to retail outlets like Africhem, which markets soaps and skin lighteners, to a public relations and market research company run by a prominent Sowetan entrepreneur.

After the "Matchmaker Fair," as the event has been dubbed, a group of South African black businessmen will travel through the United States to meet with executives of firms with major South African subsidiaries, including GM, IBM, and Mobil Oil.

The fair and the U.S. tour are highlights of an administration proposal designed to promote the idea that U.S. companies in South Africa can benefit blacks living under the country's constitutional system of racial segregation.

'U.S. businesses, especially with their experience in our own civil rights movement, are allies in the fight against apartheid," Deputy Assistant Secretary for Commerce James B. Kelly told the House Subcommittee on Africa on April 9.

As part of the administration's effort to maintain private sector activity in South Africa, the Commerce Department has drawn up "a series of projects designed to increase outreach" to black South African communities, Kelly said.

Included in this initiative is "counseling for U.S. firms on how to expand their business with South African non-white companies" and the suggestion that the United States should purchase "a greater volume and variety of goods and services from non-white firms," according to Kelly.

In 1985, exports of non-white enterprises to the United States totalled about $8 million, according to the Commerce department.

Administration officials are enthusiastic about their proposals, which they say can help black businessmen overcome some of the obstacles they face under apartheid. But they admit that their potential to effect change is constrained by South Africa's racial realities.

Because of South Africa's legal structure, the only black-owned firms allowed to come to the fair will be "very small-one or two person shops," one official told the Multinational Monitor.

The notion that U.S. corporations can help overcome apartheid is a familiar Reagan administration theme. The administration argues that persuasion, not punishment, is the most effective means of pressuring South Africa's white minority rulers toward reform. But after five years of "constructive engagement," the level of racial violence and repression of blacks in South Africa is higher than at any time in the last decade.

In the last eighteen months, 1200 people, most of them black, have been killed in civil unrest in South Africa, according to Gay McDougall, director of the Southern Africa project at the Washington-based Lawyers Committee for Civil Rights Under Law. More than 36,000 people were jailed in 1985 for political reasons, McDougall added.

A growing number of lawmakers in Washington are beginning to feel that worsening conditions inside South Africa mandate drastic change in U.S. policy toward that country.

"I fear South Africa may be facing a catastrophe." Michigan Democrat Howard Wolpe told Assistant Secretary of State Chester A. Crocker at the March 12 hearing of the House Subcommittee on Africa.

But "it remains unclear what the administration is prepared to do" to advance the process of dismantling reform, he said.

Wolpe said that the actions of the Botha government in the past six months, including the lifting of a seven-month State of Emergency imposed throughout much of the country, "avoid the key issue of white political domination."

'The bottom line [in South Africa] is that [for] whomever protests the system of apartheid, nothing has fundamentally changed," he stated. "The administration has reached to find progress when in fact none has occurred," Wolpe charged.

Six months after congressional pressure forced President Reagan to impose limited economic sanctions on South Africa, Democrats in the House of Representatives have renewed their call for comprehensive restrictions on U.S. commercial ties with Pretoria.

Broad economic sanctions against South Africa "are necessary to remove U.S. financing of the oppression of apartheid and to make our position absolutely clear to the world," said Congressman Ron Dellums, D-Calif.

Dellums, the leading proponent of divestment in the House, has re-activated legislation he introduced last February because the Executive Order issued by the President in September, 1985, "doesn't go far enough" in pressuring South Africa's rulers toward dismantling apartheid, according to a Dellums aide.

That order prohibited new bank loans to the South African government, limited export of computer and nuclear technology, and banned the importation of kruggerands. In addition, the order required that companies doing business in South Africa uphold "fair" labor practices, with standards based on the Sullivan Principles.

While divestment legislation is being debated on Capitol Hill, a growing number of cities and states are acting on their own to halt South Africa-related investment and purchasing. In 1985, 11 states and 43 cities and counties passed measures restricting economic ties with corporations in South Africa, according to the American Committee on Africa (ACOA).

In addition to anti-apartheid legislation, political instability and economic decline within South Africa have prompted many U.S. corporations to leave the country of their own accord.

In the last year, more than 20 U.S. firms pulled out of South Africa, and direct U.S. investment dropped by about $500 million. It now stands at about $1.3 billion, half of the 1981 level.

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