Mandela Asks Investors for a Little Sunshine South African Leader Seeks `Guarantors' of Democracy

Article excerpt

SOUTH African President Nelson Mandela is no used-car salesman when it comes to selling his country.

Mr. Mandela's pitch is more sophisticated. Looking for United States investors to provide capital for South Africa, he is urging them to become partners, to consider "a relationship of mutual benefit."

"We are not engaging in special pleading," he told a large gathering of business leaders on Oct. 3 at the Waldorf Astoria Hotel in New York during a dinner hosted by the National Foreign Trade Council, a private business group. Instead, Mandela, with a robust baritone voice, suggested that investing in his country would be a way to express confidence in South Africa's democracy and would act "as guarantor of its consolidation and development."

The investment is necessary to help improve living standards for South Africans, since 5 million of the country's 42 million residents don't have jobs and 7 million lack adequate housing. "By investing in our country, you will be putting sunshine in their hearts," Mandela told businesspeople at another meeting Oct. 2 at Gracie Mansion, New York Mayor Rudolph Giuliani's residence.

It is a theme he will continue in Washington, where he will meet with President Clinton on Oct. 5 and groups of business leaders.

Giving Mandela a timely boost, Moody's Investor Service announced Oct. 3 that it would rate South African debt at slightly above junk-bond status. However, Standard and Poor's gave the debt a rating just below investment grade. The ratings should help the country borrow money at lower interest rates since South African debt had been unrated before.

Mandela's pitch for investment comes at a time when US investment in South Africa is rising. A year ago, when economic sanctions were lifted, there were 139 US companies with direct investments. Today, there are 169 - an increase of about 20 percent. That is double the rate of the previous two years.

"What most companies are doing is buying back their old operations, such as IBM has done," says Bill Moses, a senior analyst at the Investor Responsibility Research Center (IRRC) in Washington. …