US Leads Efforts to Reinvest in South Africa
The high-profile visit of US Secretary of Commerce Ron Brown has built confidence and resulted in a tax treaty and trade councils
SOUTH Africa's trade status and prospects for increased United States investment in the country received a major boost with this week's visit here by US Commerce Secretary Ron Brown and 25 business executives.
Mr. Brown, the highest ranking US official to make an official visit to South Africa in recent times, said he would spend yesterday and today debriefing President Clinton, stressing the need to maintain momentum following the lifting of financial sanctions by the US last week.
``As crucial as the process is between now and April 27 [the date of the country's first non-racial election], nothing is more important than the economic development that is going to come through investment, trade, and commerce,'' Brown told reporters before his departure Wednesday.
During nearly a decade of sanctions and disinvestment by US companies, US fixed investment in South Africa shrank to $1 billion. About 200 US companies withdrew.
Brown announced a series of steps to promote US-South Africa trade and investment and committed the US administration to a major role in uplifting black South Africans and creating a broad managerial and entrepreneurial class among blacks.
``Our presence here has helped to bring black and white South Africans together and to get them communicating,'' Brown said. ``The most important bonds that have to be formed are economic bonds between South Africans.''
The high point of Brown's visit was the signing with Finance Minister Derek Keys of an Overseas Private Investment Corporation agreement, which provides political risk insurance for US fixed investment in the country.
``This is a very significant step,'' says Johannesburg economist Graham Bell. ``It lowers the risk premium substantially for US investors.''
Business Day, the authoritative financial daily, reported Wednesday that more than 20 countries - including France, Germany, and Japan - were likely to follow the US example by signing investment protection and incentive agreements.