Sanctions Would Backfire--Reagan : Could Deepen S. Africa Crisis, President Warns

President Reagan held fast to his embattled policy for South Africa on Tuesday, rejecting economic sanctions against the white-minority regime and warning that such punitive measures would deepen that country’s racial crisis and destroy America’s diplomatic leverage.

In his first formal address on the subject in almost a year, Reagan urged South Africa to free all political prisoners--including long-imprisoned African National Congress patriarch Nelson Mandela--and set a timetable for ending apartheid.

Sanctions Effect on Blacks

But, in a somber 25-minute address to members of the World Affairs Council and the Foreign Policy Assn. in the East Room of the White House, he also declared that the primary victims of an economic boycott “would be the very people we seek to help. Most of the workers who would lose jobs because of sanctions would be black workers. We do not believe the way to help the people of South Africa is to cripple the economy upon which they and their families depend for survival.”

Thus the President, who two months ago ordered a review of his South African policy, offered no new initiatives to deal with what one senior Administration official described in a White House briefing Tuesday as “an impending catastrophe” and some specialists fear could become a bloody war between the white-minority government and South Africa’s black majority.

In Congress, many conservative Republicans as well as liberal Democrats reacted with anger and disappointment, vowing to pass legislation forcing the President to impose stiff new economic sanctions.

Senate Foreign Relations Committee Chairman Richard G. Lugar (R-Ind.) predicted that his committee within days would draft a bill prohibiting landing rights for South African commercial airplanes, freezing the bank assets of South Africans in American banks and placing limits on U.S. visas for South Africa’s white elite.

“I had hoped that the President would take this occasion for an extraordinary message to the world. He did not do so,” said Lugar, clearly stunned that Reagan had ignored the advice of a majority of Senate Republicans who favor sanctions.

Sen. Lowell P. Weicker Jr. (R-Conn.) predicted that a tough sanctions measure would pass Congress with enough support to override a presidential veto. “Any bill that passes the Senate is going to be tough and any veto is going to be overridden,” he said. “There is a deep embarrassment on behalf of Democrats and Republicans about how this government is behaving.”

In a sharply worded Democratic response to the speech, Pennsylvania’s Rep. William H. Gray III, the black chairman of the House Budget Committee, said Reagan’s address amounted to making the United States and Britain “co-guarantors of apartheid.”

By standing pat on his conciliatory policy of “constructive engagement,” Reagan not only rejected the advice of Senate Republicans but also brushed aside counsel from some White House aides that delivering a speech that did not include significant policy changes would needlessly incense Congress.

While Reagan broke no policy ground in his speech, a senior Administration official briefing reporters before the speech announced what could be a significant shift. He said that American officials should be willing to meet with leaders of black opposition groups, including the outlawed African National Congress.

An Apparent Contradiction

The official’s comments, made on condition that he not be named, appeared to contradict Reagan. In his speech, the President accused the congress of fomenting violence and communism and said that South Africa is under no obligation to negotiate with any organization that proclaims a goal of creating a Communist state “and uses terrorist tactics to achieve it.”

Pretoria has refused to negotiate with the African National Congress unless it first renounces violence, and, at least until now, so has the United States. Last month, British officials, who have been pushing for a negotiated settlement of the crisis, met in London with ANC leader Oliver Tambo, but American officials then were noncommittal on whether they would recognize the group.

The Administration official told reporters: “We believe that it is well for the government of South Africa--if progress is going to be made--for them to meet with black groups and certainly with the African National Congress. Certainly we should be willing to meet with them and I am.”

In his speech, Reagan said that with U.S. bank loans and investments in South Africa already drying up the United States has reached “a critical juncture” in its approach to that country’s problems.

‘Clamor for Sanctions’

“Many in Congress and some in Europe are clamoring for sweeping sanctions against South Africa,” he declared. “The prime minister (Margaret Thatcher) of Great Britain has denounced punitive sanctions as ‘immoral’ and ‘utterly repugnant.’ Let me tell you why we believe Mrs. Thatcher is right.

“As one African leader remarked recently: Southern Africa is like a zebra,” Reagan said. “If the white parts are injured, the black parts will die, too.”

Reagan condemned the government’s state of emergency as going beyond the law and “sweeping up thousands of students, civic leaders, church leaders and labor leaders, thereby contributing to further radicalization.” Groups monitoring action under the emergency declaration report that about 5,000 people have been taken into custody and detained without trial.

Reagan’s reiteration of the policy he has followed with little change since taking office more than six years ago comes at a time of mounting crisis in South Africa. With violence increasing, international businesses--including U.S. firms--have been deserting South Africa at a rapid pace.

Yet, Reagan called for more, not less, economic involvement there. To achieve a progressive new South Africa, he said, “we need not a Western withdrawal but deeper involvement by the Western business community as agents of change and progress and growth.

“The international business community needs not only to be supported in South Africa, but energized,” he said. “We will be at work on that task. If we wish to foster the process of transformation, one of the best vehicles for change is through the involvement of black South Africans in business, job-related activities and labor unions.”

Herbert Beukes, South Africa’s ambassador to the United States, praised Reagan’s speech as “a compelling case for a Democratic South Africa,” and said that his country shares the President’s objectives. But the ambassador expressed disappointment that a high-ranking official had said that Secretary of State George P. Shultz has expressed a willingness to meet with leaders of the African National Congress.

Ambassador Mystified

Pointing out that in his speech Reagan had linked the congress to terrorism and mentioned Soviet support for it, Beukes said he was mystified about how an Administration official could call for meeting with the group’s leaders when the President was accusing them of promoting communism and terrorism.

Reagan, while calling for the release of Mandela in his speech, made only two references to the African National Congress itself, criticizing it for fostering violent opposition to the South African regime.

At one point he criticized “the calculated terror by elements of the African National Congress: the mining of roads, the bombings of public places, designed to bring about further repression, the imposition of martial law, eventually creating the conditions for racial war.”

Condemns Violence

And while condemning South African government forces for repeatedly attacking opposition forces in neighboring countries, he added: “Also the Soviet-armed guerrillas of the African National Congress--operating both within South Africa and from some neighboring countries--have embarked upon new acts of terrorism inside South Africa. I also condemn that.”

Reagan, declaring that American policy must be coordinated with Western allies to be effective, said he fully supports Britain’s current efforts to settle the crisis through negotiations and pointed out that Shultz already has begun intensive consultations with the allies.

He said he has directed the secretary of state to study America’s assistance role in southern Africa to determine “what needs to be done, and what can be done to expand the trade, private investment and transport prospects of southern Africa’s land-locked nations.”