S. Africa--the Boon and Bane of Its Region

When leaders of 12 southern African nations gathered on a stage here Monday to open a regional summit, Nelson Mandela stood out--and not just because South Africa’s leader alone wore a colorful batik shirt instead of a somber suit and tie.

His country’s $120-billion gross domestic product is four times the combined total of the 11 other countries of the Southern African Development Community.

Therein lies the promise--and problem--for 130 million mostly poor people in the vast, resource-rich region that stretches south from Tanzania.

Shunned and vilified for decades because of Pretoria’s apartheid regime, South African corporations, businessmen and entrepreneurs have invested far and wide in the 16 months since the country’s first democratic elections brought open borders, political stability and economic opportunity.

South Africans have built, or signed deals to build, hotels in Zambia, supermarkets in Zimbabwe, breweries in Botswana and Lesotho, a shopping mall in Mozambique and much more. Cross-border cooperation has begun for banking, tourism and television.

South African goods, from textiles to pharmaceuticals, are flooding north, filling stores from Malawi to Namibia. A few enterprising companies have even won lucrative contracts to remove millions of deadly land mines in Angola and Mozambique that South African soldiers or their allies once planted.

“A few years ago, you couldn’t buy anything in the shops here,” said a resident in Lusaka, the capital of Zambia. “Today, we’re all learning Afrikaans off our cornflakes boxes.”

But government officials, diplomats and businessmen in those countries say that the trade--and the benefits--have been lopsided. They complain, for example, that moldy cornflakes and other shoddy goods are being dumped.

More important, South Africa has yet to knock down high walls of import tariffs and protectionist laws first erected to protect a non-competitive, highly regulated economy under apartheid.

Last year, South Africa exported eight times as much to the region as it imported from those far weaker economies.

Resentment is growing.

“Eventually, South Africa has to be the engine of growth for the region,” said a Western ambassador in Lusaka. “But it will take some time. And in the meantime, the political bitterness toward South Africa is very real. There’s fear that giants take and don’t give.”

Most of Zambia’s economy, for example, is based on its giant copper mining industry. “Zambia can hardly get its copper wire into South Africa because of its cartels and protectionism,” the diplomat said. “So much for regional economic cooperation.”

Zambian businessman James Luhana, marketing manager of the Chilanga Cement Co., agreed. He complains that South African companies are undercutting his prices, and he fears neocolonialism by white South Africans in the guise of free trade. “South Africa has 14 cement factories,” he said. “We have two. We cannot compete.”

South Africa has an obvious incentive in spurring regional growth. Now that deadly voltage no longer flows through an apartheid-era electric fence on the border, illegal immigration has exploded as citizens of some of Africa’s poorest countries flock to its richest one.

The attraction is obvious. The average South African earns 36 times more than someone from neighboring Mozambique, where annual per capita income is about $80.

And not only the poor are coming. Other African nations now complain of a severe brain drain, with desperately needed doctors, engineers and other professionals moving south.

Southern Africa is at peace for the first time in decades. In Angola, the region’s last and oldest civil war has sputtered to a halt under a cease-fire crafted in November. About 7,000 U.N. peacekeeping troops are supposed to be deployed in Angola by the end of September, the precursor to disarming rebel troops and starting a government based on power-sharing.

Mandela, so far, has refused to send peacekeepers to Angola, or anywhere else for that matter.

But Ronnie Kasrils, a deputy defense minister, says pressure is growing--from the military among others--for more military involvement in Africa.

Except for the tiny kingdom of Swaziland, every other country in the region has now embraced some form of multi-party democracy. Civil liberties, press freedom and human rights vary widely, and corruption is often endemic. But the strangling policies of socialist economies and authoritarian regimes have mostly faded from the scene.

In their place have come painful programs of structural adjustment backed by the World Bank and International Monetary Fund. Although the policies have sent prices soaring for food and other basic goods, most nations in the region are reducing tariffs, liberalizing currency controls, privatizing state-owned industries and, in theory anyway, embracing open markets.

But critics say South Africa, the neighborhood giant, isn’t moving fast enough. It retains one of the most closed economies in the region.

Mandela’s government has accepted the principle of free trade, in keeping with its commitment to the General Agreement on Tariffs and Trade, or GATT, but has set no timetable to actually cut steep import duties. So it still imposes a 90% tariff on the import of Zimbabwean textiles, for example, although it has free access to markets there.

“We have to be very careful that free trade is a staggered process,” explained Kader Asmal, South Africa’s minister of water affairs and forestry. “Otherwise, infant industries in smaller countries will go up the chimney.”

Asmal attended the daylong summit Monday for the signing of the economic bloc’s first treaty--its first major accomplishment--since it was created in 1980 in an attempt to isolate South Africa’s apartheid regime. The treaty will govern use of shared rivers and other water systems.

An additional accord was expected to facilitate buying and selling of electric power among the states in the community. A separate agreement would be signed with Zaire for access to power generated by that country’s huge Inga Dam.

The community members are Angola, Botswana, Lesotho, Malawi, Mozambique, Namibia, South Africa, Swaziland, Tanzania, Zambia, Zimbabwe and Mauritius, which was admitted Monday.

South Africa joined last year and is hosting the summit for the first time.