American firms ready to stay

Press, 10 August 1985, Page 10

American firms ready to stay

NZPA-AFP Washington Most of the 350 American companies doing business in South Africa have no intention of withdrawing or even of cutting down on their activities, despite growing political violence say most analysts in Washington. Commercial and financial sources said that the American firms were calculating what the political situation would be in five to 10 years, as part of a long-term strategy to ensure optimum defence of their interests.

That would appear to

mean promoting their image among black leaders while trying to distance themselves from the authority of the white minority, the sources said. Direct investment by American companies in South Africa stands about SUS 2.3 billion ($4.37 billion). Most of th 6 firms adhere voluntarily to a non-racial code of conduct for their workers drawn up by a black American pastor, Leon Sullivan. The companies say that their approach contributes

to progress, and that a pullout would aggravate the lot of blacks and increase unemployment. A spokesman for International Business Machines, the world’s biggest manufacturer of computers, said yesterday that 1.8. M. would stay in South Africa because it could contribute to change. It employs 1914 people there. With its rival, Apple, 1.8. M. refuses to sell equipment to the South African Army and the police because it could be used for

repression, but the Education Ministry is free to buy.

Chase Manhattan Bank said a week ago that it would stop making new loans to businesses and financial houses in South Africa, but analysts said that the decision was far from signalling a significant reduction of its interests.

It is keeping all its branches there. Its total local loans of SUS4OO million ($760 million) were only 0.7 per cent of the

$U560.79 billion ($115.5 billion) lent world wide by that bank, the sources noted.

The Investor Responsibility Research Centre commented that that proportion was widely the same for all the American companies. Their South African investments were on average just 1 per cent of their worldwide business, it said.

Citicorp, for its part, is continuing to lend to the private sector, but not to the public one.