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. In addition, companies are setting up sales offices instead of manufacturing facilities. This is a relatively inexpensive way to judge the political and economic climate.
Mr. Moses says, however, that there has also been some new investment in South Africa, such as a new Hyatt Regency in Johannesburg; a new airline, US Africa Airways; and investments by Apple Computer and Reebok. On Monday, Pepsi-Cola International announced a $15 million bottling venture with a group of African-American investors, including basketball star Shaquille O'Neal and actor Danny Glover.
``What I find interesting is the range of opinion with some companies saying they want to be a catalyst for change and others, such as Texaco, saying that now that South Africa has elections, it is no different than Indonesia or any other country in which it makes investments,'' says Tim Smith, executive director of the Interfaith Center on Corporate Responsibility in New York.
DESPITE the change in government, there are risks associated with investing in South Africa. ``Violence is a key factor; you don't want to start a factory in a violent society,'' says Myra Alperson, the author of a recent white paper for The Conference Board, a New York-based business organization. ``There are good opportunities there, but one should be very careful about assessing the market and should make alliances with companies already there.''
South Africa is also experiencing some labor problems with strikes breaking out during the last several weeks. ``It is a time of testing,'' Ms. Alperson says.
And, finally, there is a certain amount of political uncertainty relating to Mandela's age and health. Part of Mandela's tour is to try to put to rest some of those concerns.