DECEMBER 1983 - VOLUME 4 - NUMBER 12
South Africa: A clash of viewpoints
"The record of U. S. corporate citizenship in South Africa, though not perfect, is clear and impressive. Our firms have been pacesetters for change. Those in the U. S. and other Western nations who would have our firms disinvest would... assure America's irrelevance to South Africa's future. "
- Lawrence S. Eagleburger, Undersecretary of State for Political Affairs
"Some say that if (U. S. multinationals) get out of South Africa others will invest. I want to say very respectfully that the moral turpitude of that argument is breathtaking. It's like saying, `Hey, your wife is going to be raped and if I don't someone else is waiting. ' "
- Bishop Desmond Tutu, Secretary General of the South African Council of Churches
- contributed by James Cason
Reagan wins on IMF
In the last hours before adjournment until January 1984, Congress approved $8.4 billion in additional U.S. funds for the International Monetary Fund. The final legislation gutted an anti-apartheid provision that had passed the House last summer, which would have required the U.S. to vote against IMF loans to South Africa. The law will permit the U.S. to support IMF loans to South Africa as long as the Secretary of the Treasury makes a finding, no matter how spurious its reasoning, that the loan will help reduce "artificial constraints on worker mobility."
The-House leadership coaxed liberal representatives, including members of the Black Caucus, to vote overwhelmingly in favor of the IMF bill by tying it to a major housing authorization bill. Without the link to housing, the House would have most likely defeated an IMF bill with its weak anti-apartheid provision.
The $8.4 billion in additional U.S. funds is part of a plan to increase IMF financial resources by $43 billion. President Reagan has argued that increased funding for the IMF is necessary to manage the debt crisis of developing nations. Yet, the IMF legislation sidesteps the key debt issue-the need for banks to give interest rate relief on outstanding loans and to grant new loans. "Without reform of private bank policies, the IMF can do little to arrest the downward spiral of debtstrapped developing nations, especially in Latin America, and the decline of U.S. exports to those countries," says Jon Brown, a banking expert with the Public Interest Research Group.
Brazilian hunger feeds anti-IMF, anti-U.S. feeling
Two-thirds of the Brazilian population eat less than the minimum number of calories considered necessary for survival, according to the Brazil National Security Council and the Ministry of Agriculture. The U.N.'s World Health Organization reports that every 20 minutes a child dies of hunger in Brazil. And union studies show that a liter of milk costs an average Brazilian worker a whole day's pay, while a kilo of black beans costs two days' pay.
These grim statistics were cited by Brazilian professor Maria Helena Alvez, an advisor to church and labor groups in Brazil, at a Capitol Hill forum on the Third World debt crisis and the IMF held in early November. Although Brazil is haunted by severe depression and hunger, the IMF is calling on the government to further cut food subsidies and other social programs. "Just what does the IMF think it can possibly accomplish?" Alvez asked.
The Brazilian government, using the IMF as a shield, claims it is forced to either adopt such harsh policies or face bankruptcy. By shifting the blame, Alvez said, the government has helped whip up strong sentiment in Brazil against the IMF - and the U.S.
"If you ask Brazilian workers and people on the street, you find that they associate the IMF with the U.S. government," she said. "Very few of them know the IMF is not just the U.S. Thus the antiAmerican feeling in Brazil this year is incredibly high."
Another cheap imported item has U.S. manufacturers ready to declare trade war: Italian pasta.
At this point, it is only a few spaghetti strands on American plates that the producers are quibbling over. Imports account for only five percent of the total $1 billion U.S. pasta market, but Italian imports have increased dramatically in the last few years - fivefold since 1980. Besides its snob appeal, Italian pasta is cheaper by as much as $.17 a pound on American shelves.
The National Pasta Association filed suit with international trade authorities last year to try and prevent Italians from eating away at the U.S. market. The Americans say that Italians can undersell U.S. competitors because they are subsidized by the European Common Market. Declaring pasta a processed agricultural product, the Americans claim the subsidies are illegal under international trade law, which prohibits subsidies for processed food. The Italians argue that pasta is mainly wheat, and that most of the wheat is imported from the United States anyway. While trade authorities have indicated support for the U.S. position, discussions are continuing.
"It is in our national interest to benefit from the case," says Paul Cullen, an attorney representing the National Pasta Association.
One small step for Japan....
Japan's second largest military and space consortium has been chosen by the U.S. National Aeronautics and Space Administration (NASA) to participate in a new space station planned for the 1990s. Nissan Motor Cempany, Hitachi, and Fuji Heavy Industries will combine their technological skills with a number of U.S. firms to "jointly develop and produce space shuttles and material testing facilities for NASA," according to the Japan Economic Journal. The Japanese National Space Development Agency has also agreed to cooperate in the station, which will orbit the earth carrying up to eight scientists.
The agreement strengthens the ties between the Nissan consortium and Martin Marietta, the Maryland-based aerospace company that manufactures NASA's Titan rockets and the fuel tanks for the current space shuttle. Last year the two companies signed an agreement to jointly develop rocket technology. But NASA's decision to pick Nissan, Hitachi, and Fuji comes as a blow to Japan's largest space and defense contractor, the 17-member Mitsubishi group, which had lobbied hard for the contract.
In a related development, the U.S. and Japanese governments agreed to a framework for the transfer of military technology to the U.S. on the eve of President Reagan's visit to Tokyo last month. Under the terms of the agreement, the two governments will form a Joint Military Technology Commission to oversee all transfer requests.
The announcement came after nine months of negotiations, and represents a major concession by Japan, which had wanted to reach separate governmental agreements on each transfer request. The agreement also requires an exception to Japan's constitutional ban on arms exports-a highly controversial topic in Japan.