Despite the wall of silence surrounding Gerhard de Kock's emergency mission to western financial capitals, it is increasingly apparent that the governor of South Africa's central bank has little room to maneuver in his talks with senior bankers and monetary officials.
The options facing de Kock, which include the once unthinkable prospect that South Africa might halt payments on its short-term debts, are unlikely to improve -- whatever financial measures are announced in Pretoria to shore up confidence in the economy.
Equally apparent, according to bankers and analysts who have been following the situation closely, is that the top South African leadership may not have been aware of the extent to which political considerations are overriding what previously would have been interpreted as a solely economic crisis.
This view is widely shared among bankers and analysts in Britain and the United States, where de Kock has sought relief from his country's obligation to repay about $12 billion in debts maturing within 12 months.
The crash of South Africa's currency has shocked its business community into realizing how vulnerable apartheid has left the economy. Details on Page A30.
The paradox confronting de Kock and his international bank creditors is that South Africa has a strong economic base that is being undermined politically at home and abroad. It is a paradox that makes any solution to South Africa's debt problem complicated and throws into question whether the expected package can have more than short-term effect unless it is accompanied by changes in the country's system of white-minority rule.
South Africa's business leaders clearly have grasped this point. As Anton Rupert, head of the giant Rembrandt agriculture and mining conglomerate, said: "Time has run out. This is the government's final opportunity to correct past wrongs and introduce the sort of reforms the country is strongly signaling it needs so urgently."
Such comments can only reinforce prevailing sentiment among western bank creditors and monetary officials that any internationally coordinated rescue package is out of the question, informed analysts said.
Back in South Africa, when he scheduled meetings in London and New York, de Kock might not have been fully aware of the significance of this convergence of political and financial factors. This weekend, as he ponders his talks with the governor of the Bank of England, Robin Leigh-Pemberton, and senior officials at Citibank in New York, it is a message that he will be hard pressed to ignore before he enters the next round of discussions with Federal Reserve Board Chairman Paul Volcker and senior State Department officials.
Bankers and analysts point out that the traditional escape routes for debtor countries do not apply to South Africa. In the past, particularly with the recent problems associated with Latin American debtor nations, it has proved possible to construct an internationally coordinated rescue package. Such rescues usually have involved the world's key monetary authorities, such as the Federal Reserve and the Bank of England, acting as an honest broker while the international banks worked together to find a solution for repayment of debt.
While neither the Bank of England nor the Federal Reserve can afford to turn a blind eye to the South African debt problem, they are wary of becoming involved. The consideration is primarily political: In light of strong public opinion, no one wants to be seen taking steps to prop up apartheid.
Equally, any hopes that de Kock might have of securing a new credit line from the International Monetary Fund are likely to be disappointed, according to bankers in London and New York. This is entirely unconnected with South Africa's ability to repay such a loan. (South Africa has repaid on time installments due on a $370 million IMF loan , of which about $110 million is still owed). Again, it is intimately bound up with political considerations.
Such is the composition of the 22-member IMF board, with its black African and western representation, that it would hard to secure a vote in favor of bailing out South Africa. Bankers familiar with the IMF said during the past two days that the United States and Britain, which carry considerable weight, are unlikely to argue in support of South Africa. "It's just too hot a political potato to handle," one said.
There is a second, more technical point. IMF loans often are tied to demands for major changes in the way the debtor's economy is run. Mexico, for example, had to make deep cuts in public spending to secure IMF loans. Few bankers contacted in London or New York believed that the IMF wishes to become involved in constructing an austerity program in a country where the economy is so bound up with the system of apartheid.
The options facing de Kock therefore appear to narrow down to some form of agreement by the banks to provide new money or to give the South African government and its five major banks a breathing space.
All the signs indicate that the banks are reluctant to put up new credit lines. American banks, for example, withdrew $500 million in the first quarter of this year and another $500 million in the second. It was their refusal to extend new credit, primarily on political grounds, that touched off the short-term debt crisis this month. British banks, which are owed more than a quarter of the $12 billion debt falling due in the next 12 months, are also unwilling to make new loans, although several West German bankers expressed more confidence.
An official at Commerzbank, West Germany's third-largest bank, said the situation was not threatening. "South Africa has been and will continue to service its foreign debt. There's no question of default, but there's no talk of fresh loans. The problem is in refinancing existing credit."
De Kock, in his talks with American banks, will have to work out what to do if new credit is blocked. The only response in that case, informed analysts said this weekend, will be a delay in repayment.
On the face of it, that would cast South Africa as a defaulter. But in fact, the language on both sides in the event of such a development is likely to be a good deal more polite, with South Africa proclaiming its willingness to pay and stressing the underlying strength of its economy. The scene, therefore, is set for protracted negotiations between South Africa and its international creditors. De Kock's whistle-stop tour of western financial capitals may not be the last he will make in the next few months.