Background Briefing by Senior Administration Officials

The Briefing Room

4:39 P.M. EDT

SENIOR ADMINISTRATION OFFICIAL: We really wanted to give you an opportunity to ask any questions you might have about the elements that were announced by President Clinton and President Mandela during the course of their press conference.

Perhaps to launch us, though, I can tell you that one of the central topics of discussion, particularly with the Vice President this morning over breakfast, was the creation of the U.S.- South Africa Binational Commission to be jointly chaired by Deputy Executive President Thabo Mbeki and by Vice President Gore.

We regard this as being the centerpiece in many respects to our bilateral relationship, in that it will provide a mechanism to bring together the resources of our government with those of the South African government in defining ways to make most effective use of the resources that are being made available in our bilateral aid program -- the $600 million over three years that the President previously announced and which was alluded to today; but will also be the mechanism in association with the U.S.-South African Business Development Council, previously announced by Secretary Brown and Minister Trevor Manuel, will also be the mechanism for assisting in the development of business relationships between the U.S. and South Africa and the generation we hope and indeed expect of substantial private sector involvement in South Africa's development and in support of its reconstruction and development program.

In addition to that, and we can talk more about the ideas for the council, for the commission let me say that this is a matter that is still under discussion between our two governments, defining the areas of emphasis and focus. But the principle has been agreed. We hope that sometime in the near future, within the next few months, that it will be possible for the two Vice Presidents to meet and to complete the discussion of the details and to formally launch that commission.

Another item that I would draw your attention to is the US AID's Southern African Enterprise Development Fund. My colleague can address that in greater detail. It does represent a new element in our assistance for South Africa and for the entire Southern African region. The initial capitalization of that fund, as the President mentioned, is $100 million. And the primary objective is to stimulate the development of small and medium-sized enterprises and to make capital available to those enterprises for their activities.

Q: Sir, excuse me, is that part of the $600 million, then?

SENIOR ADMINISTRATION OFFICIAL: That is over and above the previously announced $600 million package over three years.

Q: And how much more additional new money is there over --

SENIOR ADMINISTRATION OFFICIAL: I'll tell you what -- I'm going to defer those questions to the expert on that particular issue.

Let me also refer to something the President --President Clinton mentioned -- namely, our great encouragement from the South Africans for an intensive cooperation with respect to anti-drug matters. As you know, Lee Brown recently visited South Africa. That visit produced a substantial area of agreement on activities in the future. And let me stress here that on both sides there was a recognition of the need to extend that cooperation and that collaboration throughout the Southern African region. And, as you may know, the members of the Southern African Development Council, SADC, have already discussed how they would enlarge their cooperation with respect to anti-drug matters, and we look forward to being a part of that cooperation.

And last, but certainly not least, the agreement on the launching of a Peace Corps program in South Africa to begin in 1995. We see this on two levels. The first is the direct involvement of U.S. Peace Corps volunteers and the discussions about those areas of cooperation are already underway.

The second is in response to a South African request that we assist them in defining -- elaborating -- a program for a South African volunteer organization that would help mobilize the skills and talents of young South Africans in responding to South Africa's development needs.

I think beyond that, let me say, the context of these discussions has been one of cooperation between the United States and South Africa, not merely in a bilateral context, but in a regional and in a global context. And I think the comments by both Presidents underscored that. We had extensive discussions about how we could increase our cooperation in dealing with problems in the immediate Southern Africa subregion, building on the efforts that have already been made with respect to Mozambique and Angola.

Beyond that, however, there was discussion of how our cooperation could be used as a foundation for initiatives that would affect the entire African continent. And I would expect that in our future discussions that would become a major focus of interest.

And lastly, as the discussion of Haiti suggested, there is recognition that our cooperation extends, indeed, well beyond the African continent.

To underscore what I said the other day, this is for us a very important relationship. And I think the President, both Presidents, wanted to underscore that, certainly from our side, that because we believe that this is a relationship to which the South Africans bring a great deal and where we have many areas of potential cooperation.

I'm going to end my remarks there and ask my colleague if he would say a little bit more in more detail about the aid side of this.

SENIOR ADMINISTRATION OFFICIAL: Thank you. I thought I would talk a little bit more about the $600 million, three-year aid package, and then make a few brief remarks about the Southern Africa Development Enterprise Fund.

In terms of the $600 million package, it's a three-year package over the period Fiscal 1994 through Fiscal 1996. About $528 million of this package comes from US AID resources. And the assistance is essentially aimed at providing assistance in three broad areas which also represent high priorities of the new government's reconstruction and development program. This includes private sector development, focusing on job creation, infrastructure development. This is about $268.6 million of that package. This includes housing investment guarantees, infrastructure improvements such as electrification and credit and training for small disadvantaged owned and operated businesses, and also training for marginalized youth, particularly youth in the townships.

There is about $126.4 million of this package that will be used to support programs in democracy and governance. As you heard, President Mandela mentioned in his remarks his appreciation for assistance that the U.S. is providing with the restructuring of the judicial system in South Africa. Before President Mandela left, he and Ambassador Lyman signed a $9 million assistance program to support the restructuring of the Ministry of Justice $9 million assistance program to support the restructuring of the Ministry of Justice.

We're also providing -- will be providing about $133 million in education and health activities. The health activities will represent a new area of involvement for us, focusing on child survival, family planning programs. And we'll be looking to expand some activities that we have already been engaged in in HIV-AIDS prevention.

In education we'll continue involvement in nonformal education programs, support for basic education, especially in the area of education policy development. And also we will be engaging -- continuing our engagement in supporting tertiary or post-secondary education activities in South Africa.

Q: But why did Clinton say $30 million in health and $50 million in education? Is that under this $133 --

SENIOR ADMINISTRATION OFFICIAL: Right. The figures that I quoted you are figures that span a three-year period. And those figures are not necessarily going to be precise. We will have to continue to work this program with the new government and make sure that we are reflecting their priorities. But they are approximate figures in terms of the package.

Q: For those of us who aren't quite as adept, are these written --

SENIOR ADMINISTRATION OFFICIAL: There will be a fact sheet coming out within a question of a half hour, maybe.

Q: numbers he gave --

SENIOR ADMINISTRATION OFFICIAL: -- most of these numbers, yes.

Q: Will it have Clinton's numbers --

Q: confusion about how much money extra in addition to the $600 million that is going to be coming from this trip. To this gentleman's question before, can you please give me some sort of figure on that?

SENIOR ADMINISTRATION OFFICIAL: Like what --

Q: How much extra money --

Q: Is any of it in addition -- Q: talking about the existing package. What's new? Q: Yes, what's happened from this trip? Q: what was announced today, what's new? Is it

$100 million, $200 million total or --

Q: Is any of it in addition to the $600 million that was already planned -- additional?

SENIOR ADMINISTRATION OFFICIAL: The aspect of the package that is new would be the Southern Africa Development Enterprise Fund that was mentioned by the President. This is a regional fund that will provide approximately $100 million over a five year period to support small and medium enterprise development within the Southern Africa region.

Now, of this fund, about 50 percent of these resources will be directed toward South Africa. I might add that in addition to this $100 million figure, we are hoping that we will be able to encourage through our leadership, other donors to engage in activities that would support the small and medium-size sector as well. And, we're also hoping that through the provision of these resources, we will be able to leverage and encourage financial institutions in the region, particularly in South Africa and Zimbabwe, to a lesser extent, to become more engaged in lending to this sector.

Q: Effectively, in terms of new assistance from the United States government directly to South Africa, Mandela came away empty.

SENIOR ADMINISTRATION OFFICIAL: Oh, absolutely not.

Q: Well, would you tell us where he did not -- where he got something more than was announced last night?

SENIOR ADMINISTRATION OFFICIAL: First of all, the Southern African Enterprise Development Fund -- half of that assistance will go directly to South Africa. So even if you're just counting that, that's a total, perhaps, of $50 million over the next five years.

Q: Is that in U.S. government money, or is that --

SENIOR ADMINISTRATION OFFICIAL: Oh, absolutely. That's all US AID money to support that program.

Q: What is this to be used for?

SENIOR ADMINISTRATION OFFICIAL: That's going to be used to support new small- and medium-sized enterprises within Southern Africa. It will also be used in part to finance additional money. So that money will be leveraged to provide additional funds for the region. And one of the things that Andy Young is going to be doing in his new job is generating additional capital, based on the guarantees and the up-front money that they will be providing.

On the fact sheet that you'll get, it also mentions a whole variety of other programs that various U.S. government agencies are exploring with regard to South Africa. And the President referred to some of those. If I can just go through a few of these. Based on the Vice President's breakfast this morning with President Mandela, it became very clear that there is an excitement about getting involved in South Africa among our entire Cabinet. And speaking very frankly, there were programs that various Cabinet Secretaries are involved with in South Africa that we were not even aware of. And this comes from their own initiative, their own excitement about getting involved in the country.

We are aware of the ones I'm about to describe, let me assure you of that. (Laughter.) As the President said, Mike Espy had just returned from a visit -- actually, he went to the inauguration and stayed on. And he is developing a program to assist extension and rural development services within South Africa. He's involved with a program to support feeding programs in South Africa, school feeding programs, which may, in fact, end up feeding 680,000 schoolchildren in South Africa.

Our Science Advisor, Dr. Gibbons, talked extensively about science and technology cooperation. And in fact, there is a group that will be going out to South Africa involving virtually every U.S. government department involved in science and technology within a few weeks to develop new programs there.

Ron Brown, as you're aware, has put together his U.S.- South African Business Development Committee, which consists in part of 20 leading industrialists on each side who are trying to develop new programs to enhance trade and investment on both sides.

Energy Secretary O'Leary is developing a whole series of programs to support energy cooperation, including a focus on renewable energy. All of these programs involve substantial additional cooperation. We can't put a dollar figure on it right now. The fact sheet that you will get walks you through a number of these.

Moving topics just a bit --

Q: Could you just clarify what President Clinton was talking about when he referred to $500 million of housing loans?

SENIOR ADMINISTRATION OFFICIAL: We have already -- I guess it was several weeks ago -- put together a fund which will finance, when leveraged, about $225 million worth of capital to support housing projects in South Africa. This uses $75 million worth of guarantees, which then goes out into the market and usually it produces twice that amount in terms of private capital.

That was $225 million; we just announced another program of the same size. So it's about $450, but it's actually a multiplier effect of about $2.2 or so.

Q: The money that the government puts out is how much?

SENIOR ADMINISTRATION OFFICIAL: The money that the government guarantees is $150 million.

Q: government's guaranteeing that.

Q: What's the budgetary impact of that?

SENIOR ADMINISTRATION OFFICIAL: The budgetary impact depends upon --

Q: defaults on a loan.

SENIOR ADMINISTRATION OFFICIAL: The default on loans. The budgetary impact also depends upon what the specific projects they get involved in.

Q: So there's no deficit -- I mean, excuse me, there's no fiscal year cost for --

SENIOR ADMINISTRATION OFFICIAL: Yes, there is a fiscal year cost, but it isn't defined yet. It's based upon what the projects are.

Q: Is AID, this money?

SENIOR ADMINISTRATION OFFICIAL: Yes, this is AID money.

Q: So this again is part of the $600 million?

Q: Guaranteed lenders, are they going to be the American banks, is it U.S. government? Who is the --

SENIOR ADMINISTRATION OFFICIAL: In the initial instance to get you to the $75 million, it's American banks. To get you to the $250 million, it leverages essentially through the South African markets. I've got an expert here -- my colleague -- so I'm going to be looking at him frequently.

Q: And this is part, again, of the $600 million, the original $600 million --

SENIOR ADMINISTRATION OFFICIAL: That is part of -- but, the $150 is what's part of the $600 million. We have tried as hard as we can not to try and inflate these numbers. We could have easily said that since that $150 million leverages another $350 million, that instead of a $600 million aid package, we have a $950 million aid package. But we thought we would be a little more stringent upon ourselves.

If I can just take one moment and talk a little bit about the dynamics of the meetings that took place over the last couple days

Q: I just want to clarify one more thing --

SENIOR ADMINISTRATION OFFICIAL: Please.

Q: It's the $150 million for loan guarantees is for -- just for housing construction?

SENIOR ADMINISTRATION OFFICIAL: Right. And there is another $50 million of loan guarantees for electrification of the townships as well.

Q: how much?

SENIOR ADMINISTRATION OFFICIAL: $50 million

Q: But this was all part of the --

Q: part of the original package?

SENIOR ADMINISTRATION OFFICIAL: Absolutely. Yes.

Q: $100 million for the regional unit is what's new today?

SENIOR ADMINISTRATION OFFICIAL: In addition to the -- for example, the costs of the Peace Corps volunteers are not included in the $600 million.

Q: round figure on --

SENIOR ADMINISTRATION OFFICIAL: We don't know yet, because we don't know how many there will be. And that's part of the difficulty of putting a number of the increases related to the announcements or the agreements that were negotiated over the last couple of days.

What I wanted to say about the dynamics were essentially that the two Presidents had built up over the course of the last year and half an outstanding relationship. As I've said before, they talk every couple of months; they exchange cables; they exchange letters. And the meeting that we had 15 months ago here at the White House between the two Presidents built a very solid foundation, along with the trip that the President then took to go to Philadelphia to deliver the Freedom Medal there.

Again, for the President, President Mandela represents two of the great trends that the President cares deeply about -- the first being the transition of societies, such as in Russia and Eastern Europe, towards national reconciliation. As he's said on a couple of occasions, he believes South Africa represents a stern rebuke to the cynics of the world. And the second great trend is the move toward racial harmony. And again, I've said before this was one of the factors that impelled the President into politics in his childhood, to overcome segregation in his own neighborhood and state. And again, Nelson Mandela represents that to him.

The reason I think there was the excitement that we've had over the course of the last few days here relates to the broad sense of ownership that we all feel over what has gone on in South Africa. I've said in the past, every American student who protested his or her university's involvement in South Africa; every stockholder who lobbied to get their corporation out of South Africa; any American corporation that stayed in South Africa because they believed that that was the best way to fight apartheid -- to create jobs, to overcome racial discrimination; the pension fund managers who decided not to invest in South Africa; the members of Congress who allowed themselves to be arrested outside of the South African Embassy; the African Americans who, in their churches on Sunday, for years and years finished the service saying, "Free Mandela" -- all of these people feel an ownership over this issue, and it is one we are trying as hard as we can to foster because ownership means involvement and commitment, which we felt over the course of these last two to three days was an ownership, a commitment as well as a reverence for the changes that we've seen there.

Q: A pragmatic question. Help us understand --

SENIOR ADMINISTRATION OFFICIAL: After that you can do a pragmatic question? (Laughter.)

Q: I'm sorry, I apologize. I'm almost reluctant to ask it. What is it about the money that they signed agreements on then today? What is it they agreed to about this money, since essentially its purpose has been established and its amount has been established? What did the agreement comprise?

SENIOR ADMINISTRATION OFFICIAL: There are a whole variety of things. The point, again, being that -- I've heard the phrase "early money is like yeast" -- the United States committed on May 4th to provide a $600-million aid package over three years. It is now five months later and we have already gone out with $212 million of this assistance.

It is one thing to make pledges and make commitments. It's another thing to put your wallet where your mouth is. And we have done that. And we have done it in a way that supports housing, electrification and private investment, all of which leverages substantial additional assistance.

When we're talking about the aid package itself, that's the answer. Now, in addition, the President agreed to sponsor the private sector participation in this conference that South Africa will hold early next year. The President essentially said, I will put the bully pulpit of the White House behind an effort to encourage not only American investment in South Africa, but global investment in South Africa. And that's a powerful message.

In addition, there are all of the other programs that we've mentioned that -- the cost of which are not yet set.

SENIOR ADMINISTRATION OFFICIAL: Could I add something, too, because I do think it should not be underestimated the importance of this new structure of our bilateral relationship and what it can mean to South Africa. The money is important; we all recognize that. That is why the President was among the first to announce that package. And I think, frankly, in announcing it early on stimulated a lot of the contributions that we have seen subsequently over the months.

But the South Africans, I think by their own admission, understand that one of the most important contributions that we and others can make is -- beyond the money -- is the most effective use of that money -- how, indeed, to employ it to achieve the objectives that they have set out for themselves in their reconstruction and development program.

We have already seen a whole range of areas in which the kind of experience and know-how that we have in this country -- I would take the discussion that we had at breakfast this morning with Secretary O'Leary on the issue of rural electrification -- how to do that and to do it not only using public funds, but to employ private funds in support of that objective. We have got the funding on the table in terms of the $50 million that is up for the credits and the leveraging of private investment. The key part of this is not going to be the funding; the key part is going to be structuring the arrangements, the packages, the projects that allow -- that make it attractive both to private investors and to allow private entrepreneurs to actually come in and carry out the deals.

I don't think you should underestimate the importance of that. There is only one other country in the world with which we have that kind of relationship; it is Russia. To have this kind of a commission which involves senior secretary -- Cabinet-level officials of this administration and their administration in order to bring to bear the full capacities of our governments I think is an extremely important development.

Q: Do any of you gentlemen know whether the South Africans have gotten commitments from American companies on this trip, other than Pepsi and the OPIC companies?

SENIOR ADMINISTRATION OFFICIAL: I am personally at this point not specifically aware of others, other than the one that was publicly announced, which was Pepsi. And we were told that there might be others on the course of this visit.

Q: What time will the meeting tomorrow between Mandela and Aristide take place? And will there be any U.S. representatives there at all? And, thirdly, was this Mandela's idea, or was it sort of -- did it sort of grow out of discussions with the President, or what led to this?

SENIOR ADMINISTRATION OFFICIAL: I think as my colleague mentioned the other day, we did convey to President Mandela the interest expressed on the part of a number of members of our Congress that such a meeting might take place. We did that.

I don't have a specific time tomorrow. I understand that it will be tomorrow afternoon, but that has been left, frankly, between the two delegations to --

Q: Where will --

SENIOR ADMINISTRATION OFFICIAL: Here in Washington. But beyond that, I couldn't give you a specific. And the third question you put, is there an intention to have an American representation there? To the best of my knowledge, no, there is not.

Q: I remain very confused about the numbers. We've been told that what was announced today was the second tranche of the $600 million -- approximately $200 million. So we're talking $75 million for housing loan guarantees, $75 million for electrification -- that's $150 million; $100 million for the Enterprise Development Fund -- that's $250 million; $150 million in the two funds of OPIC -- that's $400 million.

SENIOR ADMINISTRATION OFFICIAL: Okay. The first $75 million for OPIC was already announced several weeks ago, so that is not part of this announcement. The $100 million for the Southern African Enterprise Development Fund is separate. It is not part of the $600 million. The OPIC fund -- excuse me -- the housing fund, one of the $75 million was previously announced. The other $75 million has now been announced. But, let me stress to you that when I'm talking about announced -- the first one was signed, I think it was about 10 days ago. The second one is expected to be signed within the course of the next few days. And again, these are agreements with private entrepreneurs to provide these amounts of funds.

The $50 million electrification program is a guarantee program, and yes, that is part of the second tranche, as is the $30 million health program that the President referred to. You will be -- I guarantee you -- getting a fact sheet that all the scales will fall from all of our eyes.

Q: About foreign policy. They apparently discussed many situations around the world. I happened to ask a question about Haiti. Mr. Clinton had asked them to send soldiers to Haiti. There seems to be a reluctance on the part of the South Africans to get involved. They didn't want to get involved in Rwanda. What are the discussions about foreign policy and integrating South Africa in the future into peacekeeping operations and making them a member of the world community again? What do those discussions involve?

SENIOR ADMINISTRATION OFFICIAL: South Africa is essentially -- or is essentially still in the process of reintegrating -- or integrating -- their defense forces. They had, as you're aware, a whole variety of defense forces. They had, as you're aware, a whole variety of defense forces -- one, the old South African Defense Force, the MK, which was ANC wing, the defense forces of the homelands, Transkei --

SENIOR ADMINISTRATION OFFICIAL: Ciskei, Bophuthatswana --

SENIOR ADMINISTRATION OFFICIAL: Venda --

SENIOR ADMINISTRATION OFFICIAL: Et cetera. No, but the point is that they are still in the process of integrating those into a single, cohesive unit. Until that has been done, they want to restrict their troop involvement in these activities. The President did not ask him to provide troops for Haiti; the President asked him to provide assistance in terms of personnel for the after-mission, which was essentially the police monitoring and the human rights exercise. That is what they are still considering.

I would point out that they were helpful in terms of Rwanda; they did provide a whole variety of humanitarian relief supplies. But until they have resolved this issue, I think they're reluctant to look abroad.

Q: Well, there seems to be pressure from the White House to try to get the South Africans to act more like a global country that is involved in peacekeeping around the world, and now a reluctance on the part of the South Africans to do that. Was there any tension in the --

SENIOR ADMINISTRATION OFFICIAL: No, not at all. And I don't think that's accurate, either. I would stress to you that the President did strongly express his appreciation for President Mandela's tremendous work in Lesotho. Lesotho is a country a long way away from the United States, and we obviously did not focus to a great extent on what went on there. But we had, essentially, an attempt of an auto-coup by the king, who tried to dismiss a democratically elected government. And President Mandela, along with President Mugabe and President Masire -- Mugabe of Zimbabwe, Masire of Botswana -- said, you will not do that. And they used strong diplomatic pressure, and essentially that was reversed, and the restoration of democracy occurred. Similar -- or not similar, but other diplomatic efforts of President Mandela have been extremely helpful in terms of Mozambique, which has an historic election three to four weeks from now; and South Africa has been very forthright and President Mandela went to Mozambique and talked with all the leadership there -- a very important visit. And he's been very helpful in Angola, where he brought dos Santos and President Mobutu and others to South Africa to talk with them about the need for reconciliation, and helped push the process, and we're all very hopeful that the talks in Lusaka will yield results.

Q: Can you explain to us what the President and President Mandela discussed on the question of the visit to Aristide -- what Mr. Clinton said to him and what message he wants conveyed?

SENIOR ADMINISTRATION OFFICIAL: It's the same message that the President conveyed publicly. And he said he was -- they talked very briefly about the overall situation in Haiti. Mr. Mandela mentioned that he plans to see Aristide tomorrow. The President said, that's a very good thing; you have a tremendous message to convey regarding national reconciliation. Your visit -- it's exactly the same thing he said there, which is, your visit here, in itself, has shown that societies can move beyond the deep divisions that they face; and even at the Congressional Black Caucus Luncheon today, a number of members of the CBC told Mandela that they think that his visit is going to be a major, positive benefit for what's going on in Haiti -- simply his visit here.

Q: On the Haiti question, what was the regional consultations that Mandela referred to?

SENIOR ADMINISTRATION OFFICIAL: My understanding is that he is talking with other leaders within Southern Africa to see whether this could be a regional effort. You may know that a number of the countries in Southern Africa have been involved in these sorts of exercises elsewhere.

SENIOR ADMINISTRATION OFFICIAL: -- simply to add, I mean, with the transition in South Africa, it has made possible a variety of different forms of cooperation in Southern Africa, which were not possible before. And that is now extending into the areas of security and defense. And so I think -- our understanding is that President Mandela would like to see whether there is a consensus among the leaders of the region for a kind of joint participation in this.

Q: What countries is he talking to --

SENIOR ADMINISTRATION OFFICIAL: I would assume he's talking to the members of that Southern African Development Council, which includes roughly 10 countries in Southern Africa.

END 5:17 P.M. EDT