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Downing Street Years - Margaret Thatcher [320]

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of the country. Foreign banks refused to renew South African credit and the South African Government declared a four-month freeze on the repayment of the principal of foreign debt. My old friend Fritz Leutwiler, former head of the Swiss Central Bank, was appointed as a mediator between the banks and the South African Government. We kept in contact so I knew what was happening. The international pressure on South Africa continued to mount. President Reagan, who was as opposed to economic sanctions as I was, introduced a limited package of sanctions to forestall pressure from Congress. It was clear that the Commonwealth Heads of Government Meeting in the Bahamas at Nassau that October would be a difficult one for me.

So in September I held a seminar at Chequers to clarify our thinking on tactics towards South Africa. Apart from Geoffrey Howe, Malcolm Rifkind, Paul Channon and Ian Stewart (from the Treasury), there were present a range of businessmen, academics and one or two interested and well informed MPs. None of us would have ‘started from here’ had we the choice. On the one hand the reform process in South Africa had ground to a halt: the constitutional reforms had proved a dead end because they did not involve even moderate middle-class blacks. On the other, the European Community was moving towards imposing sanctions. We had placed a reserve on the measures agreed by the Community earlier that month, though in fact, on closer inspection, most of these turned out to accord with our existing practice and I agreed to lift it before the CHOGM. One idea which was raised at the meeting was sending a ‘contact group’ of ‘eminent persons’ to try to get talks off the ground between the South African Government and representatives of the black community.

In the run up to the conference I did what I could to try to slow down the Gadarene rush towards imposing sanctions. I wrote to Commonwealth heads of government urging that instead we try to bring about negotiations between the South African Government and representatives of the black population. But it was already clear that we would be in for plenty of posturing from those intent on cutting a figure on the international stage.


The CHOGM at Nassau

I saw Brian Mulroney in Nassau on the first evening of the conference. He urged me to take the initiative by proposing a package of measures representing the lowest common denominator of Commonwealth agreement. All would be committed to it as the minimum, but it would be open to individual governments to do more if they chose. I told him that experience had taught me never to put forward ideas at too early a stage and I ended by saying: ‘I have made my final — and I mean final — step in accepting the European position on sanctions. I don’t relish being isolated within the Commonwealth, but if necessary so be it.’ I took the same line in similar meetings with Robert Mugabe, Kenneth Kaunda and Bob Hawke.

Bob Hawke opened the conference debate on South Africa, obviously seeking a compromise. Kenneth Kaunda followed with an emotional call for sanctions. I tried to meet both points of view in my reply. I began by detailing the evidence of social and economic change in South Africa. I carefully cited the number of black South Africans who had professional qualifications, who had cars, who were in business. Of course, there was a long way to go. But we were not faced with a static situation. The speech had an effect, as I saw from the reactions of those around the table. But natural caution had led me to have a fall-back position prepared: after my meeting with Brian Mulroney my officials had worked up a note of options for further measures, which I would take with me to the heads of government retreat over the weekend at Lyford Cay, where I knew that the real business would be done.

Lyford Cay is a beautiful spot with interesting historical associations. Private houses in the estate had been made available for the delegations. The central club there was effectively the Conference Centre. In a rather nice touch the Prime Minister of

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