SELLING PATIENCE TO THE IMPATIENT

First comes euphoria, then comes soaring expectations, then comes despair. That's been the post Cold War sequence when nations, as large as Russia and as small as Haiti, hold free elections and the electorate expects the presumed magical economic bounty of democracy to materialize immediately. As Nelson Mandela becomes President of South Africa this week, his first order of business will be to lower the expectations of a liberated people.

During South Africa's boom years in the 1960s, the economy grew at an average rate of five to eight percent per year. By the 1990s, the annual growth rate was a meager 1.4 percent. While population was growing at 2.8 percent, average income was falling.

Production of gold -- which used to generate half of South Africa's exports, 20 percent of its taxes, and most of white wealth and black employment -- is gradually winding down. The shafts get deeper and the ore gets poorer.

From 1962 to 1993, the public sector of the economy grew from 22 percent to close to 40 percent. Today the government employs about one-third of all whites. Much of this growing governmental budget financed police, prisons, the military and the huge bureaucratic apparatus necessary to run the apartheid state -- along with a slew of inefficient state-owned businesses. All of this results in the world's highest tax rates.

South Africa has perhaps the most unequal distribution of income in the world. Three-quarters of the people receive 30 percent of the income. Average white incomes are 13 times those of blacks; 60 percent of blacks live below the poverty line. Of the 13 percent of surface land that is arable, whites own 83 percent. Rural blacks expect swift rectification of this ownership imbalance. Black and white armed confrontation would seem inevitable on this issue.

Just as there are enormous imbalances in income between blacks and whites, so too is the same imbalance found in social programs. State spending per capita is five times as much for whites as it is for blacks. White schools receive four times as much support per pupil. Four times as much per person for health care is spent on Whites versus urban blacks and the ratio is 10 times for rural blacks. Half of the rural black population suffers from malnutrition.

Just as the rancid Soviet economy ultimately brought down Communism, the international sanctions and the disastrous South African economy ultimately brought down apartheid. Had the 1994 economy been booming as in the 1960s, the one-man-one-vote elections would not have been held a week ago.

All political parties in South Africa talk about "redistribution". How much? How fast? How do you square free enterprise with forced redistribution?

In 1993, the economy had a negative two percent growth rate. Some economists say South Africa will need five percent growth for the next 10 years with at least $10 billion annual input of foreign capital. Where are the investors of this magnitude?

The post-election celebrations will soon be over and President Nelson Mandela will try to reconcile two conflicting dynamics.

* Can social reform by a post-apartheid government legitimize the economic and political systems and adequately address the aspirations of the poor?

* Can such political and social reform take place without excessive market intervention that would undermine investor confidence?

Within the ANC there are capitalists, socialists and communists -- all argue for a different "mix" of the economic basket. However, most of them agree that the economic status quo is a highway of collapse.

Mandela will soon be presented with a daily list of demands; housing, education, health care and jobs. His followers will want solutions and want them much more quickly than he can begin to fulfill.

Mandela is 75 years old and spent 27 terribly difficult years in prison. When most men are well into their retirement years, he has his most burdensome years ahead of him. Folk heroes begin to lose their luster when high expectations remain unfulfilled. Ask Boris Yeltsin. Mandela will have to sell his people a lot of patience -- and his people may not be in a buying mood.