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South Africa: The support of the World Bank and the IMF to the Apartheid regime
by Eric Toussaint , Patrick Bond
29 April 2019

The World Bank and the IMF were accomplice of the apartheid for decades. They violated the UN embargo against the racist regime at the helm of South Africa.

Between 1958 – 1968, the World Bank loans made possible the financing of the “pro-White” projects : a thermal power plant (Eskom) which supplied electricity only to the whites and, a section of the railway network (South African railways/harbours) which was only accessible to the Blacks if they could prove that they were employed in a city connected by the network (they had to produce a travel authorisation).

In 1965, the Bank directly defied a resolution of the UN General Assembly, adopted in 1964, recommending all UN affiliated agencies – including the World Bank – to stop financial support to the South African apartheid regime since it violated the UN charter. The Bank argued that according to Article IV of its Articles of Agreement, it was not legally bound to follow UN resolutions. Even a personal plea by the UN Secretary General, U Thant to George Woods, the then president of the World Bank went in vain.


Table : The South African apartheid regime and its relations with the World Bank and the IMF (IFIs – International Financial Institutions)

Source : Bond, Patrick, (2000), Elite Transition: From Apartheid to Neoliberalism in South Africa, Pluto Press, London.


The World Bank’s refusal to comply with UN demands concerning Portugal and South Africa

From 1961, when most colonial countries had won their independence and become UN members, the General Assembly on several occasions adopted resolutions condemning the apartheid regime in South Africa and Portugal’s iron dominance over several African and Asian countries. In 1965, in view of the continued financial support of the Bank and the IMF for these regimes, the UN made a formal demand: “To all the specialized agencies of the United Nations, and in particular the International Bank for Reconstruction and Development and the International Monetary Fund (…) to refrain from granting Portugal any financial, economic or technical assistance so long as the Portuguese Government fails to renounce its colonial policy, which constitutes a flagrant violation of the provisions of the Charter of The United Nations”  [1]. It issued a similar demand concerning South Africa.

The Bank’s directors met to take position and a majority of executive directors decided to continue making loans. To justify this decision, they invoked article 4, section 10 of the Bank’s statutes [2] which forbid political involvement! All the most industrialized countries, backed by a certain number of Latin-American countries, voted to continue the loans. In 1966, the Bank approved a 10 million dollar loan to Portugal and a 20 million dollar loan to South Africa. Subsequently, under further pressure, the Bank stopped making new loans to these countries. However, a UN structure, the Decolonization Committee, continued for 15 years to denounce the fact that the Bank allowed South Africa and Portugal to apply for World Bank financing for projects in other countries. In addition, the Bank sought the favours of South Africa to obtain donations to IDA [3].

The IMF, in spite of the condemnations and campaigns for the financial sanctions, lent to the apartheid regime 2 billion dollars during the decade of 1970s.

It was only after the US Congress ban on funding to South Africa did the IMF change its policies. However, far from heeding to the demands of the mass movements, the IMF, sent a team of advisers, every year since 1980s, to assist the South African government to implement neoliberal reforms.

Conclusion: We can affirm without any risk of exaggeration that in spite of clear international opposition to the IMF and the Apartheid regime, the IMF and the World Bank were accomplices of the racist and repressive South African regime with their financial and strategic support.


Footnotes :

[1UN Doc. A/AC.109/124 and Corr. 1 (June 10, 1965).

[2Article IV, section 10 stipulates : “The Bank and its officers shall not interfere in the political affairs of any member; nor shall they be influenced in their decisions by the political character of the member or members concerned. Only economic considerations shall be relevant to their decisions, and these considerations shall be weighed impartially in order to achieve the purposes (set by the Bank) stated in Article I ”.

[3Kapur, Devesh, Lewis, John P., Webb, Richard. 1997. The World Bank, Its First Half Century, Volume 1, p. 692

Eric Toussaint

is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Liège, is the spokesperson of the CADTM International, and sits on the Scientific Council of ATTAC France.
He is the author of Bankocracy (2015); The Life and Crimes of an Exemplary Man (2014); Glance in the Rear View Mirror. Neoliberal Ideology From its Origins to the Present, Haymarket books, Chicago, 2012 (see here), etc.
See his bibliography: https://en.wikipedia.org/wiki/%C3%89ric_Toussaint
He co-authored World debt figures 2015 with Pierre Gottiniaux, Daniel Munevar and Antonio Sanabria (2015); and with Damien Millet Debt, the IMF, and the World Bank: Sixty Questions, Sixty Answers, Monthly Review Books, New York, 2010. Since the 4th April 2015 he is the scientific coordinator of the Greek Truth Commission on Public Debt.

Patrick Bond

is professor of political economy at the Wits University School of Governance in Johannesburg and co-editor of BRICS: An anti-capitalist critique (published by Haymarket, Pluto, Jacana and Aakar).