29 April 2019 by Eric Toussaint , Patrick Bond
Anti-apartheid uprising in South Africa in the 1980s (CC - Wikipedia)
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
World Bank
WB
The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.
It consists of several closely associated institutions, among which :
1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;
2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;
3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.
As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.
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.
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.
[1] UN Doc. A/AC.109/124 and Corr. 1 (June 10, 1965).
[2] Article 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 ”.
[3] Kapur, Devesh, Lewis, John P., Webb, Richard. 1997. The World Bank, Its First Half Century, Volume 1, p. 692
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 Greece 2015: there was an alternative. London: Resistance Books / IIRE / CADTM, 2020 , Debt System (Haymarket books, Chicago, 2019), 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, 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. He was the scientific coordinator of the Greek Truth Commission on Public Debt from April 2015 to November 2015.
20 March, by Eric Toussaint
6 March, by Eric Toussaint
26 February, by Eric Toussaint
26 February, by Eric Toussaint , Anis Germany
28 January, by Eric Toussaint
11 January, by Eric Toussaint
10 January, by Eric Toussaint , Sushovan Dhar
12 December 2022, by Eric Toussaint , Jawad Moustakbal
12 December 2022, by Eric Toussaint , Anaïs Carton
12 December 2022, by Eric Toussaint
is professor at the University of Johannesburg Department of Sociology, and co-editor of BRICS and Resistance in Africa (published by Zed Books, 2019).
29 March, by Patrick Bond
17 January, by Patrick Bond
15 December 2022, by Patrick Bond
5 December 2022, by Patrick Bond , Desmond D’Sa
12 November 2022, by Patrick Bond
1 November 2022, by Patrick Bond
21 October 2022, by Patrick Bond , Desmond D’Sa
16 October 2022, by Patrick Bond
9 August 2022, by Patrick Bond
Emerging-market finance, neoliberal ideology and durable malgovernance at the BRICS New Development Bank
The BRICS spall, fall and (try to) reconstitute11 July 2022, by Patrick Bond