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Note: This document is from the archive of the Africa Policy E-Journal, published by the Africa Policy Information Center (APIC) from 1995 to 2001 and by Africa Action from 2001 to 2003. APIC was merged into Africa Action in 2001. Please note that many outdated links in this archived document may not work.

South Africa: World Bank Bond Boycott

South Africa: World Bank Bond Boycott
Date distributed (ymd): 010619
Document reposted by APIC

Africa Policy Electronic Distribution List: an information service provided by AFRICA ACTION (incorporating the Africa Policy Information Center, The Africa Fund, and the American Committee on Africa). Find more information for action for Africa at

+++++++++++++++++++++Document Profile+++++++++++++++++++++

Region: Southern Africa
Issue Areas: +political/rights+ +economy/development+ +US policy focus+


This posting contains the text of a leaflet from the World Bank Bond Boycott campaign in South Africa. For more information see the web sites cited in the posting. For previous documents and additional background on apartheid-caused debt, see previous postings at:

Also in this posting find a summary of upcoming events related to the Africa Action "Africa's Right to Health" campaign.

+++++++++++++++++end profile++++++++++++++++++++++++++++++


The next two weeks will see two major events at which the world's governments will be making critical decisions affecting Africa's Right to Health. What emerges from these meetings and what does not will be one measure of the impact of public pressure to date and of the distance still to go to ensure Africa's Right to Health.

  • On June 20 in Geneva the World Trade Organization (WTO), at the request of the African Group within the WTO, will devote one day to consideration of global patent rules and affordability of essential medicines. According to a statement by NGOs presented by Oxfam UK, Third World Network and Medecins sans Frontieres at a press conference in Geneva today, "The key principle that should guide the discussions in the WTO is that access to essential and vitally-needed medicines is a fundamental human right."

  • The United Nations General Assembly Special Session on HIV/AIDS will take place in New York June 25-27. The official session web site is at Additonal background on the session, including the on-line civil society discussion preceding the session, is available at Both sites have the latest version of the draft declaration made public (May 11, 2001). The last month of informal consultations has included intense negotiations among governments on wording, combined with marginalization of civil society participants. At present these consultations seem more likely further to weaken the declaration than to strengthen it in response to civil society critique of earlier drafts.

Africa Action is among NGOs registered for participation at UNGASS, with four representatives.

On Saturday June 23, beginning at 11 am at Washington Square Park, Africa Action is among the sponsors of the "Stop Global AIDS Now" march and rally, along with African Services Committee, Health GAP Coalition, Global AIDS Alliance, ACT UP New York, Jubilee USA Network and American Jewish World Service. For more information, downloadable leaflets, and additional organizations participating in the march, see Also see the press release at:

On Sunday June 24, churches in Africa Action's Religious Action Network are hosting AIDS Orphan Sunday. For more information: or contact Relgious Action Network Program Director Aleah Bacquie

Also on Sunday, June 24, Africa Action will hold a press conference launching the Africa's Right to Health campaign. More details to come in a future posting.

The World Bank Bond Boycott
Comes to South Africa!

[Distributed by World Bank Bonds Boycott, Center for Economic Justice, 1830 Connecticut Ave., NW, 4th floor, Washington, DC 20009. Tel: (202) 299-0020 / Fax: (202) 299-0021 Web:

To receive occasional updates on the World Bank Bonds boycott, join our listserve: Send blank e-mail to

(In South Africa) For more information, and to get involved, contact Patrick Bond (, 083-633-5548; Molly Dhlamini, 082-811-9874; David Masondo, 082-886-3525; Darrell Moellendorf, 717-4351; David Monyae, 717-4384; or Trevor Ngwane 083-293-7691. Further information is available at the Alternative Information and Development Centre (Jhb: 339-4121, CT: 685-1565) (]

Why should we add another voice to the global protest against World Bank and IMF policies?

In 1944, the World Bank and its partner, the International Monetary Fund, were founded in Bretton Woods, a resort town in the northeast United States. White-ruled South Africa was given special treatment, and was one of the first member-states within the two institutions. The Bank and IMF were then--and are still--mainly controlled by the US government, which happily promoted apartheid because it served the interests of large US companies. The World Bank traditionally has a US citizen as its president (today, James Wolfensohn) and the IMF is headed by a European (Horst Koehler).

Instead of carrying out their mandates to "reconstruct" and "develop" countries in need of assistance and to assure orderly flows of capital, the World Bank and IMF have presided over disaster. The past two decades have witnessed unbearable Third World debt crisis, and periodic financial collapses (for which the Bank and IMF provide commercial bank bailouts that protect the rich at the expense of the poor). The Bank and IMF are deeply implicated.

From the very commencement of apartheid in 1948, straight through the struggle for liberation, and even after, the World Bank and IMF consistently sided with the interests of the white, wealthy population. The Bank and IMF made loans to prop up colonialism across Southern Africa during the 1950s-60s, and then from the 1960s-90s lined the pockets of corrupt dictators like Mobutu Sese Seko and Hastings Banda. The Bank supported foolish white-elephant projects which did nothing to uplift the poor. The huge dams it promoted at Kariba and in Lesotho mainly benefit big corporations, displace tens of thousands of poor people, and are environmentally disastrous.

We therefore endorse the demand by Jubilee South Africa for total Third World debt cancellation, plus reparations for World Bank and IMF crimes against the people of the region. Specific damage done by these two institutions during South Africa's apartheid era includes:

  • the World Bank's US$100 million in loans to Eskom from 1951-67 that gave only white people electric power, but for which all South Africans paid the bill;
  • the World Bank's point-blank refusal to heed a United Nations General Assembly instruction in 1966 not to lend to apartheid South Africa;
  • IMF apartheid-supporting loans of more than $2 billion between the Soweto uprising in 1976 and 1983, when the US Congress finally prohibited lending to Pretoria;
  • a World Bank loan for Lesotho dams which were widely acknowledged to "sanctions-bust" apartheid South Africa in 1986, via a London trust; and
  • IMF advice to Pretoria in 1991 to impose the regressive Value Added Tax, in opposition to which 3,5 million people went on a two-day stayaway.

Subsequently, neo-apartheid lending and policy advice by the Bretton Woods twins included:

  • an $850 million IMF loan to South Africa in December 1993 which carried conditions of wage restraint and cuts in the budget deficit, which in turn hampered the transition to democracy;
  • World Bank promotion of "market-oriented" land reform in 1993-94, which established such onerous conditions (similar to the failed Zimbabwe policy) that instead of 30% land redistribution as mandated in the RDP, less than 1% of good land was redistributed;
  • the World Bank's endorsement of bank-centred housing policy in August 1994, with recommendations for smaller housing subsidies;
  • World Bank design of South African infrastructure policy in November 1994, which provided the rural and urban poor with only pit latrines, no electricity connections, inadequate roads, and communal taps instead of house or yard taps;
  • the World Bank's insistence that corrupt Lesotho Highlands Development Authority boss Masupha Sole stay in his job in December 1994 (six years after he began taking bribes from international construction corporations), in a threatening letter to the Lesotho government;
  • the World Bank's promotion of water cut-offs for those unable to afford payments, opposition to a free "lifeline" water supply, and recommendations against irrigation subsidies for black South Africans in October 1995, within a government water-pricing policy in which the Bank claimed (in its 1999 Country Assistance Review) it played an "instrumental" role;
  • the World Bank's conservative role in the Lund Commission in 1996, which recommended a 44% cut in the monthly grant to impoverished, dependent children from R135 per month to R75;
  • the World Bank's participation in the failed Growth, Employment and Redistribution (GEAR) policy in June 1996, through contributing both two staff economists and its economic model;
  • the World Bank and IMF's consistent message to South African workers that their wages are too high, and that unemployment can only be cured through "labour flexibility";
  • the World Bank's participation in Egoli 2002, through research support and encouragement of municipal privatisation;
  • the World Bank's repeated commitments to invest, through its subsidiary the International Finance Corporation, in privatised infrastructure, housing securities for high-income families, for-profit "managed healthcare" schemes, and the now-bankrupt, US-owned Dominos Pizza franchise;
  • the consistent failure of World Bank and IMF "structural adjustment programmes" in Southern Africa; and
  • the stubborn refusal by the World Bank and IMF to cancel debt owed by our impoverished neighbours since the mid-1990s, except in tiny amounts--and only on the condition that, for example in Mozambique, public health service charges increase by 400% and all water systems be privatised.

Some say the World Bank and IMF are reforming themselves, and are more attuned to poverty, environment, gender, public health, educational and other social concerns. The Bank's new-and-improved image includes its alleged role as a "Knowledge Bank"--using South Africa as the main pilot project--to impart international best practice.

In reality, however, the minor reforms to date have made no difference. Environmentally-destructive, politically-repressive projects like the Chad-Cameroon Pipeline still receive funding (in June 2000), and neoliberal policies continue to be imposed on Third World countries. In a March 2000 "Sourcebook on Community Driven Development in the Africa Region," Bank staff wrote of water,

"work is still needed with political leaders in some national governments to move away from the concept of free water for all... Promote increased capital cost recovery from users. An upfront cash contribution based on their willingness-to-pay is required from users to demonstrate demand and develop community capacity to administer funds and tariffs. Ensure 100% recovery of operation and maintenance costs."

Following such advice, more thousands of South Africans would get cholera, women-headed households would continue to pay a devastating personal price when they cannot afford water, and municipal officials would further alienate themselves from the public.

Ironically, the World Bank is now proposing a R1,6 billion hospital rehabilitation loan, which would give South Africa unnecessary foreign debt, and introduce Bank-style neoliberalism even deeper into the healthcare system. Because of GEAR-related budget cuts, promoted by the Bank, many South African hospitals are in dire shape. Do we need a Bank loan and advice to fix them? Do we need the arsonist to tell us how to put a fire?

The international movement for social and economic justice is making simple demands of the Bank/IMF:

  • Cancel all Third World debts!
  • Pay reparations for decades of lending that kept the Third World suffering from poverty, corruption and dictatorship!
  • End the neoliberal "Washington Consensus" which is responsible for the worst inequality ever recorded in human history!

In South Africa, numerous civil society groups protested in five cities on 26 September, 2000, adding this demand:

  • The World Bank, IMF and International Finance Corporation must immediately close their SA offices and withdraw their missions!

South Africa doesn't need these "multilateral institutions," whose main aim is promoting the interests of the US, Europe, Japan and their transnational corporations! Instead, we need to change neoliberal policies at home, which the World Bank, IMF and World Trade Organisation have pestered our government to adopt!

To do these things, we need to encourage all our institutions--pension funds, churches, municipalities, universities--to join the global "World Bank Bonds Boycott" so that their international fund managers do not invest in Bank Bonds.

The World Bank Bonds Boycott has already been endorsed by three US city councils (San Francisco, Oakland and Berkeley) and all the major US-based Socially Responsible Investment funds. It is simple, as these investors have shown, to instruct international investment managers not to invest in World Bank Bonds, which provide the Bank with 80% of its operational funds.

The signal that this sends to the financial markets is critical. We need to ensure that all South African-based fund managers--who invest up to 15% of their monies abroad (as is presently allowed)--receive a strong message: to profit by investing in World Bank Bonds--in view of the Bank's ongoing destructive lending--is simply immoral.

But it is also financially irresponsible to invest in the World Bank. The more that large investors around the world join the Bonds Boycott and commit not to buying World Bank Bonds, the less demand there will be for those Bonds. Anyone buying World Bank Bonds is therefore buying an asset which will decline in value.

Joining the Boycott will not cost our institutions anything. Existing endowments will not be affected, since we are not calling for "divestment" of existing Bank Bonds, but instead, a commitment not to invest in future. (There are no shortage of other international investment choices.) The need for economic democracy--especially when it comes to investment decisions--has never been more urgent, and the need to watchdog our funds so they are not used to support oppression by the World Bank, is one small but vital step for bringing our institutions into line with values of social justice.

A committee is being established at Wits University in Johannesburg to ask Wits and the entire society, whether World Bank Bonds should be placed on a boycott list in future.

Celebrate June 2001-- the fifth anniversary of GEAR by joining the campaign against World Bank bonds, and against the Bank's R1,6 billion hospital loan.

This material is being reposted for wider distribution by Africa Action (incorporating the Africa Policy Information Center, The Africa Fund, and the American Committee on Africa). Africa Action's information services provide accessible information and analysis in order to promote U.S. and international policies toward Africa that advance economic, political and social justice and the full spectrum of human rights.

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