Sanctioning Apartheid - KORA

Afsican ewnomy, Roger Ridddl makes a series of spcific
raco~~unendationa. Among them are: tightening restrictions on
bank loans to South Africa and making it diffudt for South
Ahh to roU over its current debts; preventing new foreign
investment and reinvestment of profits; closing off avenues for
South African sanctions busting and divemiom of trade to
awntries not participating in sanctions; cutting off South A€dcan
gxports of iron and d, coal, tdes, a@cuItural products, and
uranium; shutting down loopholes in the ail embargo; and
keeping the price of gold from rising. The key to his -endations
is that major industrialized mmhk will have to
amr&na& their actions on sanctions measures before they mn
exert the most effiective pressures on the South AiScan government
Sevd essays in this volume probe some of the specific
sanctions that the inknational community can impose. One
uitid area, for inslame, is the debt: owed by t%le South Afihn
g o v ~ t pamstatalsJ , and private sector to foreign banks.
This debt expanded rapidly in the late- 1970s and early 1980s to
$24 bin It reached a critical point in mid-1985 when foreign
banks refwed to mll over their short-term loans and hze new
dts for South Ahica. The South African government responded
in September 1985 by declaring a moratorium on repaying the
short-term debt sf $14 billion that it owed. An agreement
reached between banks and South Africa dowed f-or 5% of the
principal to be repaid by June 1987, an additional 13% by June
1990, and the rescheduling of the remainha debt in June 1990.
Although anti-apartheid pups had called on European and
herim creditor bank to exact concessions from the Swth
Ahhm government as a price for rescheduling debt, South
African Reserve Bank pvrner Qlris Stals announcedin October
1989 that South Africa had succeeded in negotiating a new debt
package, which ded for 20.5% of the $8 billion due in June 1990
to be paid in eight imtalhents over a 3 1/2 year pa5od.The
banks can also turn the rest of the short-term debt into long-term
Iwns, but these loans could not be rolled over again
South Africa has apparently escaped one debt-dated bind,
but there are other facets of the debt problem that on be utili2ad
as pressure points. For instme, the debf problem has lowered