Sanctioning Apartheid - KORA

Sancfioning Apartheid
There has been no indication that that sort of hame will be
wlthdra~n."~~
The epmue of UK banks in the South African public sedor
has been rising continuously sfnm the end of 1985, especially in
the first half of 1987. Using the fact that 80% of UK bank lending
to Sou& Africa is in dollars, the flow to the South African public
sector in the first haJf of 1986 would be about $160 W n while
that in the first haif of 2987 would be about $170 million In the
latter case the flow is almost completely compensated by a
deenease in unused rodtments which suggests that the flow
was a d t of a draw down on an already commiW loan or
Iwns. German bank data supt a net flow into the South
A&m mn-bank sector, including the public sehsr, of about $40
million in the second quarter of 1987. Remember these flows are
net flows or flow into South Afrim minus any repayments of
existing loans. Thus the actual idlows are huger and have
probably risen even more in the second half of 1987.
Three credits for a total of DM 32S million are known to
have been accorded to the South African Post and Teleccrwnunications
Administration in 1987 for finandng telephone offices
by the German reconstruction bank, the Kreditmstalt fuer
Wiederaufbau (Kfwl." The Fratkt.furter aUndYchau in January
1988 had qiorted that these credits were for =OM, but the
German Embassy stated that this report was incorrectU
Note that a DM200 million bond issue was floated in
Deoember 1987 for emo~ with a mgktration date of 1 April 1985.
The lead managers werr Dresdner and Commexzbank. EmoM
received the funds in 1985 bm the underhtersI so the issue
does not represent an inflow of funds in 2987.
Part EL The Effect of Cutting off Trade Credib
Dr. Gerhard de Ko& Governor of the South African Rgserve
Bank, in his "optimistic scenario" for 1988 foresaw the possibility
of a 4% pwth in the South African economy:' This scenario
rrquiredamong*~"anincreasedusebySwth
African importers and acprbxs of foreign trade and suppliers'
dls with a consequent improvement in the capital amount of