Despite its official criticism of South Africa's racial policies, the United States has helped Prime Minister John Vorster obtain $463 million from the International Monetary Fund to combat his country's economic problems.
Rooted in that action is a case study of the contradictory choices confronting U.S. officials who must work out a design for furthering U.S. interests and policy objectives on a global basis.
Specifically, U.S. support of South Africa in the IMF raises questions about whether there is a built-in clash between the political and economic goals of Washington's foreign policy.
On one side, there is the concern of the United States, which played the leading role in creating international lending agencies like the IMF, that the integrity and impartiality of these institutions be protected so they can perform the jobs for which they were designed.
In the case of the IMF, that job is to help 130 member countries overcome threats to their economies caused by adverse trade balances - imports outstripping exports - that seriously deplete gold and currency reserves.
The success of the IMF's bail-out operations, U.S. officials note, is important to every country engaged in international trade. If a country, particularly a large country like South Africa, runs into balance-of-payments problems that make it unable to sell products and pay its foreign debts, the resulting chain reactions could disrupt international trade and monetary systems.
For that reason, officials say, the United States must treat loans made by the IMF differently than U.S. aid granted on a direct, government-to-government basis.
Washington, they argue, must set an example for other members by ensuring that U.S. votes in the IMF are strictly in accordance with the agency's rules and economic objectives rather than allowing them to be influenced by political considerations.
However, that argument increasingly has been challenged by human-rights activists, leaders of the American black community and other opponents of South Africa's white supremacy policies. They charge that international agencies like the IMF have become convenient, backdoor devices for quietly channeling aid to countries like South Africa, whose domestic policies are bitterly opposed by many Americans.
By helping South Africa bolster its slumping economy, these critics charge, the United States has thrown away one of its most effective potential weapons for putting pressure on the Vorster government. As long as the United States helps keep money coming through agencies like the IMF, they contend, Vorster will be justified in dismissing Washington's remonstrances as "totally irrelevant."
This dissenting viewpoint has been heard with growing frequency in the months since concern with human rights became a major element of U.S. foreign policy. For example, it was the basis of a recent, unsuccessful attempt in Congress to restrict U.S. contributions to some international lending agencies by specifying they could not be used to assist seven countries charged with human rights violations.
South Africa wasn't among them. But, the size and importance of the aid it received from the IMF make it perhaps the best illustration of the problem.
The IMF's balance-of-payments assistance to South Africa the last two years was greater than the combined IMF assistance to all other African countries the same period.In those two years, only two other nations, Britain and Mexico, were bigger beneficiaries of IMF aid.
Of the total received by South Africa, an estimated $107 million came from the U.S. government's contribution to IMF funds. Even more important, the United States, as the IMF's largest contributor and most influential member, probably could have blocked the South Africa loans by objecting.
Instead U.S. representatives on the IMF's executive board supported the South African requests during closed-door deliberations.
That is revealed by minutes of executive board meetings, obtained by writers James Morrell and David Gisselquist working on a South Africa study for the Center for International Policy, a private, Washington-based political research group.
The documents show the process began in January, 1976, when South Africa applied to the IMF for help in fighting problems it said had been caused by rising imports, a slump in exports and resulting drain on reserves.
During subsequent internal IMF discussions, according to the documents, Thomas Leddy, one of the U.S. delegates to the executive board, strongly endorsed the South African requests.
With this U.S. encouragement, the IMF gave South Africa loans totalling $366 million in 1976. That was during the Ford administration when U.S. policy, under Secretary of State Henry A. Kissinger, tended to emphasize the carrot rather than the stick in dealing with South Africa.
The documents do not cover IMF deliberations on South Africa in 1977. However, diplomatic sources say, U.S. delegates to the IMF have continued to support additional South African loan requests through the first year of the Carter administration.
As a result, by October, total IMF aid to South Africa had mounted to $463 million. These loans were made at the same time the Carter administration, in line with its much-advertised championing of human rights, was taking an outspokenly critical task toward the Vorster government.
When asked about the apparent contradictions, administration officials reply that Washington has no single yardstick by which economic decisions on South Africa are made.
Since 1964, for example, U.S. policy has prohibited the Export-Import Bank, a government-controlled and-funded agency that provides financing for U.S. sales overseas, from making direct loans to South African purchasers of U.S. products.
However, the bank is permitted to guarantee financing of loans obtained from private U.S. banks by South African importers of U.S. goods. Another federal agency, the Commodity Credit Corp., administered by the Agriculture Department, is allowed to lend money to South Africa for purchase of U.S. farm products.
The State Department follows what it calls "a neutral policy" of neither opposing nor encouraging U.S. business investment in South Africa. Instead, department officials say, they try to ensure that potential investors are aware of South Africa's internal political problems and to urge them to follow "enlightened racial employment policies."
"Neutrality" is also the word used by administration officials when discussing the U.S. role in the IMF. U.S. representatives there, they say, are instructed to approach decisions on strictly economic grounds, taking into account IMF rules about whether the country in question has a balance-of-payments problem caused by external factors beyond its control.
However, those who oppose that policy point out that the United States frequently has used its votes and influence in other international lending agencies such as the World Bank, the Asian Development Fund and the Inter-American Development Bank for frankly political purposes.
The Carter administration has been especially active in applying human rights considerations to its votes in many of these institutions. Recently, for example, Washington blocked an IADB loan to El Salvador for a hydro-electric project because of human rights factors. Then, when U.S. officials detected improvements they wanted to encourage, Washington reversed itself and offered to put up roughly half the loan.
In the view of human rights activists, South Africa has been treated more favorably by the United States and other industrial powers dominating the IMF. They point to the sizeable U.S. and European investments there, the high percentage of South Africans foreign debt held by American and European banks and the strategic importance to the West of South Africa's mineral exports.
In the study they are preparing, Gisselquist and Morrell cite these charges and argue that political considerations should not - indeed, cannot - be divorced from any assessment of South Africa's economic situation.
They contend that South Africa's economic problems primarily are due not to an externally caused trade imbalance, but to overspending rooted in the high cost of repressing the 83 per cent of the population that is black or colored.
The buttress this argument, they cite a confidential IMF study in April that lists South Africa's defense budget as "a major cause of the rapid increase in total current expenditure: its share of total expenditure has risen from 14 per cent in 1973-74 to 20 per cent in 1976-77."
"As a grisly footnote to the IMF's aid to South Africa," Gisselquist and Morrell add, "the April, 1977, IMF study said that the increase in military spending in 1976-77 came to $450 million - almost exactly the amount of IMF assistance."
The executive board minutes obtained by the two writers show that the only delegate to raise these points was Antoine W. Yamcogo of Upper Volta, representing 17 black African countries.
The only doubts voiced by delegates from industrial nations involved questions about whether South Africa had caused its problems by keeping sizeable gold stocks off the export market in anticipation of higher world prices.
Even that objection was dismissed by U.S. delegate Leddy. The documents quote him as saying that "South Africa's export shortfall was probably due to factors largely beyond its control." Accordingly, he found the assistance request reasonable and worthy of support.
In summing up, Gisselquist and Morrell state: "Each of the IMF meetings covered in the minutes was held behind closed doors. Thus while South Africa was earning world condemnation for its racist policies, it was receiving a more tangible measure of support from the IMF. It is difficult to imagine any other international forum in which such support would be forthcoming."