An anticipated favorable vote by the United States this week on a $1.1 billion International Monetary Fund loan to South Africa has brought warnings from key members of Congress that future U.S. funding for international lending could be in jeopardy.
At least 35 legislators have written Treasury Secretary Donald T. Regan opposing the loan or urging that such a loan contain conditions designed to change South Africa's system of apartheid, or racial separation.
Reagan administration sources have given no public indication of how the United States will vote Wednesday, but they say that a delay, which some members of Congress have requested, is unlikely and that the U.S. vote will be strictly on economic grounds.
A meeting between a Treasury delegation led by Richard Erb, the U.S. executive director to the IMF, and congressional staff members a week ago failed to sway Capitol Hill sentiment, according to participants.
"My greatest concern is that U.S. support for yet another IMF loan to South Africa, the largest international loan in South Africa's history, will be perceived by the South African government as an endorsement of the government's spending priorities and will be viewed by the non-white community within South Africa as support for an unjust status quo," Rep. Howard Wolpe (D-Mich.), chairman of the House Foreign Affairs subcommittee on Africa, wrote Regan.
The loan issue comes at an awkward time for the administration, as it struggles to maintain momentum for the centerpiece of its Africa policy, an effort to gain independence for South African-controlled Namibia.
After considerable progress earlier this year, the negotiations appear to have hit a serious stumbling block over the issue of Cuban troops in Angola.
The fact that a number of opponents of administration policy toward South Africa also generally support international lending efforts gives the South African loan issue unusual focus.
Most of the vocal opposition to the loan has emerged in the House, both over the issue of South Africa and over administration consultation with Congress. One source noted that in the Senate there is a general hope that the administration will be more conscious of the "political sensitivities" of the issue.
Thirty-one members of Congress from the Ad Hoc Monitoring Group on Southern Africa warned Regan in a letter dated Oct. 21: "It is very likely that the question of U.S. participation in the IMF will be raised during the next session of Congress."
Wolpe noted more explicitly in his letter that Congress is to take up IMF funding at the next session and said, "I doubt whether U.S. taxpayers would support the continued extension of U.S. taxpayers' dollars to a white-minority government whose entire framework of laws, institutions and practices are anathema to the principles upon which this country was founded."
South Africa reportedly is seeking $689 million from the IMF's compensatory financing facility, designed to aid countries in their balance of payments, and another $394 million under a standby arrangement.
South Africa is heavily dependent on sales of gold and other minerals for its foreign exchange. The gold market has dropped markedly over the past two years from a high of more than $800 an ounce to $427 now, leaving a projected deficit of more than $3 billion this year.
Aside from the members of Congress who are on record, no one else in the behind-the-scenes debate is willing to speak out on the issues involved, but the arguments generally break down as follows:
Supporters of the loan fall into two categories. By far, the larger number argue that IMF loan decisions must be kept free of political considerations because to do otherwise would subvert the institution. The IMF is one of the main tools for international monetary authorities to assist troubled economies.
Others argue that even on political grounds the administration's policy of "constructive engagement" toward South Africa has brought greater change in that government's policies than the confrontational approach of previous administrations.
In an Oct. 19 letter to Regan, members of the Congressional Black Caucus sharply attacked the loan, arguing that it is impossible to separate economic and political considerations in regard to South Africa.