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This resource is hosted by the Nelson Mandela Centre of Memory, but was compiled and authored by Padraig O’Malley. It is the product of almost two decades of research and includes analyses, chronologies, historical documents, and interviews from the apartheid and post-apartheid eras.

From 14 February 1990, The Independent, "Outlook: Sanctions Lesson from the Banks"

The curious fact about the row over South African sanctions is that the sanctions which matter most are those whose removal depends least on political decision makers.

These are the curbs on new bank lending, which were triggered in May 1985 when Chase Manhattan refused to roll over a loan. All the other US banks followed and South Africa soon declared a moratorium on capital repayments which has led to a series of reschedulings.

Anti-apartheid campaigners claimed a brave victory, but in reality the banks were only partly influenced by pressures at home, and more so in the United States than here. What actually stopped lenders in their tracks was the sudden realisation that South Africa's economy was on the brink of chaos because of inflation in the shops and rioting in the townships.

It was an old fashioned case of fright at the prospect of not being repaid. And the shock it gave the South African government has since then been the best evidence that Mrs Thatcher is wrong about the ineffectiveness of sanctions.

Whatever politicians decide about lifting sanctions, banks are unlikely to return to the South African market until they perceive an improved political and economic risk. It has been looking better, especially as South Africa has paid back 15 per cent of the $ 14bn of frozen capital and plans to pay as much again in the next three years - a rather more robust performance than Brazil. But Nelson Mandela's reaffirmation of the ANC's policy of nationalising mines and other major industries is likely to reinforce the banks' wariness again.

This resource is hosted by the Nelson Mandela Centre of Memory, but was compiled and authored by Padraig O’Malley. Return to the Nelson Mandela Centre of Memory site.