THE WORLD BANK AND THE IMF/121World Bank Support for Dictatorships
Article IV, section 10 of the World Bank statutes stipulates:
The Bank and its representatives shall not interfere in the political
affairs of any member-state. They are forbidden to be influenced in
their decision by the political character of the concerned member
or members. Only economic considerations can influence their
decision, these considerations will be weighed without bias, with
the goal of meeting the objectives (set by the Bank) stipulated in
article I.The prohibition on looking at 'political' and 'non-economic' factors
in the Bank's operations - a key element of the institution's charter
- has been systematically violated.
When responding to charges that it plays political favourites, the
Bank has even pointed to articles from its charter that prohibit inter
ference in the political affairs of member-states. In fact, these parts of
its charter have often been little more than a smoke screen for World
Bank support of dictatorial regimes.
Indeed, article IV did not prevent the Bank from refusing loans to
Brazil and to Chile when their governments were not to its liking. In
the beginning of the 19 60s, the Bank denied credit to the democrati
cally elected Goulart government in Brazil. After the 1964 military
coup (which set up a military dictatorship that lasted for 20 years),
however, loan totals from the Bank went from zero to an annual
average of S73 million for the remainder of the 1960s, and to just
under S500 million per year in the mid-19 70s.
Under the democratically elected government of Allende
(1970-73), Chile did not receive Bank loans. After the 19 73 military
coup, under the Pinochet regime, the country suddenly became
creditworthy.
In the late 1960s and during the 1970s, under the presidency of
Robert McNamara, the Bank gained notoriety for backing anti
democratic regimes that tortured and murdered their own citizens.
In 1965, for example, the Bank openly defied a resolution from the
General Assembly of the United Nations calling on all UN-affiliated
agencies (including the Bank) to suspend financial assistance to the
South African apartheid regime. But the Bank argued that its article
IV legally obliged it to ignore UN resolutions. Even a personal plea