Committee for the Abolition of Illegitimate Debt

The people of North Africa and the Middle East/The Arab region are facing a great ordeal in light of the global health crisis caused by the Corona virus pandemic. The latter revealed the depth of the destruction that capitalism has unleashed on mankind and nature. The dominant classes are trying to guarantee profits for the major companies and banks at the expense of the working classes (in its broad sense) as well as small-scale producers. These are found in the frontlines, moving the production wheel, risking their lives in the worst conditions of exploitation. The imperatives of quarantine increase their suffering with the absence of a decent public health sector hollowed by decades of neoliberal policies. In particular, women bear the brunt of this exceptional situation, whether in the workplace or at home.

There has been an accumulation of experiences of popular struggles for more than forty years against the policies of neo-colonialism, dependency, and the unequal exchange imposed on us by the imperial decision-centers, with the complicity of governments and existing political systems in our countries. It exploded in the form of a massive revolutionary process, the first of which began with the revolution in Tunisia, Egypt, Yemen, Libya and Syria (end of 2010 – early 2011), and the second phase with the revolutions in Sudan, Algeria, Lebanon and Iraq (end of 2018 – beginning of 2019). The masses in the streets and squares expressed their will to be free from oppression and tyranny, and they demanded freedom and social justice.

We, as organizations, movements, and networks of resisting groups of workers, women, youth, oppressed nationalities and minorities, cling to the demands of this revolutionary process and strive to achieve it. We will not allow the Corona pandemic to be used to consolidate the counter-revolution and eradicate our democratic aspirations, nor will we accept the continued neoliberal austerity measures that generalize poverty and unemployment and establish a general framework of social inequality. More than ever, and very urgently, the current context stresses the need to intensify cooperation and collective thinking to lay the foundations of a society of freedom, dignity and social justice, values that our peoples have demanded for long.

 Let us mobilize in order to cancel the public debts

Public indebtedness constitutes a system of plundering our wealth and subjecting our peoples to the global imperialist system. Debt services absorb every year the social budgets of our countries. Public health spending is significantly less than the minimum levels set by the World Health Organization. It is necessary to stop repaying public debts to provide the necessary financial liquidity Liquidity The facility with which a financial instrument can be bought or sold without a significant change in price. in order to face the Corona epidemic and to confront the deepening social and economic crisis. Likewise, all forms of privatization of public services must be halted. Priority should be given to developing a public health sector and developing free and good health and medical care Care Le concept de « care work » (travail de soin) fait référence à un ensemble de pratiques matérielles et psychologiques destinées à apporter une réponse concrète aux besoins des autres et d’une communauté (dont des écosystèmes). On préfère le concept de care à celui de travail « domestique » ou de « reproduction » car il intègre les dimensions émotionnelles et psychologiques (charge mentale, affection, soutien), et il ne se limite pas aux aspects « privés » et gratuit en englobant également les activités rémunérées nécessaires à la reproduction de la vie humaine. systems.

The demand for cancellation of external debt has always been among the popular demands in our region since the debt crisis and the structural adjustment Structural Adjustment Economic policies imposed by the IMF in exchange of new loans or the rescheduling of old loans.

Structural Adjustments policies were enforced in the early 1980 to qualify countries for new loans or for debt rescheduling by the IMF and the World Bank. The requested kind of adjustment aims at ensuring that the country can again service its external debt. Structural adjustment usually combines the following elements : devaluation of the national currency (in order to bring down the prices of exported goods and attract strong currencies), rise in interest rates (in order to attract international capital), reduction of public expenditure (’streamlining’ of public services staff, reduction of budgets devoted to education and the health sector, etc.), massive privatisations, reduction of public subsidies to some companies or products, freezing of salaries (to avoid inflation as a consequence of deflation). These SAPs have not only substantially contributed to higher and higher levels of indebtedness in the affected countries ; they have simultaneously led to higher prices (because of a high VAT rate and of the free market prices) and to a dramatic fall in the income of local populations (as a consequence of rising unemployment and of the dismantling of public services, among other factors).

IMF : http://www.worldbank.org/ programmes that followed in the early eighties. Tunisia and Egypt campaigned to cancel the odious debts contracted by the dictators who were ousted by the revolutions. Initiatives have emerged in the recent Lebanese popular movement calling for stopping the payment of debts and enacting a program of social, food and health protection reforms for the population. In the context of the Corona crisis at the global level, calls for stopping the payment of public debts of countries from the Global South increased. Therefore, we must continue to mobilize at the level of our region to impose a unilateral and sovereign moratorium on debt repayments in our countries that are threatened by a humanitarian catastrophe due to the absence of conditions to cope with the Corona outbreak. Popular control must also be established over the funds that will be freed by stopping the payments, which must be spent first on health needs and support for the groups mostly affected by the Corona crisis. The moratorium on repayments must be coupled with the establishment of mechanisms for auditing public debts that would enable the majority of citizens to be involved in identifying the illegitimate, odious and illegal sections of these debts, which must be cancelled and entirely revoked. The freed up resources will be allocated to implement economic, social and environmental measures that derive their foundations from the basic needs of the working classes, small-scale producers and marginalized groups in general.

The cancellation of public debt will inevitably entails the need to break with the World Bank World Bank
WB The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

and the International Monetary Fund IMF
International Monetary Fund Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

http://imf.org . These two institutions have supported the dictatorial regimes in our region, aligned themselves with the major imperialist powers and the Zionist state in occupied Palestine in order to curb the revolutionary process, and have continued to deepen indebtedness and adapt our economies to serve multinational companies and major financial speculators globally. The emancipation of our peoples from the yoke of tyranny will not be complete without creating this rupture from the centres of imperialist decision-making.

 Illegal private debts

Public debts are paid at the expense of the deteriorating social conditions of the majority of the working and popular classes and their low annual income. This situation forces them, in turn, to borrow from banks, housing, consumption and micro-credit institutions at high interest rates Interest rates When A lends money to B, B repays the amount lent by A (the capital) as well as a supplementary sum known as interest, so that A has an interest in agreeing to this financial operation. The interest is determined by the interest rate, which may be high or low. To take a very simple example: if A borrows 100 million dollars for 10 years at a fixed interest rate of 5%, the first year he will repay a tenth of the capital initially borrowed (10 million dollars) plus 5% of the capital owed, i.e. 5 million dollars, that is a total of 15 million dollars. In the second year, he will again repay 10% of the capital borrowed, but the 5% now only applies to the remaining 90 million dollars still due, i.e. 4.5 million dollars, or a total of 14.5 million dollars. And so on, until the tenth year when he will repay the last 10 million dollars, plus 5% of that remaining 10 million dollars, i.e. 0.5 million dollars, giving a total of 10.5 million dollars. Over 10 years, the total amount repaid will come to 127.5 million dollars. The repayment of the capital is not usually made in equal instalments. In the initial years, the repayment concerns mainly the interest, and the proportion of capital repaid increases over the years. In this case, if repayments are stopped, the capital still due is higher…

The nominal interest rate is the rate at which the loan is contracted. The real interest rate is the nominal rate reduced by the rate of inflation. . In the context of the economic crisis exacerbated by the outbreak of the Corona pandemic, unemployment will rise and the difficulties of these groups in covering living, health and education expenses will increase. The indebtedness of small-scale producers, such as the toiling peasants, who live through a severe process of impoverishment that threatening their own existence, will be exacerbated. Hence the necessity of calling for stopping the payment of various debts, organizing a popular campaign to investigate all forms of plunder and unfair conditions imposed by financial sector institutions, and scrutinizing the illegitimate and illegal foundations to cancel repaying these loans.

 Nationalization / socialisation of the banking sector

To emphasise social and environmental priorities, it is crucial to establish an interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. -free public borrowing system rather than promoting loans with interests that develop profits for financial capital. This, in turn, assumes the socialisation of the banking sector, that is, confiscation without any compensation for the major shareholders in banks, and linking it to the public sector under popular control. Socialisation has a much more radical content than nationalisation, which may be limited to the state buying the shares of the big capitalists at high prices. It is this radical content that was strongly proposed in the recent Lebanese popular movement when active groups demanded the fall of the rule of banks, the fall of the ruling oligarchy, the condemnation of corrupt officials, and the building of an economy based on social justice.

 Cancelling the “free trade” agreements, including the Deep and Comprehensive Free Trade Agreements (DCFTA)

The “free trade” agreements are neo-colonial agreements that have been imposed on our peoples. They deepen dependency and trade deficits, increased our reliance on food imports from the global speculative markets, and destroy productive activities, livelihoods, and permanent employment opportunities. These agreements generalised the dominance of multinationals and part of the big local capital over lucrative economic sectors, over public services, including health and medicines, and insured the protection of their “rights” through intellectual property and patent laws. The so-called new generation of free trade agreements includes all areas of economic, social, cultural, environmental areas, as is the case with the Deep and Comprehensive Free Trade Agreements (DCFTA and ALECA in French) for Morocco and Tunisia, countries that are still witnessing some mobilisations to prevent the imminent signing. Thus, “free trade” agreements, along with public debts, constitute the tools of imperialist domination over our countries. They must be abolished and we must put forward alternatives around trade cooperation that respond to the needs of peoples and are based on equality, justice and complementarity. These alternatives shall give priority to small-scale and localised channels of exchange in the North and the South, and strengthen direct relations between producers and consumers. Achieving this requires building an independent local industrial economy centred on food sovereignty and based on democracy and solidarity. Therefore, it is necessary to strengthen the rupture with the institutions of world capital, including the World Trade Organization.

 Summary

We, the signatories of this call, and in support of the gains of the popular uprisings for democracy, freedom and social justice in our region, we demand:

• A unilateral and sovereign halt of public debts payments, and the allocation of funds to public health, and in support of vulnerable groups affected by the Corona crisis,
• A citizen audit of public debts to determine their illegitimate, odious and illegal components and imposing their cancellation,
• Stopping the payment of private debts by needy families, small-scale producers, small peasants and daily workers, and organising actions against banks, housing, consumption and micro-credit institutions,
• Examining all forms of plunder and unfair conditions imposed by financial sector institutions in private loan contracts, and highlighting the illegal and unlawful grounds for their cancellation,
• Cancelling the “free trade” agreements and the DCFTAs for Tunisia and Morocco,
• Making a break with the trinity of global capital: the World Bank, the International Monetary Fund, and the World Trade Organization.

We also call for:

• Setting up a large popular committee to audit the debts of our countries at the regional level that includes all segments of society, including associations, unions, networks, progressive parties, youth, women, and the unemployed, etc.
• Supporting the campaign to reject the Deep and Comprehensive Free Trade Agreements (DCFTAs, ALECA in French) in Tunisia, and give it a regional dimension.
• Organizing a strong regional campaign, united in its goals and timeline, to denounce the colonial content of the free trade agreements as well as the plunder of the wealth of our peoples through debt mechanisms.
• Organising a popular forum, to be held after the end of the Corona virus crisis in North Africa and the Middle East to deepen the debate and exchange experiences in order to expand the struggle against debts and “free trade” agreements.

Click here to sign the petition

List of preliminary signatories

• Al Warcha media collective for socio-economic rights – Tunisia
• Tunisian Observatory of Economy – Tunisia
• ATTAC-CADTM – Morocco
• Working Group of Food Sovereignty – Tunisia
• The Initiative of Support for Cooperatives – Egypt
• North African Food Sovereignty Network
• Women and Youth Union Forum – Iraq
• Socialist Workers’ Party – Algeria
• Nomad 08 Association – Tunisia
• Tunisian Platform of Alternatives – Tunisia
• Mauritanian Network for Social Work – Mauritania
• Association “Intervention for Sustainable Fishing” – Mauritania
• Awareness Association – Sudan
• Million Rural Women – Tunisia
• Association “Social and Economic Research – Mohamed Ali El Hammi – Tunisia
• The Socialist National Democratic Party – Tunisia
• Bread and Freedom Party (in the process of constitution) – Egypt
• The Pole Party (Al Qotb) – Tunisia
• The Revolutionary Democratic National Youth Organisation “Kifah” – Tunisia
• The Right to Water Forum in the Arabic Region
• Mada Youth Network – Lebanon
• Al-Mounadila Current – Morocco
• Arab Forum of Alternatives – Lebanon
• National Union of Fishers – Coastal and Offshore fishing – Morocco
• Moroccan Commission for Human Rights – Morocco
• National Coordination of North African Food Sovereignty Network (represents 25 organisations) – Morocco
• “Matssalounach” Campaign – Tunisia
• Workers’ Club for Awareness and Solidarity – Morocco
• Iraqi Social Forum – Iraq
• Information Centre for Research and Development – Iraq
• Network of Solidarity and the Protection of Environment – Mauritania
• Moroccan Association of Human Rights – Morocco
• Sport Against Violence – Iraq
• Association “Work for the Treatment of Heart Disease Sufferers” – Mauritania
• “Shakoufian” Organisation – Iraq
• Tadhamun (Solidarity) – Iraq
• Candles for Equality Association – Morocco
• Association “Green Tunisia” – Tunisia
• Association “Health for the People” – Tunisia
• Modernity and Democracy Forum – Morocco
• National Federation of Education/UMT, democratic current – Morocco
• Workers’ Services Association – Morocco

Arabic version available here.