Committee for the Abolition of Illegitimate Debt

The ‘debt system’ involves using public resources to pay creditors instead of meeting the basic rights and needs of people. The relationship between creditors and debtors is strongly biased in favour of the former. In both the 1982 external debt crisis in Latin America and the 2010 euro crisis, the first response was to deny the obvious and not do anything. Measures were then implemented to protect creditors’ interests. In an attempt to reverse the trend in public deficit and ensure debt repayments would be made, 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/ or austerity policies were applied, whatever the price to be paid by the people who were victims of the crisis.

With support from local elites, creditors demand debt repayment and ‘adjustments’ that ensure debt repayment takes priority over any social needs, thus infringing on the people’s basic rights. Furthermore, the measures implemented turn out to be counter-productive, because they only make the problem worse. As a consequence, excessive debt becomes a structural issue.

The “Debt system” aggravate the inéqualities

Debt makes it possible for a privileged minority to pocket financial benefits and thereby increase their wealth continuously. Consequently the State does not have the resources necessary to meet the basic needs of the people. Inequalities increase as the rich accumulate wealth and are in a position to exert pressure on decision-makers so as to influence public policy. The rise of the debt and its concentration in a few hands leads to a redistribution of income in favour of the richest members of society, and this, in turn, is both the cause and the consequence of increased exploitation of workers and natural resources.

In response to this situation, the CADTM, together with other associations, argues that public debt must be audited under citizen control to determine its origin and what part can be considered illegitimate and/or illegal and therefore be cancelled.

Over and beyond this necessary audit, the CADTM denounces the entire ‘debt system’. The selfsame mechanisms of domination and exploitation govern illegitimate public and private debt, thus subjugating people collectively and as individuals in the lower classes (indebted smallholders, families evicted from repossessed homes, women enslaved to the microcredit system in the South, indebted students...).

Of course, the cancellation of illegitimate debts must go hand in hand with other measures such as the socialisation of the banking and insurance sector to transform it into a public service, the radical reform of the taxation system in favour of the overwhelming majority of people, the expropriation of the energy sector and its transformation into a public service, the radical reduction of working hours resulting in more jobs as well as an increase in wages and social benefits, the improvement and strengthening of public services, improvements in the distributive pension system, effective gender equality, radical political reforms including changed constitutional processes. These measures must be part of a vast plan for a social, ecological, and political transition in order to move beyond the devastating capitalist system. Fighting the ‘debt system’ is part of a wider struggle for a world that would be free of all forms of oppression and exploitation.

THE END

ATTAC: Association for the Taxation of Financial Transactions and for Citizens’ Action

BIS Bank for International Settlements
BIS The BIS is an international organization founded in 1930 charged with fostering international monetary and financial cooperation. It also acts as a bank for central banks. At present, 60 national central banks and the ECB are members.

http://www.bis.org/about/ : Bank for International Settlements

CAC: Citizen Audit Collective

CAC 40: index of 40 largest corporations listed on the Paris Bourse

CADTM: Committee for the Abolition of Third World Debt

CETIM: Europe- Third World Centre (Geneva, Switzerland)

DC: Developing Countries

DRC: Democratic Republic of Congo

ECB ECB
European Central Bank The European Central Bank is a European institution based in Frankfurt, founded in 1998, to which the countries of the Eurozone have transferred their monetary powers. Its official role is to ensure price stability by combating inflation within that Zone. Its three decision-making organs (the Executive Board, the Governing Council and the General Council) are composed of governors of the central banks of the member states and/or recognized specialists. According to its statutes, it is politically ‘independent’ but it is directly influenced by the world of finance.

https://www.ecb.europa.eu/ecb/html/index.en.html : European Central Bank Central Bank The establishment which in a given State is in charge of issuing bank notes and controlling the volume of currency and credit. In France, it is the Banque de France which assumes this role under the auspices of the European Central Bank (see ECB) while in the UK it is the Bank of England.

ECB : http://www.bankofengland.co.uk/Pages/home.aspx

ECLAC: Economic Commission for Latin America and the Caribbean

EU: European Union

FAO: Food and Agriculture Organisation, United Nations Organisation for food and agriculture

GDP GDP
Gross Domestic Product Gross Domestic Product is an aggregate measure of total production within a given territory equal to the sum of the gross values added. The measure is notoriously incomplete; for example it does not take into account any activity that does not enter into a commercial exchange. The GDP takes into account both the production of goods and the production of services. Economic growth is defined as the variation of the GDP from one period to another. : Gross Domestic Product

G7: Group of the 7 most industrialised countries (Germany, Canada, United States, France, United Kingdom, Italy, Japan)

HDI: Human Development Index

HIPC Heavily Indebted Poor Countries
HIPC In 1996 the IMF and the World Bank launched an initiative aimed at reducing the debt burden for some 41 heavily indebted poor countries (HIPC), whose total debts amount to about 10% of the Third World Debt. The list includes 33 countries in Sub-Saharan Africa.

The idea at the back of the initiative is as follows: a country on the HIPC list can start an SAP programme of twice three years. At the end of the first stage (first three years) IMF experts assess the ’sustainability’ of the country’s debt (from medium term projections of the country’s balance of payments and of the net present value (NPV) of debt to exports ratio.
If the country’s debt is considered “unsustainable”, it is eligible for a second stage of reforms at the end of which its debt is made ’sustainable’ (that it it is given the financial means necessary to pay back the amounts due). Three years after the beginning of the initiative, only four countries had been deemed eligible for a very slight debt relief (Uganda, Bolivia, Burkina Faso, and Mozambique). Confronted with such poor results and with the Jubilee 2000 campaign (which brought in a petition with over 17 million signatures to the G7 meeting in Cologne in June 1999), the G7 (group of 7 most industrialised countries) and international financial institutions launched an enhanced initiative: “sustainability” criteria have been revised (for instance the value of the debt must only amount to 150% of export revenues instead of 200-250% as was the case before), the second stage in the reforms is not fixed any more: an assiduous pupil can anticipate and be granted debt relief earlier, and thirdly some interim relief can be granted after the first three years of reform.

Simultaneously the IMF and the World Bank change their vocabulary : their loans, which so far had been called, “enhanced structural adjustment facilities” (ESAF), are now called “Growth and Poverty Reduction Facilities” (GPRF) while “Structural Adjustment Policies” are now called “Poverty Reduction Strategy Paper”. This paper is drafted by the country requesting assistance with the help of the IMF and the World Bank and the participation of representatives from the civil society.
This enhanced initiative has been largely publicised: the international media announced a 90%, even a 100% cancellation after the Euro-African summit in Cairo (April 2000). Yet on closer examination the HIPC initiative turns out to be yet another delusive manoeuvre which suggests but in no way implements a cancellation of the debt.

List of the 42 Heavily Indebted Poor Countries: Angola, Benin, Bolivia, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Comoro Islands, Congo, Ivory Coast, Democratic Republic of Congo, Ethiopia, Gambia, Ghana, Guinea, Guinea-Bissau, Guyana, Honduras, Kenya, Laos, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Myanmar, Nicaragua, Niger, Rwanda, Sao Tome and Principe, Senegal, Sierra Leone, Somalia, Sudan, Tanzania, Togo, Uganda, Vietnam, Zambia. : Heavily Indebted Poor Countries

ICAN: International Citizen debt Audit Network

ICSID ICSID The International Centre for the Settlement of Investment Disputes (ICSID) is a World Bank arbitration mechanism for resolving disputes that may arise between States and foreign investors. It was established in 1965 when the Washington Convention of that year entered into force.

Contrary to some opinions defending the fact that ICSID mechanism has been widely accepted in the American hemisphere, many States in the region continue to keep their distance: Canada, Cuba, Mexico and Dominican Republic are not party to the Convention. In the case of Mexico, this attitude is rated by specialists as “wise and rebellious”. We must also recall that the following Caribbean States remain outside the ICSID jurisdiction: Antigua and Barbuda, Belize, Dominica (Commonwealth of) and Suriname. In South America, Brazil has not ratified (or even signed) the ICSID convention and the 6^th most powerful world economy seems to show no special interest in doing so.

In the case of Costa Rica, access to ICSID system is extremely interesting: Costa Rica signed the ICSID Convention in September, 1981 but didn’t ratify it until 12 years later, in 1993. We read in a memorandum of GCAB (Global Committee of Argentina Bondholders) that Costa Rica`s decision resulted from direct United States pressure due to the Santa Elena expropriation case, which was decided in 2000 :
"In the 1990s, following the expropriation of property owned allegedly by an American investor, Costa Rica refused to submit the dispute to ICSID arbitration. The American investor invoked the Helms Amendment and delayed a $ 175 million loan from the Inter-American Development Bank to Costa Rica. Costa Rica consented to the ICSID proceedings, and the American investor ultimately recovered U.S. $ 16 million”.

https://icsid.worldbank.org/apps/ICSIDWEB/Pages/default.aspx : International Centre for Settlement of Investment Disputes (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.

Group)

IFI: International Financial Institutions

ILO: International Labour Organisation

IMF 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 : International Monetary Fund

NGO: Non-Governmental Organisation

ODA ODA
Official Development Assistance Official Development Assistance is the name given to loans granted in financially favourable conditions by the public bodies of the industrialized countries. A loan has only to be agreed at a lower rate of interest than going market rates (a concessionary loan) to be considered as aid, even if it is then repaid to the last cent by the borrowing country. Tied bilateral loans (which oblige the borrowing country to buy products or services from the lending country) and debt cancellation are also counted as part of ODA. Apart from food aid, there are three main ways of using these funds: rural development, infrastructures and non-project aid (financing budget deficits or the balance of payments). The latter increases continually. This aid is made “conditional” upon reduction of the public deficit, privatization, environmental “good behaviour”, care of the very poor, democratization, etc. These conditions are laid down by the main governments of the North, the World Bank and the IMF. The aid goes through three channels: multilateral aid, bilateral aid and the NGOs. : Official Development Assistance

OECD OECD
Organisation for Economic Co-operation and Development OECD: the Organisation for Economic Co-operation and Development, created in 1960. It includes the major industrialized countries and has 34 members as of January 2016.

http://www.oecd.org/about/membersandpartners/ : Organization for Economic Co-operation and Development

PAH: Plataforma de Afectados por la Hipoteca, Mortgage Mortgage A loan made against property collateral. There are two sorts of mortgages:
1) the most common form where the property that the loan is used to purchase is used as the collateral;
2) a broader use of property to guarantee any loan: it is sufficient that the borrower possesses and engages the property as collateral. Victims’ Platform in Spain

PPP: Purchasing Power Parity

SAP: Structural Adjustment Programme

TARP: Troubled Asset Asset Something belonging to an individual or a business that has value or the power to earn money (FT). The opposite of assets are liabilities, that is the part of the balance sheet reflecting a company’s resources (the capital contributed by the partners, provisions for contingencies and charges, as well as the outstanding debts). Relief Programme

UNCTAD UNCTAD
United Nations Conference on Trade and Development This was established in 1964, after pressure from the developing countries, to offset the GATT effects.

: United Nations Conference on Trade and Development

VAT: Value Added Tax

WB: World Bank

Sub-Saharan Africa: Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Cape Verde, Central African Republic, Chad, Comoros, Congo, Democratic Republic of Congo (DRC), Eritrea, Ethiopia, Gabon, Gambia, Ghana, Guinea, Guinea-Bissau, Ivory Coast, Kenya, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mauritius, Mozambique, Namibia, Niger, Nigeria, Rwanda, Sao Tome and Principe, Senegal, Seychelles, Sierra Leone, Somalia, South Africa, Sudan, South Sudan, Swaziland, Tanzania, Togo, Uganda, Zambia, Zimbabwe.

Latin America and the Caribbean: Argentina, Belize, Bolivia, Brazil, Colombia, Costa Rica, Cuba, Dominica, Dominican Republic, Ecuador, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, St. Lucia, St. Vincent and the Grenadines, Suriname, Venezuela.

East Asia and Pacific: American Samoa, Burma (Myanmar), Cambodia, China, Federated States of Micronesia, Fiji, Indonesia, Lao PDR, Kiribati, Marshall Islands, Malaysia, Mongolia, North Korea, Palau, Papua New Guinea, Philippines, Samoa, Solomon Islands, Thailand, Timor-Leste, Tonga, Vanuatu, Vietnam.

South Asia: Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka.

Europe and Central Asia:
Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Georgia, Hungary, Kazakhstan, Kosovo, [1] Kyrgyz Republic,
Macedonia, Moldova, Montenegro, Romania, Serbia, Tajikistan, Turkey, Turkmenistan, Ukraine, Uzbekistan.

Middle East and North Africa: Algeria, Djibouti, Egypt, Iraq, Iran, Jordan, Lebanon, Libya, Morocco, Syrian Arab Republic, Tunisia, Yemen Rep.

Afghanistan, Benin, Bolivia, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Comoros, Republic of Congo, Democratic Republic of Congo, Côte d’Ivoire, Eritrea, Ethiopia, The Gambia, Ghana, Guinea, Guinea-Bissau, Guyana, Haiti, Honduras, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Sao Tomé-& Principe, Senegal, Sierra Leone, Somalia, Sudan, Tanzania, Togo, Uganda, Zambia.

Andorra, Australia, Austria, Bahamas, Bahrain, Barbados, Belgium, Brunei, Canada, Croatia, Cyprus, Czech Republic, Denmark, Equatorial Guinea, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Kuwait, Liechtenstein, Luxembourg, Malta, Monaco, the Netherlands, New Zealand, Norway, Oman, Poland, Portugal, Qatar, San Marino, Saudi Arabia, Singapore, Slovakia, Slovenia, South Korea, Spain, Sweden, Switzerland, Taiwan, Trinidad and Tobago, United Arab Emirates, United Kingdom, United States.

Sources used for glossary

• FT: Financial Times. http://lexicon.ft.com/
• OECD Glossary of Statistical Terms. http://stats.oecd.org/glossary/detail.asp?ID=1163
• CADTM

Amortisation: Repayment of principal without taking account of 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. .

Asset: something belonging to an individual or a business that has value or the power to earn money (FT). The opposite of assets are liabilities Liabilities The part of the balance-sheet that comprises the resources available to a company (equity provided by the partners, provisions for risks and charges, debts). , that is the part of the balance Balance End of year statement of a company’s assets (what the company possesses) and liabilities (what it owes). In other words, the assets provide information about how the funds collected by the company have been used; and the liabilities, about the origins of those funds. sheet reflecting a company’s resources (the capital contributed by the partners, provisions for contingencies and charges, as well as the outstanding debts).

Bank for International Settlements (BIS): the BIS is an international organisation established in 1930, which is responsible for fostering international monetary and financial cooperation. It also acts as a bank for the central banks, with 56 central banks that are members.

Central bank: The central bank of a country defines its monetary policy and issues all national currency. Commercial banks obtain their currency from it, at a supply price determined according to the prime rate charged by the central bank.

Currency: (see also: strong currency)The monetary unit of a country or monetary zone. There is a rate for each currency that permits an exchange rate to be calculated between two different currencies, or to convert the value of one currency into that of the other. The principal exchange currencies have an official quoted rate on the foreign exchange market and can be freely exchanged for another currency.

Currency reserves: assets held in foreign currency by the monetary authorities of a country.

Debt rescheduling Debt rescheduling Modification of the terms of a debt, for example by modifying the due-dates or by postponing repayments of the principal and/or the interest. The aim is usually to give a little breathing space to a country in difficulty by extending the period of repayment and reducing the amount of each instalment or by granting a period of grace during which no repayments will be made. : modification of the terms of an existing loan, which may include modifying the maturity dates or extending the date to pay back capital and/or interest. In general, the goal is to give the country experiencing economic difficulties a bit of room to breath, by extending the amount of time to pay off the loan so as to decrease each payment or by giving it a grace period during which repayments may be interrupted.

Debt service Debt service The sum of the interests and the amortization of the capital borrowed. : total amount of interest and capital payments made during a given period of time.

Debt stock Debt stock The total amount of debt : total amount of debt owed.

Devaluation Devaluation A lowering of the exchange rate of one currency as regards others. : official lowering of the exchange rate value of one currency in relationship to the others, on the international monetary market.

European Central Bank (ECB): the European Central Bank is a European institution based in Frankfurt, established in 1998. Eurozone countries have transferred their monetary powers to it, and its official role is to ensure price stability by combating inflation Inflation The cumulated rise of prices as a whole (e.g. a rise in the price of petroleum, eventually leading to a rise in salaries, then to the rise of other prices, etc.). Inflation implies a fall in the value of money since, as time goes by, larger sums are required to purchase particular items. This is the reason why corporate-driven policies seek to keep inflation down. within the Eurozone. According to its Articles of Agreement, it is politically ‘independent’ but it is directly influenced by the world of finance.

Eurostat: The European Union’s Directorate-General of Statistics that has its head office in Luxembourg.

External debt: external debt is owed to foreign lenders. It includes external public debt and external private debt. External debt is generally expressed in strong currencies.

FED FED
Federal Reserve Officially, Federal Reserve System, is the United States’ central bank created in 1913 by the ’Federal Reserve Act’, also called the ’Owen-Glass Act’, after a series of banking crises, particularly the ’Bank Panic’ of 1907.

FED – decentralized central bank : http://www.federalreserve.gov/ or Federal Reserve: (officially, Federal Reserve System) the United States central bank created in 1913 by the Federal Reserve Act (or Owen-Glass Act), after a series of banking crises, particularly the ‘Bank Panic’ of 1907.

Gross Domestic Product (GDP): an aggregate measure of total production within a given territory equal to the sum of the gross values added. The measure is notoriously incomplete because it does not take into account any activity that does not enter into a commercial exchange. The GDP takes into account both the production of goods and the production of services. Economic growth is defined as the variation of the GDP from one period to another.

Heavily Indebted Poor Countries (HIPC) Initiative: The HIPC initiative was launched in 1996 and strengthened in 1999, to reduce the debt burden of heavily indebted poor countries, with the modest objective of making their debt sustainable.
It is organised in four extremely demanding and complex phases:

• If a country wants to be included in this initiative, it must first apply economic policies approved by the IMF and World Bank for 3 years, which are known as adjustment programmes, and adopt a Poverty Reduction Strategy Paper Poverty Reduction Strategy Paper
  PRSP Set up by the World Bank and the IMF in 1999, the PRSP was officially designed to fight poverty. In fact, it turns out to be an even more virulent version of the structural adjustment policies in disguise, to try and win the approval and legitimation of the social participants. (PRSP).
• At the end of these 3 years, they reach decision point: the IMF analyses the debt of the country applying to see if it is sustainable. If the debt stock / exports ratio is greater than 150%, the country can be declared admissible.
• The State then benefits from the first debt relief form the creditor countries and private banks, and must continue applying the policies approved by the IMF and World Bank.
• The last phase is known as the completion point. The remainder of the debt relief is granted at this point to a country to enable it to acquire a sustainable position considered to be satisfactory.

Inflation: a general increase in prices (for example, an increase in the price of oil, causing a general increase in other prices, which theoretically leads to higher wages, and so on). Inflation implies a drop in the value of money, because more money is needed to purchase the same commodity at a later time. This explains why neoliberal policies make it a priority to keep inflation down.

Interest rate: When A lends money to B, B repays the amount lent by A (the capital) as well as an additional sum known as interest, so that A has an interest in agreeing to this financial operation. The total interest paid is determined by the interest rate, which may be high or low. The nominal interest rate is the rate at which a loan is contracted. The real interest rate is the nominal rate minus the rate of inflation.

International Monetary Fund (IMF): An International Financial Institution established within the framework of the Bretton Woods Agreement (1944) at the same time as the World Bank. The IMF was originally intended to support the new fixed-exchange rate system and to guarantee the stability of the international monetary system. The Bretton Woods fixed rate system came to an end in (1971), but the IMF was maintained. It starting imposing its structural adjustment programmes following the debt crisis of 1982.

Liquidities Liquidities The capital an economy or company has available at a given point in time. A lack of liquidities can force a company into liquidation and an economy into recession. : the capital an economy or a company has available at a given point in time. A lack of liquidities can force a company into liquidation and an economy into recession.

Net debt flow: the difference between amounts received as new loans and the amounts repaid (capital and interest) over the same period. The net debt flow is positive when the country or continent concerned receives more than it repays. It is negative when the amount it repays is higher than the amount that it receives.

OECD (Organisation for Economic Co-operation and Development ): an institution established in 1960 that includes the principal most industrialised countries. There were 34 members in 2013.

Official Development Assistance (ODA)
Official Development Assistance is the name given to loans granted in financially favourable conditions to developing countries by the public bodies of the industrialized countries. A loan must only be given at a lower rate of interest than the going market rate (a concessionary loan) to be considered as aid, even if it is then fully repaid by the borrowing country. Tied loans with conditions (which obligate the borrowing country to buy products or services from the lending country) and debt cancellation are also counted as part of ODA (see box in section 2.4).

Paris Club Paris Club This group of lender States was founded in 1956 and specializes in dealing with non-payment by developing countries.

: A group of lender States established in 1956 that specializes in dealing with payment defaults by developing countries.

Payable Payable A sum of money that one person (debtor) or group of people owes to another (creditor). : a sum of money that one person (debtor) owes to another (creditor).

Private debt: private debt is debt borrowed by financial institutions (banks, insurance companies, and pension funds Pension Fund
Pension Funds Pension funds: investment funds that manage capitalized retirement schemes, they are funded by the employees of one or several companies paying-into the scheme which, often, is also partially funded by the employers. The objective is to pay the pensions of the employees that take part in the scheme. They manage very big amounts of money that are usually invested on the stock markets or financial markets. ), non-financial institutions (companies), and households.

Public debt: all of the loans taken on by the national and local government, state-owned companies, and public health funds.

Sovereign debt Sovereign debt Government debts or debts guaranteed by the government. : government debt Government debt The total outstanding debt of the State, local authorities, publicly owned companies and organs of social security. or debt guaranteed by a government.

Speculation: taking a position on a market, which is often risky, in the hope of making a profit Profit The positive gain yielded from a company’s activity. Net profit is profit after tax. Distributable profit is the part of the net profit which can be distributed to the shareholders. .

Strong currency: a strong currency is a currency that has a reserve value on a foreign exchange market. The factors that contribute to making a currency strong are its long-term stability, an economic situation that is stable in terms of inflation, and the weight of the economy issuing that currency. The US dollar is the principal strong currency.

Structural adjustment: neoliberal economic policies imposed by the IMF in exchange for new loans or the rescheduling of old loans.

Structural adjustment programme (SAP): The IMF imposed structural adjustment programmes on developing countries after the 1982 debt crisis. Debt was used as an instrument for imposing policies favourable to the creditors, multinational corporations from Northern countries, those in possession the country’s capital and foreign entities. SAPs have greatly increased poverty in the countries where they have been implemented.

Troika Troika Troika: IMF, European Commission and European Central Bank, which together impose austerity measures through the conditions tied to loans to countries in difficulty.

IMF : https://www.ecb.europa.eu/home/html/index.en.html : in the framework of the European economic crisis, the Troika refers to three institutions: the European Commission (EC), the European Central Bank (ECB), and the International Monetary Fund (IMF). The Troika is supposed to monitor the countries experiencing major economic hardships which ‘benefit’ from loans granted by the European Union and the IMF. In reality, the policies imposed by the Troika do not at all help the countries overcome their economic difficulties.

World Bank (WB): An international financial institution established within the framework of the Bretton Woods Agreement (1944), initially known as the International Bank for Reconstruction and Development (IBRD), because its mission consisted in funding the rebuilding of countries after the Second World War. The World Bank has five subsidiaries (see point 4.3.3, The World Bank web). While its purported aim is to eliminate poverty, its actions have been severely criticised by numerous social movements due to the negative impact of its policies.

About the contributors

Pierre Gottiniaux is Head of Communication for CADTM Belgium.
Daniel Munevar is an economist and a member of the CADTM Latin America coordination unit.
Antonio Sanabria is an economist for CADTM Belgium.
Éric Toussaint is a political scientist and historian. He is the spokesman for CADTM International, and is on the Scientific Committee of ATTAC France.

Acknowledgements

The authors would like to thank Louise Abellard, Olivier Bonfond, and Christine Vanden Daelen for their contributions, as well as Cécile Lamarque and Anouk Renaud for proofreading the text.

Some of the texts and tables in this document were originally in Spanish. The authors would like to thank Virginie de Romanet, Julie Marsault, and Hélène Tagand for translating them into French.

The authors are particularly thankful to Maud Bailly, who played a crucial role in finalising this document, helping to improve the text and the layout.

Credits

Pages 7, 9, 32, and 63: illustrations by Titom (Creative Commons license by-nc-nd 2.0 be) - www.titom.be
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Tables, charts, and layout: Pierre Gottiniaux

World Debt Figures 2015 is placed under license CC-BY-NC :
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Further reading

• Millet, Damien & Toussaint, Éric. 65 questions, 65 réponses sur la dette, le FMI et la Banque mondiale, 2012 (out of print). Can be downloaded for free at: http://cadtm.org/65-questions-65-reponses-sur-la,8331
• Toussaint, Éric. The World Bank: a never-ending coup d’état. The hidden agenda of the Washington consensus. CADTM/Syllepse/CETIM, 2006 (out of print). Can be downloaded for free at: http://cadtm.org/IMG/pdf/Banque_mondiale_-_version_du_2_mai_2006-2.pdf
• ATTAC/AITEC/CADTM (collective work). nFMI, les peuples entrent en résistance, CADTM-Syllepse-Cetim, 2000 (out of print). Can be downloaded for free at: http://www.cetim.ch/fr/documents/PAS-texte.pdf
• Toussaint, Éric. Bancocratie, Brussels: Aden/CADTM, 2014 (in French; English version, Bankocracy, in press, Merlin Press). In your favourite bookshop or order at cadtm.org/bancocratie