G20 : They are taking us for a ride, we won’t pay their debt !

2 November 2011 by Pauline Imbach


On the occasion of the 10th edition of the People’s Forum [1], the African counterpoint to the G20 G20 The Group of Twenty (G20 or G-20) is a group made up of nineteen countries and the European Union whose ministers, central-bank directors and heads of state meet regularly. It was created in 1999 after the series of financial crises in the 1990s. Its aim is to encourage international consultation on the principle of broadening dialogue in keeping with the growing economic importance of a certain number of countries. Its members are Argentina, Australia, Brazil, Canada, China, France, Germany, Italy, India, Indonesia, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, USA, UK and the European Union (represented by the presidents of the Council and of the European Central Bank). Summit, close to 900 African activists are expected to come together in the Malian town of Niono.

Whereas Ministers from the world’s 20 richest countries, 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
Governors and Heads of State will be meeting in Cannes on 3 and 4 November, to “restore confidence, support growth and the creation of jobs, and to maintain financial stability”, African citizens will be meeting and organizing themselves to denounce the illegitimacy of that group.

The issue of European public debt will be at the heart of the discussions. In a letter addressed to the other EU leaders, José Manuel Barroso, President of the European Commission, and Herman Van Rompuy, President of the European Council, indicated that “our G20 partners are under the impression that if Europe does not resolve the sovereign debt Sovereign debt Government debts or debts guaranteed by the government. crisis which is currently affecting it, the global economy will suffer serious repercussions”.

For African peoples, public debt is nothing new. For decades now, they have had to face the greed of creditors (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
and 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.

in the lead) and severe austerity plans, “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/
plans” which have destroyed their sovereignty, plunging them into ever deepening poverty. Some 23 years ago, on 29 July 1987, Thomas Sankara, the then President of Burkina Faso, was already arguing in favour of forming a united front against debt: “The debt cannot be repaid because, first of all, if we do not pay, our financiers will not die. (…) On the other hand, if we pay, we are the ones who will die. (…) Those who led us into debt were gambling, as if they were in a casino. As long as they were winning, there was no problem. Now that they are losing, they are demanding that we reimburse the debt. And they are talking about a crisis… (…) We cannot reimburse the debt because we do not have the means to do so. We cannot repay the debt because we are not responsible for it. We cannot repay the debt because, on the contrary, the others owe us what no amount of wealth could ever repay - the blood debt”.

For more than a year now, populations have been gaining ground on the road to democracy and freedom. Revolutions sparked on the African continent, notably in Tunisia and Egypt, have opened the way to change, thanks to massive civil mobilization. Since then, people in the North, like those in the South, have found the collective force to resist. In Africa, since the Arab revolutions, demonstrations have taken place in many countries. Last 15 October, in response to the call from the “Indignado Movement”, huge demonstrations took place worldwide, with protesters refusing to pay for the crisis, refusing to pay debts that are public in name only.

This 10th People’s Forum is a fresh opportunity for Africans to come together to collectively refuse to pay the creditors. In 2009, the external public debt of all the developing countries stood at 1460 billion dollars, that is, less than the 1531 billion dollars allocated annually for the purchase of weapons. Worse yet, financing made available to the markets by the central banks and States between April and October 2008 totalled 7800 billion dollars.
Not only does the public debt of the developing countries represent but a drop in the ocean of debt, but the loans in question are largely odious and illegitimate and, as such, constitute a violation of the fundamental rights of the peoples.

From South to North, there is a real paradigm shift taking place. While in 2008 the revenue of the richest 500 individuals in the world exceeded the aggregate income of the 416 million poorest people, we need, together, to ensure a fair distribution of wealth, because “we make up 99%”.

Cancelling public debt seems to be a first step in that direction. It’s time to hear the voice of Thomas Sankara: From North to South, let’s refuse to pay the creditors by forming a united front against debt!



Translation from french: Angela Mitchell

Footnotes

[110th edition of the People’s Forum “From Siby to Niono, the people are demanding self-determination!” The Forum will be an African counter-summit to the G20, and will be held in Niono in Mali from 31 October to 3 November 2011. Consult: http://www.cadtm.org/Forum-des-peup... http://www.forumdespeuples.org/

CADTM

COMMITTEE FOR THE ABOLITION OF ILLEGITIMATE DEBT

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