Committee for the Abolition of Illegitimate Debt

At this moment, the affected population is finding it difficult to manage the basic means of survival – food, shelter, medicines, hygiene, etc. It is also observed that the disaster has put lives, livelihoods, and vital crops at grave risk, ruling out the slightest chances of normalization. Moreover, the region faces the risk of Cyclone Batsirai and its impending catastrophe.

According to the UN, extreme weather events like cyclones have become more frequent and intense in Southern Africa – driving hunger and eroding development, causing devastation sometimes in a matter of hours. Climate change has aggravated the risk of extreme weather in the region, forcing millions into a sub-human existence. The region is already plagued by deep poverty, unemployment, access to basic services, etc. According to Human Development Index (HDI) 2019, Southern Africa is the most ‘unequal’ region on the continent in terms of income.

The CADTM strongly feels that the population needs justice, and with Mozambique already embroiled in a deep debt trap and countries like Zimbabwe and Malawi following heels, the region needs urgent debt justice.

The CADTM demands:

• The immediate suspension of debt payment by Mozambique, Zimbabwe, Malawi and all other affected countries of the region.
• Citizens’ debt audit to ascertain the portion of illegitimate and odious debt Odious Debt According to the doctrine, for a debt to be odious it must meet two conditions:
  1) It must have been contracted against the interests of the Nation, or against the interests of the People, or against the interests of the State.
  2) Creditors cannot prove they they were unaware of how the borrowed money would be used.
  
  We must underline that according to the doctrine of odious debt, the nature of the borrowing regime or government does not signify, since what matters is what the debt is used for. If a democratic government gets into debt against the interests of its population, the contracted debt can be called odious if it also meets the second condition. Consequently, contrary to a misleading version of the doctrine, odious debt is not only about dictatorial regimes.
  
  (See Éric Toussaint, The Doctrine of Odious Debt : from Alexander Sack to the CADTM).
  
  The father of the odious debt doctrine, Alexander Nahum Sack, clearly says that odious debts can be contracted by any regular government. Sack considers that a debt that is regularly incurred by a regular government can be branded as odious if the two above-mentioned conditions are met.
  He adds, “once these two points are established, the burden of proof that the funds were used for the general or special needs of the State and were not of an odious character, would be upon the creditors.”
  
  Sack defines a regular government as follows: “By a regular government is to be understood the supreme power that effectively exists within the limits of a given territory. Whether that government be monarchical (absolute or limited) or republican; whether it functions by “the grace of God” or “the will of the people”; whether it express “the will of the people” or not, of all the people or only of some; whether it be legally established or not, etc., none of that is relevant to the problem we are concerned with.”
  
  So clearly for Sack, all regular governments, whether despotic or democratic, in one guise or another, can incur odious debts. . Launch a vast audit program with citizen participation to highlight all forms of spoliation and exploitation of the people.
• No new loans by International Financial Institutions or other lenders under the pretext of reconstruction or rebuilding the economy. Only grants under citizen control can be accepted.
• Repatriation of ill-gotten gains stashed away abroad by the ruling classes.
• Unconditional aid and humanitarian assistance for the suffering population.
• A strong resolve to reverse climate change.

Beyond the immediate petition, we would like to draw the attention of movements and organisations of Southern Africa and elsewhere to a series of demands that can arm our struggles better.

• Strictly respect the primacy of human rights over all other rights.
• Oppose the systematic promotion of the private sector to finance the development of countries of the South, and in particular oppose the promotion of Public/Private Partnerships (PPPs).
• Put an end to neo-liberal policies and the privatization of public services.
• Repeal a series of international, multilateral and/or bilateral treaties (economic, commercial, political, military, etc.) that are contrary to the exercise of the full sovereignty of the States of the South and to the interests of the peoples of the South and, more broadly, to the general 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. of humanity.
• Impose heavy fines on companies that have plundered the peoples of the South in various forms in order to contribute financially to a special aid and compensation fund.
• Finance the countries of the South, excluding official development assistance 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. , by means of zero-interest loans, repayable in whole or in part in the currency desired by the debtor.
• Expropriate “ill-gotten goods” by the rulers and ruling classes of the South and return them to the populations concerned and under their control.
• Put an end to official development assistance in its current form as it is essentially an instrument of domination for the almost exclusive benefit of the countries of the North and to replace it with an unconditional “Contribution of reparation and solidarity” in the form of grants, excluding in its calculation debt cancellations and amounts that do not serve the interests of the populations of the South. This contribution must correspond to at least 1% of the gross national income of the most industrialized countries.
• Issue an official public apology for all the wrongdoings committed by Colonial powers towards the populations of the South, entitling them to reparations.
• Affirm the right to reparations and/or compensation to peoples who were victims of colonial plunder and spoliation through the debt mechanism.
• Acknowledge the ecological debt of industrialized countries to the countries of the South and make reparations and/or compensation by recovering the cost of these expenses through a tax or fines levied on the large companies responsible for pollution.
• Prohibit companies from speculating on the resources and production of the countries of the South.
• Heavily punish companies guilty of any form of corruption by public officials of the countries of the South.
• Sanction senior officials and political personnel who in Northern countries have favoured or are favouring the spoliation in various forms of the peoples of the South.
• Heavily sanction banks (including withdrawal of banking licences) that launder dirty money and are complicit in tax evasion, capital flight, and spoliation of the populations of the South.
• Subject all bilateral and multilateral investment and trade treaties to a citizen participation audit and suspend their application for the duration of the audit. Repeal all treaties that will be deemed illegitimate and/or abusive.
• Disobey WTO WTO
  World Trade Organisation The WTO, founded on 1^st January 1995, replaced the General Agreement on Trade and Tariffs (GATT). The main innovation is that the WTO enjoys the status of an international organization. Its role is to ensure that no member States adopt any kind of protectionism whatsoever, in order to accelerate the liberalization global trading and to facilitate the strategies of the multinationals. It has an international court (the Dispute Settlement Body) which judges any alleged violations of its founding text drawn up in Marrakesh.
  
  provisions and terminate all free trade, partnership and investment agreements with the countries of the South.
• Encourage the exercise of popular sovereignty in the countries of the South to develop fair trade that respects social and environmental justice and to set up real cooperation mechanisms that put an end to looting and promote the emergence of their economies.
• Support measures for food sovereignty and for ecological and socially fair production in the countries of the South.
• Exit the WTO and call for an international campaign against this institution and its two counterparts, the WB 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 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 for their replacement by democratic institutions of solidarity.
• End dispute settlement mechanisms that allow large corporations to claim huge sums of money from states if the latter take measures in the general interest that reduce the profits of private capitalist interests. The government will then institute a procedure to leave the 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 (= World Bank body) and the Dispute Settlement Body of the WTO.
• Institutionalize an accepted and legitimate arbitration procedure that consists of prosecuting transnational corporations within its national jurisdiction and increasing their financial penalties according to the gravity of their violation of the sovereignty of peoples, and/or of social and environmental standards.
• Support the initiative for a legally binding treaty compelling transnational corporations to respect human rights in all their aspects: civil, political, economic, social and cultural.

More details about the above demands can be obtained here:

• ReCommons Europe
• CADTM Political Charter