Committee for the Abolition of Illegitimate Debt

We are facing a multidimensional crisis of the global capitalist system

Economic crisis : Stagnation or recession in Europe; recession in Japan; slowdown in the US economy; slowdown in India and in China; deep crisis in the car industry at a global level.

Huge increase of private debts in particular for the big corporations including big international banks and corporations like Apple.

Public debt has also raised a lot.

Creation of bubbles (stock exchange bubble, corporate bonds Corporate bonds Securities issued by corporations in order to raise funds on the Money Markets. These bonds resemble government bonds but are considered to be more risky than government bonds and other guaranteed securities such as Mortgage Backed Securities, and therefore pay higher interest rates. bubble,…) in consequence of the policies implemented by the Central Banks of the most industrialized countries.

Ecological crisis : the dramatic character of the consequences of climate change are very clear and the decrease of the economic growth is not producing a reduction of the toxic emission of gases in the atmosphere.

Trade crisis : there is a commercial war between China and the US, but also at a lower level between Europe and the US.

Crisis of several international institutions which are part the system of capitalist domination of the planet :

• Crisis of the 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.
  
  ;
• Crisis in the 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 around the policy in relation with different countries like Argentina ;
• Crisis between the federal reserve 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/ of the USA and the Trump administration;
• Crisis in the NATO NATO
  North Atlantic Treaty Organization NATO ensures US military protection for the Europeans in case of aggression, but above all it gives the USA supremacy over the Western Bloc. Western European countries agreed to place their armed forces within a defence system under US command, and thus recognize the preponderance of the USA. NATO was founded in 1949 in Washington, but became less prominent after the end of the Cold War. In 2002, it had 19 members: Belgium, Canada, Denmark, France, Iceland, Italy, Luxembourg, the Netherlands, Norway, Portugal, the UK, the USA, to which were added Greece and Turkey in 1952, the Federal Republic of Germany in 1955 (replaced by Unified Germany in 1990), Spain in 1982, Hungary, Poland and the Czech Republic in 1999. ;
• Crisis in the G8 G8 Group composed of the most powerful countries of the planet: Canada, France, Germany, Italy, Japan, the UK and the USA, with Russia a full member since June 2002. Their heads of state meet annually, usually in June or July. (between G7 and Russia);
• Crisis within the 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 .

Political crisis in important countries : Crisis in the US between the two capitalist parties: the Republicans and the Democrats impeachment;

• Crisis within the European union;
• Crisis between different factions of the big Capital in the UK around the question of the Brexit;
• Political crisis in Algeria and Sudan
  and in India and Sri Lanka;…

First Conclusion:

The capitalist system is really in crisis. In the mind of a large number of people in a lot of countries the rejection of the capitalist system is higher than it has ever been over the last 4 decades from the beginning of the neoliberal offensive under Pinochet, Thatcher and Reagan.

The offensive of the big capital against working people is still going on

But in different regions of the planet this offensive is challenged by massive mobilizations of the population.

Peoples are protesting against the increase of inequalities in a lot of countries;
People are also protesting against the authoritarian and repressive tendencies of capitalist governments.

Usually there is a spark that provokes mobilization: a price increase (e.g. for public transport as in Chile), or the imposition of an unpopular tax (such as the whatssapp tax in Lebanon) or a combination of both, such as a fuel price increase (announced in France in November 2018, in Ecuador in September 2019, in Iran at the end of 2019) or an authoritarian measure.

The list of countries where there have been massive mobilizations in 2018-2019 is impressive :

Sudan
Algeria (for one year)
Lebanon since October
Iraq since November
Iran in the last months

Nicaragua between April and July 2018
Chile from October 2019
Ecuador in September-October 2019
Colombia in November 2019
Haiti in 2018 and in 2019
Puerto Rico in July 2019

France
Bulgaria
Romania
Russia (against pension counter-reforms in 2018 and for democratic elections and against repression in 2019)

India
Pakistan: student mobilizations from November 2019

Hong Kong
We have to add the Big Mobilizations of the youth against the ecological crisis in the most industrialized countries: European countries, Canada, Australia, but also some Latin American countries,…

Also the Big mobilizations of women’s movements and feminist movements in different countries like the USA in 2017, in Argentina since 2017-2018, in Spain in 2018-2019 with a massive feminist strike of 6 million women, in Poland against the penalization of abortion, and other European countries.

Leftist ideas received an important echo in the population of several highly industrialized countries: see the support to the Corbyn Labour program in 2017 and to the campaign of Bernie Sanders in the USA in 2016 and now in 2020.

Second conclusion:

Peoples want radical solutions against the profound multidimensional crisis of the capitalist system
Radical right wing extremism can gain the political battle with the Left if the radical left is incapable of proposing radical leftist solutions.
The radical left should be clearly anticapitalist, antiracist, internationalist, feminist and ecologist/socialist.

There is a crisis of the radical left program and the militants and activists should be part of rebuilding a program towards democratic ecologist-feminist-socialism.

Third conclusion

The question of opposing the Debt System is vital
We must oppose the Debts whenever they are illegitimate.
More and more people are suffering around the planet because of the increase of public illegitimate debts.
And because of the increase of the private debt provoked by microcredit agencies; resulting from abusive 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. loans; because of abusive lending to peasants; because of abusive lending to students.

The CADTM is calling for the abolition of illegitimate public debts and urges citizens to mobilize in order to audit the debt.

The CADTM is also calling for the abolition of private illegitimate debts.

The main reason why CADTM is organizing this 8^th CADTM South Asian workshop here in Colombo (http://www.cadtm.org/CADTM-SOUTH-ASIA-WORKSHOP-INTERNATIONAL-FINANCIAL-INSTITUTIONS-DEBT-AND-MICRO) is because Sri Lanka is affected by a huge amount of illegitimate public debt and because the exploited people of Sri Lanka is suffering a high level of household private debt, in particular the women http://www.cadtm.org/Unitedly-we-fight-against-debt-and-all-other-oppressions

This South Asian workshop is the fourth one organized since 2008 in Sri Lanka by the CADTM international network.

Public indebtedness is not in itself a bad thing. Public authorities can use loans to:

 Finance the complete closure of thermal and nuclear power plants;
 Replace fossil energies with renewable sources of energy that respect the environment;
 Finance a conversion from current farming methods, which contribute to climate change and use a lot of chemical inputs which are responsible for the decrease in biodiversity, favouring local production of organic food to make farming compatible with our fight against climate change;
 Radically reduce air and road transport and develop collective transport and the use of railways;
 Finance an ambitious programme of low energy social housing.

Public debt could be used to finance ambitious programmes of ecological transition instead of to enforce anti-social, extractivist, productivist policies that foster competition between nations.

Public borrowing is quite legitimate if it serves legitimate projects and if those who contribute to the loan do so legitimately.

A popular government will not hesitate to force corporations (whether national, foreign or multinational) as well as richer households to contribute to the loan without drawing any 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. from it, i.e. with zero interest and without compensation in the case of 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. .

At the same time, a large portion of households in the popular classes will easily be persuaded to entrust their savings to the public authorities to fund the legitimate projects mentioned above. This voluntary funding by the popular classes would be remunerated at a positive actual rate, for instance 4%. This means that if annual inflation reached 3%, the public authorities would pay a nominal interest rate of 7%, to guarantee an actual rate of 4%.

Such a mechanism would be perfectly legitimate since it would finance projects that are really useful to society and because it would help reduce the wealth of the rich while increasing the income of the popular classes.

Abolishing illegitimate debts must be part of a much broader programme of further measures which would trigger the adoption of a transition to a new, post-capitalist and post-productivist model. Such a programme would include abandoning austerity policies, socialising the banking and insurance sector, implementation of an overall tax reform with heavy taxation of capital, an overall reduction in working hours with compensatory hiring and maintaining wage levels, socialisation of the energy, water and health sectors, measures for ensuring gender parity, development of public services and social benefits and the implementation of a strongly determined ecological transition policy.

Eco-socialism must be put at the heart of the debate, not left aside. Immediate and concrete proposals must emerge. We must wage the struggle against austerity and embark on the path of an eco-socialist transition. It is of absolute and immediate necessity.