Committee for the Abolition of Illegitimate Debt

 1. General economic context

Before the Coronavirus pandemic the conditions for a new financial crisis were already present and global economic growth was very depressed

• Before the Coronavirus pandemic the conditions for a new financial crisis were already present and global economic growth was very depressed.

• The pandemic, that had severely hit China between December 2019 and February 2020, then Western Europe from the end of February 2020 and quickly spread to the USA as from March 2020, resulted in lockdowns in many industrialized countries, brutal falls in production and supply shortages, causing further production shortfalls in all the effected economies: Australia, New Zealand, Japan, Latin America, South Africa, North Africa, India and other Asian countries.

• This triggered the biggest economic crisis since 1929 and the 1930s.

• In the Northern countries (including China) governments and central banks responded by greatly increasing public spending financed by borrowing, when they should have taxed the rich and big companies.

• Public debt has very seriously increased throughout the World, especially in the rich countries.

The pandemic resulted in lockdowns in many industrialized countries, brutal falls in production and supply shortages

• Household debt among the popular classes has also greatly increased and the populations’ living conditions have deteriorated.

• We are not yet seeing a new public debt crisis but the pretext of reimbursement is certainly going to be used more and more to justify more rounds of attacks on social safety nets, more privatizations and lay-offs in administrations that will further degrade the remaining public services…

• The struggle against private, as much as public, debt is pivotal.

2. The coronavirus pandemic and the World health crisis

The pretext of reimbursement is certainly going to be used more and more to justify more rounds of attacks on social safety nets

The pandemic spotlights what global Capitalism has become.

Free trade and land grabbing, the systematic exploitation of nature and commons by capitalism have created the conditions that allow viruses to spread and be transmitted from animal species to humans. Forty years of withering down public health services have rendered them incapable of facing up to these kinds of epidemic situations.

Of course, the rich may be victims of the virus as well as the poor but the poor die much more frequently because of the harsh living conditions imposed on them by capitalism. So far the pandemic has caused more than 5 100 000 deaths (figure mentioned on 14 November 2021 by https://www.worldometers.info/coronavirus/). According to some sources up to 10 million deaths could have already been caused by the coronavirus.

Forty years of withering down public health services have rendered them incapable of facing up to these kinds of epidemic situations

In August 2021, less than 2% of the 1.3 billion Africans had been fully vaccinated compared to more than 60% in the populations of Western Europe and North America. In the month of June 2021, a quarter of the 2.3 billion doses that had been administered in the World had been used in the G7 countries, that count no more than 10% of the World’s population. According to data collected by researchers at Oxford University, in September 2021 only 2.1% of the population of the 27 lowest income countries had received a dose of the COVID vaccine [1]. About seven hundred million people live in the lowest income countries.

CADTM advocates

1. suspending private patents on all technologies, knowledge, treatments, medicines and vaccines related to Covid-19;
2. doing away with trade secrets and publishing information on the production costs and public investments used, in a clear and publicly accessible manner;
3. transparency and public scrutiny at all stages of vaccine development;
4. universal, free and open access to vaccination and treatment.
5. expropriating and socializating (under popular control) the private pharmaceutical industry as a basis for a universal public health system that promotes the production of generic treatments and medicines.
6. increasing public investment and budgets for public health and community 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. policies, including more staff, higher salaries and improved working conditions in these sectors;
7. introducing taxes on wealth (wealth and income of the richest 1%) to finance the effort against the pandemic and to ensure a socially just and ecologically sustainable exit from the various crises of global capitalism;
8. suspending sovereign debt payments for the duration of the pandemic and cancelling illegitimate debts and those contracted to finance the fight against the virus.

 3. Current climate and environment crises

In August 2021, less than 2% of the 1.3 billion Africans had been fully vaccinated compared to more than 60% in the populations of Western Europe and North America

One of the many consequences is the increase in the number of climate refugees (internal and cross-borders). We can indeed note the following effects on the populations:

• an increasing number of meteorological phenomena causing deaths, injuries, illness and damage, particularly in already poor and marginalised communities;

• bigger and more frequent wildfires caused by a combination of effects of climate change, disappearance of traditional maintenance methods in the countryside, galloping urbanization, intensive farming and animal stock breeding detrimental to woodlands and natural spaces;

• salinization / desertification / flooding as a result of climate change, combined with monoculture Monoculture When one crop alone is cultivated. Many countries of the South have been induced to specialize in the production of a commodity for export (cotton, coffee, cocoa, groundnuts, tobacco, etc.) to procure hard currency for debt repayments. (leading to erosion), with industrial agriculture having particularly severe consequences for rural and fishing communities;

• increasing air pollution, particularly in cities - a combination of climate change itself, fires, transport - especially diesel - and industrial expansion, particularly noticeable in mega-cities in the so-called developing countries resulting in increased pollution-related mortality;

• dispossession of indigenous peoples’ territories;

In many parts of the world, there are growing popular mobilizations on climate, environment and common goods Common goods In economics, common goods are characterized by being collectively owned, as opposed to either privately or publicly owned. In philosophy, the term denotes what is shared by the members of one community, whether a town or indeed all humanity, from a juridical, political or moral standpoint. issues.

• ocean pollution, flooding and expansion of tourism hitting fishing communities;

• relocation of the dirtiest and most toxic waste, stored without protection in poor countries in order to reduce costs, and relocation of pollution and greenhouse gas emissions through the relocation of production.

A positive development: in many parts of the world, there is growing popular consciousness on climate, environmental and common goods issues.

The CADTM supports the international appeal for climate justice which states, among other things, “Climate reparations imply that those with greater responsibility for the climate crisis must pay compensation to MAPA for the damages and losses of livelihoods, infrastructure, and communities’ lives caused by the impacts of climate change (…which starts with cancelling debt of MAPA countries, is the bare minimum that Global North countries must do in order to pay their debt for the damage and trauma caused in Global South countries”. [2]

 4. The increasing presence of authoritarian and/or dictatorial characteristics in governments throughout the World

Climate reparations imply that those with greater responsibility for the climate crisis must compensate the peoples of the most affected regions; which starts with cancelling debt

Authoritarian forms of government are much more present worldwide, although, so far, excepting two cases in Myanmar in 2020 and Sudan in 2021, not taking the form of military dictatorships. Fundamental democratic freedoms are being curtailed, often by the introduction of stricter laws, and the means of repression have been greatly reinforced, allowing for increased intrusion into the lives of individuals and organizations. The use of preventive arrests is widespread, even in the “old” bourgeois democracies.

Legislative power is being curtailed and replaced by executive power in many places.

 5. Offensives of Capital and the Patriarchy against Labour/General offensive against all categories of the oppressed

All over the world, the capitalist offensive against workers continues and worsens. Women are the hardest hit, along with ethnic minorities and oppressed ethnic majorities, immigrants and young workers. In all of the above categories, the offensive is partly a result of their position in the labour market; they are usually occupying the lowest paid jobs. Popular class women and disabled workers are the worst hit by the impact of the offensive against public services. Women, who even at the best of times have always had the major responsibility for caring for children, the sick and the elderly, are affected by closures in these services - often forcing them out of work and into even more precarious jobs. The disabled in need of certain services to work or live independently are similarly affected.

This being said, apart from a very minor category who are highly paid, which turns them into allies of the capitalist class - all categories of wage earners are targeted by the offensive, including those sectors that had historically managed to gain important labour rights, in the industrial, commercial and financial (banking, insurance) sectors and in the public services. Current tendencies in labour relations include:

• increased precariousness of working conditions and contracts;

• easy dismissals;

• stagnation or drop in the purchasing power of employees and the working class in general;

• older retirement ages with stagnation or drop in pensions;

• reduction in access to, and quality of, public services;

• reduction in the number of employees protected by collective agreements;

• attacks on the rights of trade union members and the right to organise;

• limitations on the right to strike;

• increased indebtedness of working class households all over the world (consumer debts; 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. debts;

• student debts;

• tax debts;

• survival microcredit - 80% of the 120 million people who use microcredit worldwide are women);

• increasing debts of peasants not only in countries like India where the phenomenon has taken dramatic proportions but also in the countries of the North (whether in France, Italy or the United States).

Popular class women and disabled workers are the worst hit by the impact of the offensive against public services

Resume of the patriarchal offensive:

• precariousness at work: increase in obligatory part-time working, especially for women in services (cleaning, catering, care)

• destruction of public services such as public transport, childcare: increased unpaid workload for mothers

• women’s pensions structurally very low because of years not worked (rearing children)

• discriminatory unemployment benefit regulations, lower incomes for secondary bread-winners – mostly women

• sexual harassment of women in many sectors and in precarious jobs (power of men in hiring women, see the many examples in #MeToo)

• decline in family planning, abortion rights and access to contraception: in the US both at local and state level; closure of family planning centres; non-reimbursement of contraception; lack of sex education in schools; rise of anti-abortion religious groups both in the US and in Latin America with the terrible example of Brazil (Poland offers a small hope with massive mobilizations against further restriction of abortion rights; other positive examples include the Argentinian parliament that decriminalised abortion in 2020)

• rise in fundamentalism in India and Bangladesh, public punishments of “adulteresses” or of young women having unapproved sexual contacts or revolting against harsh family regimes, such as in Saudi Arabia

• growth of the sex industry, pornography and prostitution worldwide: sale of women in Libya, slavery of immigrant women

• inequality of women even in small family farms, see Via Campesina reports

• violence against women: femicide, domestic violence, harassment of women in the street etc.

 6. The intensity of the resistance and the state of the movements that challenge the capitalist patriarchal system

The state of the movement against illegitimate debt

The CADTM has gained credibility and presence at the international level

Movements for the cancellation of illegitimate debts in the Global South continue their activities. Despite differences in analysis and methods of action, they generally succeed in collaborating at the international and national levels. The sector that favours dialogue with the major international institutions such as 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.

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

continues to be active, even if the results are very poor. The CADTM has gained credibility and presence at the international level.

• The movements against illegitimate public debts in the North are less active than in the period 2009-2016, notably because of the fall in 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. , but CADTM activities remain significant.

• Movements against illegitimate debts claimed from the working classes have gained momentum in a number of countries in the North and South.

• The CADTM network is active on all three of these battlefields in the fight against illegitimate debt.

Movements against illegitimate debts claimed from the working classes have gained momentum in a number of countries in the North and South

The movement for climate justice is the movement that has grown the most in the last ten years, which is entirely justified given the scale of the global ecological crisis. There is an encouraging difference between the illegitimate debt movements and the climate justice movement. In the climate justice movement, the younger generation is playing a more prominent role and is taking a more radical view. This is a result of the awareness of the urgency of the solutions that need to be found, the inability or unwillingness of governments to take the right decisions, and the clear link between the ecological crisis and the capitalist system as such.

Other movements

It is very encouraging to see that over the last ten years the feminist movement has had a regain in energy and activities.

The anti-racist and de-colonial movement has also expanded in recent years, with a major milestone reached with the Black Lives Matter movement in 2020, which mainly affected North America and Western Europe.

 7. The tasks for the CADTM

In the climate justice movement, the younger generation is playing a more prominent role and is taking a more radical view

• Systematically integrate a feminist approach into our understanding of the overall situation and the agenda to address the crisis.

• Better insert the CADTM’s force into mobilizations on the theme of climate change.
  CADTM members are indeed already active on the theme of the climate and environmental crisis.

• Improve our action on the issues of public and private debt

If we want to intervene in political and social struggles with real relevance to the problems as they are experienced by large sectors of the population, we need to take more account of the issues of illegitimate private debt: student debt, abusive mortgage debt, peasant debt, and debt linked to microcredit.

In the current phase of Capital’s offensive against Labour, debt operates as a mechanism of dispossession, oppression and submission much more than it did 50 years ago.

It is necessary to take up the question of public debt in order to intervene in the political struggle in a large majority of countries,

It was not possible to adopt a correct strategy in Greece from 2010 and especially in 2015 without facing the debt problem. The same is true today in Venezuela, Argentina and Mexico, as in Africa and South Asia

Integrating the question of banks into the CADTM’s proposals
In most countries the question of banks is central, whether in India, China, Europe, North America, Africa or Latin America.

What direction should the World Social Forum take in the face of the crisis?
The CADTM continues to participate in the WSF despite its weaknesses. The CADTM is open to all new initiatives likely to contribute to the reconstitution of a powerful alter globalization movement.

Translated by Mike Krolikowski and Christine Pagnoulle