Committee for the Abolition of Illegitimate Debt

Wednesday 3 April: Cape town and Cape of Good Hope: highly visible social and racial segregation

The fourth day was spent seeing Cape Town and its region out to Cape of Good Hope about 70 km (55 miles) away. This time our guide was Hamied a retired doctor whose grand-parents had arrived in South Africa, from Ratnagiri (state of Maharashtra) in India, early in the last century. Hamied showed us how the White authorities transformed urban structures, during the 1950s-60s, in order to reinforce racial segregation. With him, we went from the previous day’s townships towards the town centre. Hamied showed us the sea-front residential area where he had lived until his family was expelled, during his adolescence, because of an ethnic cleansing operation. The sector was henceforth reserved for Whites’ residences. In fact, on our way to Cape of Good Hope we saw that this was the case in a large portion of the coastal area, especially the most agreeable sectors with most comfortable, and even luxury, homes. There we saw the White population pleasantly enjoying the services and amenities on the terraces and beaches while the black population sweats away in hotel jobs and does the menial tasks. Once at Cape of Good Hope the entry price is high so that the visitors are 90% white. The black people are working on the cash desk, maintenance or security. Social and racial segregation evidently continues.

Thursday 4 April: District 6 and the Slave Lodge

As always, today’s guide was incomparable, in the person of Marcus Salomon, whose parents arrived from Sri Lanka in the last century. Marcus is a highly experienced activist. In 1964 he was condemned to 10 years in Robben Island prison, where Mandela served 18 years, for his anti-apartheid and anti-capitalist stances within the New Unity popular Movement (more to the left than the ANC). They were not in the same prison section. The prison holds 1500 inmates. Although Marcus was freed in 1974, he was kept under house arrest for a further five years. But he never stopped campaigning and continues to this day at the age 80. He is up front on the defence of childrens’ rights and is active with AIDC. It was a pleasure and an honour to visit the museum of Cape town’s N° 6 district, in uptown Cape Town in his company (https://www.districtsix.co.za/). N° 6 district was torn down in the 1950s as part of apartheid policies. The museum is a “must see”. Later we visited the Slave Lodge (https://www.sahistory.org.za/place/slave-lodge-cape-colony), a sinister building used by the Dutch VOC to assemble slaves from the east African and east Asian coast during the later half of the 17^th century. The museum is an insight into the barbarity of the slave traders. The museum puts the history of slavery into perspective and shows that hundreds of millions of people are still subjected to different forms of slavery all over the World.

In the evening we had a long discussion with Charles Abrahams, a friend of CADTM of long standing, who has just published his latest book – Class Action (https://www.penguinrandomhouse.co.za/book/class-action-pursuit-larger-life/9781776093526).

Charles Abrahams, lawyer, tells in his book of his participation in the movement for the abolition of odious debts accumulated by the apartheid regime (chapters 24 and 25 of Class Action). In 2002, in the name of the Khulumani Support Group, a collective of more than 32 000 victims of apartheid represented by 85 individuals, Charles introduced a class action in the USA against a score of transnational corporations: 7 oil companies, 1 arms manufacturer, 8 banks, 3 vehicle constructors, 3 computer firms et 1 mining company. [1] All the corporations were accused of giving aid and support to the apartheid regime guilty of murders, torture, rape and arbitrary arrests among other crimes. The CADTM had given moral support to this action. Charles Abrahams was invited to Belgium to present the action and his articles were published on the CADTM website (http://www.cadtm.org/The-Apartheid-lawsuit). This exemplary action did not find the favour of the ANC supported government. On the contrary, the government asked US justice not to entertain the class action arguing that RSA wished to become attractive to foreign investors. In 2016, after fifteen years of combat the US supreme court threw it out and declared that it was not competent to judge the case. In the meantime, Charles Abrahams has introduced other class actions before RSA justice and obtained some positive results. Charles resumed the relatively successful class action campaigns that were taken up against corporations in the food industry (Ch 26) and big South African mining corporations (Ch 28-29). In 2003, Charles also initiated, in favour of an anti-apartheid activist, a suit to annul a 1999 loan for the purchase of arms to a value of $5 billion. This purchase that greatly increased the RSA public debt was not justified by the presence of any internal or foreign threat (Ch 27). The combat was lost and the South African people continue to repay this illegitimate debt and also the debt inherited from the apartheid period. During the evening of 4 April, after analysing all these experiences, we have concluded with Charles that it must be possible to sue the RSA government on condition that the social movements get heavily involved. Stay tuned.

Saturday 6 april, meeting at Caledon where repression caused two deaths two days previously

Sushovan and I, in the company of our hosts, Mercia (from the NGO TCOE that works with agricultural workers) and Brian (AIDC), went to Caledon a small town at 110 km (69 miles) from Cape Town (https://en.wikipedia.org/wiki/Caledon,_Western_Cape). Two days previously brutal repression had caused the deaths of two young demonstrators. (See photos here: https://twitter.com/Zolani10187767/status/1113699557861236736/photo/1?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1113699557861236736&ref_url=https%3A%2F%2Fm.news24.com%2FSouthAfrica%2FNews%2Fpolice-shoot-2-protesters-dead-in-caledon-20190404 And here: https://m.news24.com/SouthAfrica/News/police-shoot-2-protesters-dead-in-caledon-20190404 )

Caledon, South Africa, April 4, 2019

It is reported that they were killed by private security agents even if the police too did directly engage using fire arms. Another demonstrator lost an eye and two more young demonstrators were hospitalised in critical condition. They were protesting about living conditions in their district which is inhabited by 2000 people but only has eight latrines, an insufficient water supply network and no sewage system. They were only asking that local authorities improve essential public services: public sanitary facilities, access to good drinking water, better sewage system, the conditions of the roads, rubbish collections and other amenities. The local authorities called in private militia and armed police to deal with them.

We saw with our own eyes that the people live in small tin shacks, there are no pavements or paved roads. We had a meeting with dozens of people who shared their experiences with us. Among them were town councillors members of the ANC who were in opposition to a Mayor from the Democratic Alliance party (a right wing party that some breakaway ANC ex-members have joined). The people in our meeting were from a district close to the one described and closely resembled it. Even if their abodes are built of stronger stuff than the tin shacks they are no more than 22 to 30 square meters with outdoor sanitation. Having a decent home and effective public services is clearly a major problem. Repression against those who make the demands can sometimes be brutal. All along our visit we could see that demands for elementary services was a principal element of social movement. The day before our departure demonstrations took place simultaneously blocking 76 points in Western Cape province, mainly close to townships or other popular areas. This modus operandi resembles the current Yellow Vest movement in France, but also that of the piqueteros in Argentina in 2001-2002 or the protests in Haiti since the summer of 2018.

6 - 7 April: A day and a half to discuss the international situation and the state of South African struggles

Over a dozen rural and urban activists working in the Cape province were brought together by AIDC for a day and a half, Michael Lowy (https://en.wikipedia.org/wiki/Michael_L%C3%B6wy), Sushovan Dhar and myself opened the discussion with a presentation of the international situation. Then, a dozen South African activists presented their views on the ongoing social and political struggles. The majority were involved in the above mentioned struggles for better and wider public services.

Others are men and women who organize agricultural workers. While others still were union organizers in urban areas, particularly in the health sector. All are favourable to anti-capitalist, anti-racist, feminist and eco-socialist alternatives. The discussions were rich and happened as, 1400 km (950 miles) away in Johannesburg, a new party was being created, the Revolutionary Socialist Workers Party, launched by the steel workers union, which counts 300 000 members (https://www.blackagendareport.com/socialist-revolutionary-workers-party-launched-south-africa; https://citizen.co.za/news/south-africa/elections/2112169/irvin-jim-socialist-revolutionary-workers-party-fire-first-election-salvo-at-ramaphosa-anc/). During our discussions we were receiving word of the stormy debates that were going on. Several of the participants at our meeting were dubious about the new party as they saw it becoming a vertical pyramidal structure. However, all were prepared to collaborate with the new party’s members.

Monday 8 April: the vineyard workers are over exploited

With Mercia Andrews who runs the Trust for Community Outreach and Education (TCOE) (http://tcoe.org.za/ and https://www.facebook.com/tcoe.community/), an agricultural worker’s association linked to Via Campesina, we visited the wine growing region around Worcester https://en.wikipedia.org/wiki/Worcester,_Western_Cape and Robertson https://en.wikipedia.org/wiki/Robertson,_Western_Cape about 120 km (75 miles) from Cape Town. South African wine production is organized very differently from its Mediterranean counterpart, it takes the form of plantations which are mostly owned by white families descendants from Dutch Boers or French Huguenot colonizers that arrived during the second half of the 17^th century. For centuries the owners exploited slave labour until slavery was abolished. Then they hired free workers that they accommodated on their properties in tiny shacks without amenities. Now, the workers who still live on the premises are pushed out to live in the nearby villages or cities. Permits are required to visit workers on farms. Our visit to a farm was cancelled because the farm owners refused visiting permission. Instead we visited unionized farm workers familiar with TCOE at home during their lunch break. It was the southern hemisphere grape picking season. We were warmly received by the workers who showed us around their lamentably poor dwellings. In some of them the floor was not even tiled or packed earth but made of a kind of rough cement that is very difficult to keep clean. The habitations are cramped, their roofs are in asbestos-cement (fibrolite), which should be strictly prohibited. The employers leave the constructions to fall apart waiting for the occupants to leave seeking accommodation elsewhere. It is prohibited for employers to charge rent for the accommodation or evict his workers. As soon as an occupant leaves a dwelling the owners brick up the doors and windows to prevent further occupation.

We saw the workers’ pay slips: they take in about 180 euros a month for 42 hours a week in a country where the cost of living is comparable to Western Europe. The workers remain firmly installed in their dwellings because they do not have the means to pay the rents charged in town and the public transport that would allow them to travel to work is dramatically insufficient. Of course, the possession of a car or motorbike is not economically possible. The women’s situation is particularly bad. A single working mother does not have “head of family” benefits that men do, such as priority access to accommodation. The same deplorable housing conditions were seen in another plantation about 30km (19 miles) further on. As are so many popular class people, the agricultural workers are heavily in debt.

The TCOE, alongside the CSAAWU union (https://www.facebook.com/vivacsaawu/), struggle determinedly for improvements in housing, public transport and for pay rises. A few years ago a powerful social movement on the farms among the labourers obtained immediate 50% pay increases. The bosses are still after revenge and so seek to weaken the agricultural workers’ unity by imposing precarious work contracts.

On the national scale the sector employs 300 000 workers, which makes it an important sector. During our visit we were joined by three organizers, two women and a man, who were present at the 6 – 7 April meeting.

We also visited a local radio station that gives support to the struggles of the agricultural workers and envisages broadcasting a program on illegitimate debt.

Tuesday 9 April: Port Elizabeth, an industrial centre and a long standing stronghold of the ANC struggle against apartheid

On the 9^th, accompanied by Abraham Agulhas from AIDC, Sushovan and I flew to Port Elizabeth 750 km (470 miles) from Cape Town. In the 1980s this town was a stronghold, perhaps the principal stronghold, of the ANC and the South African Communist Party that had built up a strong presence in the working class districts and the principal factories. For many years Abraham Agulhas, who was a union organizer in the steelworks where he took part in some hard fought strikes. A union organizer of NUMSA, the steel workers’ union that is instrumental in the creation of the Revolutionary Socialist Workers Party (RSWP), was waiting for us at the airport and drove us to our first meeting at the Nelson Mandela University. On the way I asked him what he thought of the RSWP conference that had just taken place in Johannesburg, he told us that he was very critical since he felt they were reproducing a strategic vision close to that of the Communist Party. He also thought that the discussions had not been sufficiently democratic. He showed us his township, Kwazakhele, into which 120 000 inhabitants were squeezed with an unemployment rate of 50%. A majority of the unemployed are highly qualified, having worked in the steelworks, many of which have cut down on labour or closed altogether. At the university we were greeted by researchers who are giving assistance to township inhabitants who want to establish a solar energy producing cooperative and garden allotments to provide short food supply chains. The AIDC gives the projects financial support.

In the evening, Sushovan and I gave talks in the university auditorium on the subject “Building Alternatives to the Crisis of Capitalism”. The two other speakers were Enver Motala, who stressed the importance of self-organization in all the processes of creating alternatives, and Pat Brennan, who presented the above mentioned project going on in Kwazakhele township. As for myself I focused on the action of the CADTM, the importance of taking the question of illegitimate debt by the horns, citizens’ audits, unilateral suspension of debt repayments and debt repudiation. Sushovan presented the state of social struggles in India. There was an audience of 50, 25 women and 25 men, a third of the audience was under 35. Among them were a score of members or sympathizers of the RSWP. The debate was very interesting. The matters discussed ranged from the local questions of how, in a township, concrete alternatives may be found to improve public and private living standards and reinforce self-organization.

10 April: meeting to discuss how to re-launch a debt campaign in RSA

The following morning we boarded the plane to return to Cape Town in order to arrive in time for a 2 P.M. meeting to discuss how to re-launch a debt campaign in RSA. The meeting was called by AIDC. There were 21 participants from different organizations and research centres. I introduced the meeting by putting the twenty years of collaboration between AIDC and the CADTM into perspective. I explained how the doctrine of 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. could be applied to South Africa today. I also touched on the questions of illegitimate private debt, the importance of citizens’ audits and unilateral suspension of debt payments by governments seeking to direct resources towards social programmes. The introduction was followed by about a dozen speakers presenting different social questions and the debate was very rich. The exchange of ideas showed the 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. for the debt issue for several organizations and the interest in launching programmes of action on this theme. In fact, the question of debts has become topical since a national debate was launched on the future of Eskom, the public distributor and producer of electrical energy. Public attention was drawn to this corporation in February 2019 after highly disruptive power cuts.

Protest in front of Megawatt Park, Sunninghill, June 14, 2018

The poorest sector of the South African population does not have easy access to electrical power. In the townships many of the connections to the electrical network are pirate connections. Other groups are organized for replacing the power cut off by Eskom because of unpaid electricity bills.

The major part of the electrical energy in South Africa is produced in coal or nuclear plants, a bad choice for health and environmental reasons. (See: http://www.cadtm.org/South-Africa-the-odious-debts-generated-by-coal-fired-power-stations)

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.

granted a loan of $3.7 billion for the construction of the coal-fired Medupi power station, while the China Development Bank put up a further $1.5 billion and $2.5 billion for the Kusile power station. Eskom’s total debt comes to £33 billion. That is enormous, Eskom is on the verge of payment default and the government has just taken out a new international loan in order to refinance Eskom’s debt. Numerous movements, among which AIDC and its partners, call for the abandon of coal and nuclear energy production and the development of a vast programme of energy transition to create decent jobs and better respect for the environment.

The CADTM considers that a public debt to finance coal and/or nuclear energy production is illegitimate. These means of production are not in the interest of the South African population, nor in the interest of the World’s population. The lenders are well aware that the funds they make available will be used to construct nuclear or coal-fired power stations. What’s more, they are suspected of being accomplices in the corruption that reigns around Eskom.

The government is well aware of the drawbacks that result from coal-fired power production. An expert report on Eskom’s coal-fired plants shows that over a 21month period, between April 2016 and December 2017, there were 3200 incidents of excessive emission of sulphur dioxide (SO2) and Nitrogen oxide (NOx). [2]

According to a study by Eskom themselves, “Emissions from 13 of Eskom’s 15 coal-fired power stations cause 333 premature deaths per year at a health cost of R17.6 billion.” https://www.iol.co.za/saturday-star/eskom-emissions-bring-early-death-18283648).

On top of that, contracts that are financed by World Bank loans or by other banks and investors that purchase South African sovereign debt Sovereign debt Government debts or debts guaranteed by the government. are tainted by evident illegality: corruption, over charging and contract faults, etc.

Other public debts should also be audited and questioned: those linked to the Transnet project, the Port Elizabeth deep water port and Port Elizabeth buses, etc.
In view of the favourable tendencies of the participants in the meeting it was decided to hold another meeting on 23 April to prepare a working programme.

Thursday 11 April: Conference - “Emancipatory Visions - Building Coutner Power” (see also: http://www.cadtm.org/Emancipatory-Visions-Building-Counter-Power)

A very good atmosphere prevailed in this day long conference, which was attended by fifty people, a score of which were young participants.

The day started with Michael Lowy, who spoke of the urgent need for climate related action and the eco-socialist perspectives. The discussion dealing with the struggle in South Africa against the use of fossil fuels was very interesting. The struggles in the US were also mentioned, Bernie Sanders’ policies and the New Green Deal.

Then, I exposed the international situation, mostly centred on resistance against different attacks on rights and social conquests and in the face of different forms of oppression.

Summary of my input:

1. The women’s movement in 2017-2018-2019 was really impressive and formidable in the United States, Argentina, Spain, Poland, and indeed worldwide. This is undoubtedly the most positive international phenomenon of the last 5 years.
2. The various forms of attacks on workers’ rights, on women’s rights, on the rights of migrants, on all categories of the oppressed fortunately result in / give rise to many struggles all over the world. Feminist mobilizations are the most encouraging, but there are many others. Employee/ mobilizations are less important than before in a number of countries, but they are progressing in others, such as China and Bangla Desh. The new forms of organization or mobilization that partly respond to the loss of political weight of the organized workers movement are developing and making it possible to build new blocks of the working classes: there are similarities between the mobilizations of the Argentine piqueteros in 2001-2003 and those of the Yellow Vests in France (2018-2019), as well as the mobilizations in the Arab spring (2011), the movements of the outraged (2011) or the occupation of places in Greece (2011), Turkey (2013), Mexico against the increase in gasoline prices (2017), Nicaragua in spring 2018, Haiti in 2018-2019, in the Moroccan Rif (2018) and many other places. There are also regular mobilizations among school children. In several parts of the world, we are witnessing increasing mobilization on the issue of climate, the 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. .
3. The people want out of capitalism and we must be up to the task.
4. If we want to intervene in political and social struggles by being in phase with the problems experienced by large popular sectors, we must take into account the issues of illegitimate private debts: student debts, 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. debts, peasant debts, debts related to microcredit, consumer debt.

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

With regard to public debt, to intervene in the political struggle in a large majority of countries, the issue of public debt must be addressed.

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

The following debate was very stimulating. Zaki, an activist who was important in the struggle to gain general access to AIDS medicines, insisted on the importance of grappling with the private illegitimate debt question because a large number of South Africans are concerned. Dick agreed in saying that 34 miners were killed in the Marikana massacre. Many of the miners striking for more pay were at the end of their tether because much of their pay was stopped and paid directly to their creditors.

Also, after my introduction, the anti-capitalist and eco-socialist struggles were discussed. For the rest of the day matters of building 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. of power and cross referencing the struggles against capitalism, patriarchal-ism and climate change were also much discussed.

Friday 12 April: Taking part in the AIDC committee meeting

On Friday 12 April, last day of our mission, Sushovan and I were invited again to an AIDC committee meeting. There were thirty participants and I was asked to introduce the point concerning the international situation. I brought on the question of a new financial crisis that will have widespread effects. The principal elements of my introduction will be found here: http://www.cadtm.org/The-mountain-of-corporate-debt-will-be-the-seed-of-the-next-financial-crisis and here http://www.cadtm.org/The-Economic-Crisis-and-the-Central-Banks. Then followed a discussion on the possible effects of such an international crisis in South Africa. Noor Nieftagodien presented the political situation in South Africa on the eve of election in May 2019. Sushovan and I were favourably impressed by the quality of the many remarks and by the pluralism observed among the numerous comrades, proof of the solid roots in the social reality and great activist experience. Everybody was deeply involved in the struggles, whether urban or rural.

In the evening Sushovan and I parted, he for Nairobi where five days’ work with the CADTM chapter awaited him and myself for Europe. We were both pleased to have learned the reality of the struggles going on in South Africa and to have tightened the links to the local activists. Ways have been opened to re-launch work on the question of illegitimate debt.