We struggle against illegitimate public and private debt which are at the core of the capitalist system

Opening address at the 7th South Asian CADTM workshop - 6-8th April 2018

6 April by Eric Toussaint


(CC - Flickr - Lily Rhoads)

The seventh CADTM South Asia regional workshop started in Colombo (Sri Lanka) on April 6, 2018, with participants coming from Sri Lanka, India, Pakistan, Bangladesh, Nepal, Japan, Belgium and France. Around forty people, most of them being representatives of social movements (peasants’ movements, feminism, trade unionism, etc.), came together for the first day of this three-day long programme. Four main topics were discussed on this day: the activities of the CADTM international network and the topics it focuses on; the public debt policies of Sri Lanka; the Chinese loans and investments in South Asia; and the big corporations’ debts on a global scale as well as with a focus on Indian corporations. Below is the general introduction which was given by Éric Toussaint, spokesperson for the CADTM international network.

What we are fighting is a capitalist system that destroys nature.

We have to fight a capitalist system which, within the two centuries since the so-called Industrial Revolution, has accumulated enough greenhouse gases to trigger climate change.

It sees nature merely as resources to be extracted, exploited and traded for maximal 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. .

A capitalist system that confines the inhabitants of many countries to producing raw material to be exported at the lowest possible price.

A system that drives people to produce food they will not eat and to eat food they have not produced.

What we are fighting is a capitalist system that destroys nature

A system that sets up and maintains nuclear plants which must urgently be shut down.
A capitalist system which perpetuates or even strengthens the oppression and exploitation of women. A capitalist system which perpetuates the cast system and racist policies.

A capitalist system which increases inequalities all over the planet.

A capitalist system which goes hand in hand with the debt system.

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Participants to the 7th South Asian CADTM regional meeting (Colombo 6 - 8 April 2018)


Illegitimate private debt

The debt system existed long before the capitalist system but it has thrived under capitalism.

Private debt has been used for millennia as a way of depriving peasants of their land, craftsmen of their tools. Slavery for debt was common during Classical Antiquity and is still existing in South Asia and other part of the world.

The system of illegitimate private debt usually involves imposing conditions of loans and repayment that make the latter impossible. This results in seizure (of housing, land, working tools) and/or in the need to consign long years or indeed decades to repaying debts.

The debt system existed long before the capitalist system but it has thrived under capitalism

History is littered with uprisings against the burden of illegitimate private debt, whether in Ancient Greece, in Northern Europe during the Middle-Ages or in Asia.
Those struggles against illegitimate debts are once more in spate:
- Peasants’ struggles for debt cancellation in India
- Women’s struggles against microcredit in Morocco, Bangladesh and Sri Lanka
- Students’ struggles against student debt in the US, Chile, Canada, Japan and in the UK,
- Household struggles against abusive mortgages and house seizures in Spain, the US, Greece and in Ireland.

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Presentation of the CADTM international Network in Colombo 6th april 2018


Illegitimate public debt

The system of illegitimate debt is also used by the capitalist system to subject public policies to the demands of Capital. While public debt could be used to finance an ambitious programme of ecological transition and social justice… it is actually used to enforce anti-social, extractivist and productivist policies, policies that increase competition between peoples.

Public debt is not bad in itself. Governments can contract loans to finance the ecological transition:
- to finance the complete shutdown of nuclear plants;
- to replace fossil energies with renewable energies which respect the environment;
- to finance land reform;
- to drastically reduce road and air transport and replace them with collective transport by rail.

Public borrowing can thus be legitimate if it is used to finance legitimate projects and if those who contribute act in a legitimate way.

The CADTM believes that big companies and the richer households should contribute to non profit-making government loans, i.e. with zero 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. rate and without compensation against 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 part of the households of the popular classes which are able to spare money could make voluntary contributions to finance the state with a positive interest return rate (for instance, 3% real interest rate in favour of the savings of the popular families. If the rate of inflation is 4% a year, the nominal interest rate guaranteed by the government should be 7% in order to make sure that the real interest rate earned by these popular classes is 3%).

This mechanism would be highly legitimate as it would finance projects which are useful for society while reducing the wealth of the richest and simultaneously increasing the poorer classes’ revenues.

The opposite happens: governments and local authorities mostly borrow to finance illegitimate policies such as:
- armaments expenses;
- white elephants;
- nuclear plants;
- public-private partnerships;
- repayment of former illegitimate debts;
- bailing out banks.

Public debt is thus used to finance illegitimate expenses. The way repayment of the debt is financed is illegitimate too: big companies and the richer households pay little or no taxes. Those on limited incomes have to tighten their belts to repay the debt. In the name of debt repayment, the state implements budget cuts in the social services, thus impacting the poor. Private banks grant loans to governments at profitable rates for themselves while they borrow at a very low rate from the 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
as is the case in the Eurozone or in Japan.

Public borrowing can thus be legitimate if it is used to finance legitimate projects and if those who contribute act in a legitimate way

We can draw a straightforward conclusion: it is time to end the system of illegitimate public and private debt.

The CADTM is radically committed to fighting at local and international level with social movements and citizens toward the repudiation of illegitimate debts, whether public or private.

If public authorities with popular support wish to get involved, the CADTM is available and ready to help, for instance in the organization of citizens’ audits, as happened in Ecuador in 2007-2008, Paraguay in 2008 and Greece in 2015.


CADTM ASIA WORKSHOP 2018: INTERNATIONAL FINANCIAL INSTITUTIONS, DEBT AND MICROCREDIT, COLOMBO, 6-8 APRIL 2018

FRIDAY 6 APRIL
0900-0910: Registration
0910-0940: Welcome and Introductions
Sandun Thudugala - Law & Society Trust

Session 1: International Financial Institutions and Debt
Moderator: Linus Jayatilake - United Federation of Labour

0940-1000: Opening address: We struggle against illegitimate public and private debt
Eric Toussaint - CADTM spokeperson

1000-1030: Break

1030-1300:
- Japan: Nuclear Debt
Tsutomo Teramoto - Osaka Education and Amalgamated Workers Union
- Sri Lanka: Debt Crisis or Debt Trap?
B. Skanthakumar - Social Scientists’ Association

1300-1400: Lunch

Session 2: Chinese Loans and Investments
1400-1600:
- Moderator: Vidya Dinker - President, Indian Social Action Forum
- General Introduction
Au Loong Yu - Borderless (Hong Kong, China)
- Sri Lanka: Whose Pearl?
B. Skanthakumar - Social Scientists’ Association
- Pakistan: Economic Corridor
Abdul Khaliq - CADTM Pakistan

1600-1630: Break

Session 3: Corporate Debt and its socio-economic impacts
1630-1800:
Moderator: Rabbiya Bajwa - Advocate, Supreme Court of Pakistan
- India
Sushovan Dhar - CADTM India
- Global Perspective
Eric Toussaint - CADTM

1800: Close of Day 1


SATURDAY 7 APRIL 2018

Session 4: Microcredit, Women and Household Debt
0900-1100:
Moderator: Nalini Ratnarajah- South Asia Alliance for Poverty Eradication (SAAPE)
- Bangladesh
Monower Mostafa - Development Synergy Institute
- Japan: Student Debt
Tsutomo Teramoto - Osaka Education and Amalgamated Workers Union
- Sri Lanka
Niyanthini Kadirgamar - Collective for Economic Democratisation

1100-1130: Refreshments

Session 5: Peasant Debt, Farmer Suicides and Agrarian Crisis
1130-1330:
Moderator: Vimukthi de Silva- Movement for National Land and Agricultural Reform
- India
Sushovan Dhar- CADTM India
- Nepal
Balram Banskota - All-Nepal Peasants Federation Association
- Pakistan
Zafar Lund - Advocate, High Court of Punjab
- Sri Lanka
M. K. Jayatissa - Progressive Farmers’ Association

1330-1430: Lunch

1430-1530: Peasant Debts: Q & A

1530-1600: Refreshments

Session 6: Multilaterals: New and Old
1600-1800:
Moderator: Fatima Khilji - Senior Lawyer
- Asian Development Bank Case-Studies: Nepal: Hydropower, Big Dams
Ratan Bhandari - Jal Sarkar (Water Governance)
- Sri Lanka: Northern Province Sustainable Fisheries Development Project
S. Vishvalingam - Sri Lanka Nature Group
- Asian Infrastructure Investment Bank
Hasan Mehedi - Coastal Livelihood and Environmental Action Network
- New Development Bank
Eric Toussaint - CADTM

1800: Close of Day 2


SUNDAY 8 APRIL 2018

Session 7: Debt Audits: Campaigns against Illegitimate Debts
0900-1100:
Moderator: Marshal Fernando - Ecumenical Institute for Study and Dialogue
- Introduction
Nathan Legrand - CADTM Secretariat
- Case Studies: Ecuador and Greece
Eric Toussaint - CADTM

1100-1130: Refreshments

1130-1300:
Moderators: Sushovan Dhar & B. Skanthakumar
Strategy & Planning: Perspectives for Debt Audits in South Asia

Close of Workshop

1300-1400: Lunch



Eric Toussaint

is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Liège, is the spokesperson of the CADTM International, and sits on the Scientific Council of ATTAC France.
He is the author of Bankocracy (2015); The Life and Crimes of an Exemplary Man (2014); Glance in the Rear View Mirror. Neoliberal Ideology From its Origins to the Present, Haymarket books, Chicago, 2012 (see here), etc.
See his bibliography: https://en.wikipedia.org/wiki/%C3%89ric_Toussaint
He co-authored World debt figures 2015 with Pierre Gottiniaux, Daniel Munevar and Antonio Sanabria (2015); and with Damien Millet Debt, the IMF, and the World Bank: Sixty Questions, Sixty Answers, Monthly Review Books, New York, 2010. Since the 4th April 2015 he is the scientific coordinator of the Greek Truth Commission on Public Debt.

CADTM

COMMITTEE FOR THE ABOLITION OF ILLEGITIMATE DEBT

35 rue Fabry
4000 - Liège- Belgique

00324 226 62 85
info@cadtm.org

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