About the Campaign for the cancellation of the Third World debt

13 March 2002 by Arnaud Zacharie , Eric Toussaint

The international campaign for the cancellation of the Third World debt is now a central concern of the movement for an alternative globalisation. Backed up by the biggest petition humanity has ever known (24 million signatures gathered between 1998 and 2000), it unites many different movements from all over the world.

The issue of the Third World debt is not a new one, for the origins of the present debt crisis can be traced back to the default of payment decreed by Mexico in 1982. Yet it has taken several years to form such a far-reaching international network. In the Third World, in the period between 1982 and 1990, the campaign for the non-repayment of the external debt gained massive popular support in Latin America, the continent the most affected by the crisis. Numerous Trade Union and peasant organisations in South America tried to promote continental solidarity with the support of Fidel Castro [1]. In 1985 the Peruvian President, Alan Garcia, decided to limit debt repayment to 10% of export revenues. The United States succeeded in isolating and destabilising him. Finally, the Latin-American governments lacked the political will to establish a Latin-American front for non-repayment. In the second half of the 1980s, in Sub-Saharan Africa, more and more voices were raised demanding the cessation of repayment. Thomas Sankara, the young president of Burkina Faso, suggested at a meeting of the Organisation for African Unity in Addis-Abeba that an African front for the non-repayment of the debt should be formed. After his assassination, not one African Head of State was prepared to take up the banner in this fight. In the North, several organisations blazed the trail, such as AITEC [2] in Paris, which broached the subject in 1983, or COCAD/ CADTM [3] in Belgium, which followed the “Ca suffat comme ci” (Enough is enough) campaign launched during the 1989 G7 summit in Paris. Several books written by Susan George [4] played a significant role in strengthening the movement in its initial stages.

The international campaign took off with renewed vigour at the end of the ’Nineties, with the Jubilee 2000 campaign, supported by the Catholic and Protestant Churches. In May 1998, at the Birmingham 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. summit, Jubilee 2000 in Great Britain mobilised 70 000 demonstrators in favour of the cancellation of the debt for poor countries.

In 1999 in Johannesburg, the Jubilee South campaign was officially founded. Based in the Philippines, it embraces organisations from all the continents of the South (Asia, Africa, Latin America), co-ordinated by country and by continent. Other networks have appeared in several countries of the North, notably France with the “Debt and Development” campaign, supported by NGOs, Trade Unions and associations such as ATTAC [5]. In Spain in 1999 the Citizen’s Network for the Abolition of the External Debt (RCADE Red Ciudadana para la Abolicion de la Deuda Externa) was founded. On 12th March 2000, they organised a referendum for the cancellation of the debt in which over a million voters took part. The CADTM network has also developped both in the North (Belgium, France, Switzerland) and in the South (especially in West and Central Africa and the Maghreb). These networks meet at communal seminars (like Amsterdam in April 2000 or Brussels in December 2001), at international conferences (like Bangkok and Geneva in 2000, Genoa in July 2001, Liège in September 2001 or Porto Alegre, particularly at the People’s Tribunal Against the Debt in February 2002), or at demonstrations such as those at the G7 summits or at the IFI General Assemblies. Several networks have managed to organise systematic convergence. Issues are debated across the movement: should cancellation be unconditional or not? Jubilee South, COCAD/CADTM and RCADE think it should; while several of the Jubilee 2000 campaigns in the North (e.g. Great Britain and Germany), and in the South (e.g. Peru) defend the conditionalities. There are other subjects of debate: is it better to accompany and criticise the new strategy of 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.
and the World Bank World Bank
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.

or to oppose it? Should the external public debt be cancelled for the whole of the Third World or only for part (the “poorest” countries)?

Since 1999, the influence of the movements in the South has been gradually increasing. Large numbers have been mobilised in Peru (1999), Ecuador (1999-2001), Brazil (September 2000), South Africa (1999-2000). However the campaign is not limited to networks specifically hinging on the Debt issue. There is permanent synergy, due to the obvious links between the different themes, with networks working on questions related to the financial markets, the IFI or the WTO WTO
World Trade Organisation
The WTO, founded on 1st 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.

. Thus, the cancellation of the Third World debt has become a central demand of the international platform of the movement ATTAC. Organisations like 50 Years is Enough (USA), Bretton Woods Project (GB) or Agir Ici (France) are naturally in favour of cancellation of the debt, since it is at the heart of the IMF’s and the World Bank’s Structural Adjustment Structural Adjustment Economic policies imposed by the IMF in exchange of new loans or the rescheduling of old loans.

Structural Adjustments policies were enforced in the early 1980 to qualify countries for new loans or for debt rescheduling by the IMF and the World Bank. The requested kind of adjustment aims at ensuring that the country can again service its external debt. Structural adjustment usually combines the following elements : devaluation of the national currency (in order to bring down the prices of exported goods and attract strong currencies), rise in interest rates (in order to attract international capital), reduction of public expenditure (’streamlining’ of public services staff, reduction of budgets devoted to education and the health sector, etc.), massive privatisations, reduction of public subsidies to some companies or products, freezing of salaries (to avoid inflation as a consequence of deflation). These SAPs have not only substantially contributed to higher and higher levels of indebtedness in the affected countries ; they have simultaneously led to higher prices (because of a high VAT rate and of the free market prices) and to a dramatic fall in the income of local populations (as a consequence of rising unemployment and of the dismantling of public services, among other factors).

Policies, which they are fighting against. The international peasant movement, Via Campesina (based in Honduras), with 70 million members is also fighting the debt. The World Women’s March has taken up the call. The great international Trade Union confederations CISL and CMT are also supporting it. Finally, networks working on international trade, such as Focus on the Global South, uphold the cancellation of the debt, in so far as it is used by creditors as a means of blackmail to force their debtors to open up their economies to the maximum.


[1Castro, Fidel (1985), No hay otra alternativa: la cancelacion de la deuda, Editora Politica, La Habana, 1985, 61p.

[2AITEC is the International Association of Technicians, Experts and Researchers.

[3COCAD/CADTM is the Committee for the Cancellation of the Third World Debt, international network based in Brussels.

[4George, Susan (1988), A Fate Worse than Debt, Penguin Books, London, 1988. The Debt Boomerang How Third World Harms us all, Pluto Press, London, 1992. Susan George is the Vice-President of ATTAC-France.

[5ATTAC is the Association for the Taxation of Financial Transactions and Aid to Citizens.

Arnaud Zacharie

Secrétaire général du CNCD-11.11.11

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 Greece 2015: there was an alternative. London: Resistance Books / IIRE / CADTM, 2020 , Debt System (Haymarket books, Chicago, 2019), 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, etc.
See his bibliography:
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. He was the scientific coordinator of the Greek Truth Commission on Public Debt from April 2015 to November 2015.

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