Committee for the Abolition of Illegitimate Debt

The 16^th and 17^th of September of 2010, took place in Buenos Aires, Argentina, the Seminar “Sovereign and Social Alternatives Proposed Against Debt” organized by the CADTM AYNA Network [1]. With the presence of more than 80 participants, the discussion allowed to analyze the recent trends in the evolution of public debt at the regional level and highlighted the importance of undertaking sovereign measures as a key tool in the fight against the system of the debt.

The activities began with a presentation by Daniel Munevar (CADTM Belgium) on the dynamics of public debt in Latin America during the last decade. It was shown how the issuance of internal public debt has become the main financing tool for governments in the region. This development brought as a consequence an important change in the composition of public debt in most of the countries of the region, as currently external debt represents only 25% of the total public debt of Latin America. The transformation of the structure of public liabilities Liabilities The part of the balance-sheet that comprises the resources available to a company (equity provided by the partners, provisions for risks and charges, debts). is important in understanding the relative stability of the region at the onslaught of the financial crisis.

Later on, William Gaviria (Colombia CADTM) and Paulino Nuñez (CADTM Venezuela) continued the discussion on the regional overview of debt, making special emphasis on the Andean region. While Gaviria discussed the negative impact that debt service Debt service The sum of the interests and the amortization of the capital borrowed. has had on the provision of public services and the strengthening the neoliberal and militaristic model in Colombia, Nunez spoke on the need for the Government of Venezuela to undertake stronger measures against debt and double taxation treaties. Both speakers stressed the importance of a strong rejection of the U.S. military presence in Colombia, considering it a threat to regional peace.

In the afternoon, the presentations continued with a panel on the CIADI and Bilateral Investment Treaties, by Aristides Corti (Arg) and Luciana Ghiotto (Arg). The speakers mentioned the problems involved with establishing courts of arbitration in terms of loss of national sovereignty. In these type of courts the states are almost invariably at a disadvantage compared to private sector counterparts. They expressed their skepticism about the establishment of a regional arbitration court related to the regional New Financial Architecture (NAF). At the same time it was emphasized the importance of taking sovereign actions to address the operations of international investors which are affecting the welfare of local people and environments. On a sobering note, Corti recalled that even if a BIT is terminated there remains a 10 year period in which the State remains subject to the conditions of the initial contract.

The panels of the first day concluded with a discussion of the NAF, which was attended by Carlos Marichal [2] (Mex) and Julio Gambina (Arg). Marichal discussed the importance of the concept of economic democracy. In his view, the lack of knowledge about general economics from the part of citizens weakens their participation in policy making and thus ends up limiting their ability to exercise their democratic rights. His proposal is to try to get issues related to regional integration and debt closer to ordinary citizens through educational work, in order to strengthen political support for such initiatives. For its part Gambina didnt hesitate to point out that the main obstacle faced by the Bank of the South and the Sucre is the lack of political will by certain governments in the region, coupled with fierce opposition from the technocrats in charge of such projects. This deadlock can only be overcome through popular mobilization in favor of these initiatives.

The second day of the seminar started with the presentation of the results of the Parliamentary Commission of Brazil’s Debt by one of its participants, Rodrigo Avila (Citizen Debt Audit, Brazil). The intervention was focused on explaining the mechanisms by which it was possible to establish the necessary political support to carry out the audit. Avila indicates that despite the fact that audit stage has already concluded, this is only the first step in the process to restore citizen control of the public finances of the country. The next step in the fight is to initiate prosecution procedures against those individuals who committed illegalities in the process of indebtment of Brazil. It was stressed that international support for the work of the Parliamentary Commission must be maintained over the following months [3].

Then took place a discussion of the audit process of Itaipu - Yacerita in Paraguay and the support that CADTM is giving to this initiative. The focus of the discussion was to analyze the mechanisms through which it can be highlighted in Argentina the importance to carry out an audit process in the Paraguay - Argentina’s bi-national of Yacerita. As demonstrated in the case of Brazil, national and international pressure was a key element in opening the door for the Comptroller of Paraguay to began the work of revising the documents of the Itaipu Binational. This can be regarded as the first step to an eventual process of comprehensive audit of the debt. CADTM is committed to provide regular information on the subject, in a way that social movements in Argentina can use it to create social and political pressure in this regard.

In the afternoon the discussion was focused on the recent dynamics of public debt in Argentina and how to promote the organization of a new debt audit commission in the country, following the steps of the Olmos Report. The panels were attended by Mario Cafiero, Isaac Rudnick, Claudio Katz, Eduardo Lucita, Alejandro Olmos and Congressman Eduardo Macaluso. The first group of presentations centered on describing the dynamics of public debt in Argentina during the last decade and the impact of default on the country’s economic model. This debate comes at a time in which the possibility of using foreign reserves for payment of external public debt of Argentina is open. The speakers agreed that although the repayment of the debt reduces the country’s external vulnerability, the opportunity cost associated with the use of these resources is unacceptable. This is because the discussion takes place in a context characterized by social protests and the history of illegitimacy and illegality of the debt of Argentina which was clearly established by the “Alejandro Olmos sentence” (July 2000).

The second group of speakers, composed by Alejandro Olmos Gaona junior and Congressman Eduardo Macaluso, addressed the legal and policy aspects of debt in Argentina. Olmos stressed that the illegality of the debt in Argentina has been clearly established. Based on his experience in the debt audit of Ecuador, he mentioned that the support and lobbying by civil society is essential for the audit process to reach its ultimate consequences. That is cancellation of illegal debt contracts and trials for those responsible of the irregularities. For his part, MP Macaluso showed willingness to take the case to the Argentine Congress and asked for support of different political groups and social movements present in the meeting to raise again the issue of debt within the national political agenda.

The activities of the Network Seminar II CADTM AYNA concluded with a panel attended by Eric Toussaint (CADTM Belgium) and Atilio Boron [4] (Arg). The President of CADTM Belgium, shared with the audience his recent experience attending the UN General Assembly on September 15^th [5]. After a brief summary of the intervention, Toussaint spoke about the importance of audits and sovereign taking action to address the system of oppression of debt. Given the prominent role the debate on debt and austerity now plays on the agenda of the Red CADTM Europe, the speaker asserted that the adoption of measures such as the Audit of the Debt in Ecuador represent a model for the world, which puts the entire region into the forefront of social struggles against the debt. For its part, Atilio Boron talked about the current social and political situation in Latin America, and the importance of the alternative political processes that are taking place at a regional level to implement progressive policies that lead to the elimination of external debt.

Thus, the event ended on a positive note as it turned into a meeting point at the national and regional level to promote and strengthen the work of social movements for the elimination of public debt in Latin America. In order to continue this type of synergy between social movements, the Third Seminar of the Red CADTM AYNA was summoned to the month of September 2011.