Committee for the Abolition of Illegitimate Debt

In spite of mounting difficulties for getting visas, CADTM’s global meeting took place on 1^st and 2^nd December at Liège (Belgium) and was extremely representative and successful. Around 50 delegates and observers from 21 countries participated in that meeting, which was very much integral to CADTM International network’s activities. People came from Asia (India, Pakistan, Japan), West Asia (Syria), the Maghreb countries (Tunisia, Morocco, Mauritania), Latin America and the Caribbean (Argentina, Colombia, Uruguay, Ecuador, Haiti), Sub-Saharan Africa (Benin, Mali, Niger, Democratic Republic of Congo, Togo and South Africa), and Europe ( Switzerland, France, Belgium). [1]
The programme was conducted in good working conditions: an excellent room equipped with translation booths, a team of voluntary interpreters who brilliantly translated into three languages, and provision of ample documentation to participants in advance. This helped to establish a pleasant, participatory and creative atmosphere.
The assembly has ratified the membership of 4 new members. They are: ATTAC Argentina, ATTAC Japan, Togo ATTAC and the RCP of Mauritania.

Themes of all workshops, continent-wise.
The themes identified the relationship between debt- the cornerstone of our action- and various basic concepts such as gender, climate change, food sovereignty, migration and alternatives. This methodology once more allowed covering the range of issues and the extent of the damage caused by debt. This overview was all the more important at a time when the governments of indebted countries have unfortunately not taken the historic opportunity to break the vicious cycle of debt, taking advantage of the rise in the prices of raw material until the first half of 2008 and consequently the growth of foreign exchange reserves. The major crisis that shook entire humanity has reversed the situation and clearly a new debt crisis has emerged.
An evening and a morning were devoted to the meeting of delegates from each continent in order to gather as much information as possible about each other’s activities and to formulate a strategy for each region as precisely as possible. A strategy which, in turn, should lead to a short-term reinforcement of the international network as a whole. A questionnaire guided the various reflections of the participants: What are the strengths and weaknesses in the continent? How to improve communication within the network? How to strengthen the publication of books in the South? What are the priorities for the continent? What is the scope of the audit? How to build relations with the governments? How to work with other networks and campaigns? What role to play in the process of Social Forums?
Such discussions proved to be very concrete. As all the written reports have been assembled, you can now view the synergies at work among different continents. Example: regarding the progress made in the field of debt-audits, a priority for CADTM members in Europe will be to maximise the audits in the South while conducting surveys in the North, in order to provide important data, including elements of contracts which establish the illegitimacy of a significant portion of debts.

The political Charter

The CADTM International network has a new political Charter. The Preamble of the Charter explains that requirement. “In 1989 the Bastille call was launched in Paris: it invited all popular forces around the world to unite in order to achieve an immediate and unconditional cancellation of the debts incurred by so-called ‘developing’ (...) countries. The CADTM was established in response to this call and to fight the deterioration in living conditions for a large majority of people. Today CADTM International is a network consisting of some thirty organisations in over 25 countries on four continents. Its main objective, based on the debt issue, is to set up actions and draft radical alternatives aiming at the development of a world based on peoples’ sovereignty, equality, social justice, and peace.
“Since CADTM was established, the international context has evolved.(...) On the global level two main contradictory trends have developed. On one hand the neoliberal capitalist offensive, led mainly by international institutions such as G7, 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 , WB 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.

, and WTO WTO
World Trade Organisation The WTO, founded on 1^st 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.

, in the interests of transnational corporations and international financial capital, has thrived and deepened. On the other hand, a counter-offensive has emerged since the end of the 1990s: powerful popular mobilisations against the neoliberal offensive, a stronger international citizens’ movement for another possible world, election of presidents who break away from neoliberal policies, initiatives in terms of debt auditing and suspension of public external debt repayment, States retrieving control on strategic sectors and natural resources, failure of neoliberal projects such as FTAA, resistance to imperialism in Iraq, Palestine, Afghanistan,...

Extensive discussions were required to fine-tune a version that had been amended and approved by the delegates present. However, it is not yet final. The delegates, after returning will discuss with their organisations in order to confirm the latest amendments. These should reach the international secretariat in early January, in order to prepare the text to be submitted for final approval at a meeting of CADTM International to be held at the World Social Forum in Belem (Brazil) in late January 2009.
Here is a preview of the Charter - Section 2 - while knowing that it can still be amended, this is representative of what could be the final text: CADTM’s main objective is the immediate and unconditional cancellation of the third-world debt and the suppression of 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).

IMF : http://www.worldbank.org/ policies. In order to reach this objective CADTM International supports the following actions:
Setting up debt auditing with citizens’ participation in view of denouncing all odious and illegitimate debts.
Terminating agreements with the IMF and the World Bank.
Setting up a united front of countries that will not repay their debts.
Recognition of the 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. doctrine in international law.
Refusing any conditionality imposed by lenders.
In case of failing private banks being nationalised, retrieving the cost of the transaction on the patrimony of big shareholders and of directors.
Guarantee for Rights to mobilise.
Major countries of the North paying compensations to populations in the South for the historical, social and environmental debts they have contracted.
Retrocession to DCs’ citizens of the goods that were stolen by corrupt leaders in the South with bankers and governments in the North aiding and abetting.
Accountability in court of international financial institutions.
Replacing the WB, the IMF and the WTO by democratic institutions that give priority to fundamental human needs when it comes to financing development, providing credit, or developing international trade.
Withdrawal of all agreements (economic, political, military, etc.), which hypothecate the sovereignty of people and sustain the mechanisms of dependence. "

A Charter of operations

The growing number of the network’s member organisations also requires focus on the organisation’s general principles. To some, the CADTM International network might seem to be a merry band of friends. It is this too, but is still a responsible organisation. This means that beyond the fundamental political principles, it is important to effectively work together.

Therefore we have inserted a text that gives an overview of the Charter’s additional organisational policy. In this respect also, the discussions took longer than expected.
The highlights of this text are the multiple references to the horizontal network: “The network’s Global Assembly is the body which determines the main directions of the network”, the fact that the international secretariat currently provided by the CADTM Belgium, could be provided by another member organisation to ensure a rotation, “each member organisation is autonomous and has the flexibility to determine its agenda, as long as it does not contradict the Political Charter.” “The International network focuses on strengthening regional labour ...”
In the final discussion on the Charters, we wanted to merge the two texts but for an intervention which helped us clearly to see the advantages of keeping the two texts separate: the Political Charter should circulate outside the organisation and it demands a political mission that should not be anyhow diminished by some limited or ephemeral items of the text on the “functioning” (for example, the number of regional workshops - six currently - may vary from one global assembly to the other).
The obligations and responsibilities of member organisations have also been defined: agreement with the Political Charter, democracy and transparency in decision-making policies, gender equality (parity goal in the organisation and society), sharing experiences with the entire network, and more.
A very detailed agenda
It is always useful to utilise such a meeting to decide the next meeting place, where members will again meet and work together, as well as plan for specific regional workshops.
As soon as the Network’s global meeting was over, participants immediately began to actively participate in the 7^th International Seminar on Law and Debt, on the effectiveness of human rights, then a few days later, in a residential training programme of the International Observatory of debt (OID).