Ecuador at the cross-roads, for an integral audit of public indebtedness

Chapter 6: Conclusions and recommendations

16 August 2007 by Cécile Lamarque

 Chapter 6: Conclusions and recommendations

A. Identifying Ecuador’s illegitimate debt as a prelude to political sovereignty
B. The right of governments to determine the illegitimacy of a debt
C. 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.

and 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.
are legally responsible!
D. Actions by creditors of the North
E. Actions by the United Nations
F. Alternatives defended by social movements and some Latin-American governments against the debt

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This analysis set out, on the one hand, to trace the political, economic and financial history of Ecuador that led to the present situation of indebtedness, and on the other, to show up the illegitimate nature of the debt. In Ecuador, as in most indebted third-world countries, debt is one of the main instruments of oppression and political, economic and social domination - an instrument of power that helps ensure and perpetuate the acquisition of natural resources and the transfer of wealth from the peoples of the South to their rich creditors, with the elites of the South skimming off their commissions in the process. Ecuador is one of many countries that has repaid several times over debts that were not contracted in the interests of the nation or the people. The loans contracted by Ecuador have in fact profited the creditors in the North, multinational corporations, financial speculators and the local ruling classes.

The different stages of growing indebtedness show that debts Ecuador is supposed to pay are illegitimate. The following are illegitimate: debts contracted by military dictatorships during the 1970s and which have never ceased to grow under later governments; debts to finance projects which did not benefit the population or which turned out to be destructive for people or the environment; debts contracted through corruption; debts contracted at usurers’ interest rates Interest rates When A lends money to B, B repays the amount lent by A (the capital) as well as a supplementary sum known as interest, so that A has an interest in agreeing to this financial operation. The interest is determined by the interest rate, which may be high or low. To take a very simple example: if A borrows 100 million dollars for 10 years at a fixed interest rate of 5%, the first year he will repay a tenth of the capital initially borrowed (10 million dollars) plus 5% of the capital owed, i.e. 5 million dollars, that is a total of 15 million dollars. In the second year, he will again repay 10% of the capital borrowed, but the 5% now only applies to the remaining 90 million dollars still due, i.e. 4.5 million dollars, or a total of 14.5 million dollars. And so on, until the tenth year when he will repay the last 10 million dollars, plus 5% of that remaining 10 million dollars, i.e. 0.5 million dollars, giving a total of 10.5 million dollars. Over 10 years, the total amount repaid will come to 127.5 million dollars. The repayment of the capital is not usually made in equal instalments. In the initial years, the repayment concerns mainly the interest, and the proportion of capital repaid increases over the years. In this case, if repayments are stopped, the capital still due is higher…

The nominal interest rate is the rate at which the loan is contracted. The real interest rate is the nominal rate reduced by the rate of inflation.
; private debts converted into public debts. Debts are illegitimate when they are bound by conditionalities imposed by the IMF and the World Bank, flying in the face of Ecuador’s sovereignty and its right to self-determination, in violation of the people’s right to define their own policies for development, whether in the realms of trade, taxation, the budget or energy, and their own labour laws; conditionalities which force them to make drastic reductions in social spending and to privatise strategic sectors, and so on.

All these are illegitimate debts that the Ecuadorian State must refuse to pay.

We have seen what a burden the human cost of the debt, and of the neo-liberal system in general, has become for a growing number of Ecuadorians who have seen their living conditions steadily deteriorate under the combined effects of debt repayments and the neo-liberal policies which work against the fulfilment of their basic needs.


It is no good expecting capitalist logic to fulfil the basic needs of the world’s populations. Neither can we hope to pursue development without cancelling the debt and abandoning neo-liberal policies. The debt problem will be solved when the governments of the South decide to end it themselves, by economic, political and social measures to liberate human development. In the present context there is no way that the creditors will decide to cancel the debt in totality and unconditionally! The repudiation of illegitimate debts is a necessary, though insufficient, measure. How can repudiation be achieved? An audit could very well justify a unilateral sovereign decision to refuse to pay. The first step is to end the financial haemorrhage caused by debt repayment. Then alternative sources of finance will have to be found, for socially just and environmentally sustainable forms of human development. There has to be a break away from the logic that leads to massive plunder of financial and natural resources and from dependence on foreign capital and the conditional loans of the IFI. Finally, this unjust neo-liberal system should be replaced by a just and fair model of development, meeting the aspirations of the people.

Ecuador is giving encouraging signs, suggesting that it is beginning to follow this path. For as well as being choked by debt like so many others, Ecuador seems to be one of the rare countries endowed with a government that intends to put an end to the debt haemorrhage in the interests of its population.

Rafael Correa’s government is following up the non-exhaustive audit carried out by CEIDEX, wishing to take the research a lot further and use it to make strong decisions that will strike at the root of the problem. The CEIDEX audit has already clearly demonstrated that the debts and loan agreements are fraudulent, unlawful and illegitimate. Because of the social, economic and environmental consequences of the debt, it must be totally repudiated.

Furthermore, the role of creditors has to be revised. Because of the pillage of resources and the destruction of the environment, facilitated by the policies imposed by the IFI, creditors have a responsibility in preventing human development in Ecuador. This means that they have a considerable debt towards Ecuador’s people. The question of reparations needs to be discussed.

From 25 to 28 April 2007, Ecuador’s illegitimate debt was at the heart of the debates at the International Seminar on the illegitimate debt held in Quito. Participants agreed that the debt was illegitimate and were in favour of repudiation.

In 1986, the United Nations’ Declaration on the Right to Development reinforced the State’s obligations in development issues, laying down that “States have the right and the duty to formulate appropriate national development policies that aim at the constant improvement of the well-being of the entire population and of all individuals on the basis of their active, free and meaningful participation in development and in the fair distribution of the benefits resulting from it” [1].
Consequently, Ecuador has the right – and even the duty – not to apply the 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).

programmes drawn up by the World Bank and the IMF, which amount to a violation of peoples’ right to development, and more generally, a violation of economic and social rights.

Rafael Correa has assured that « we believe in the socialism of the 21st Century, which seeks social justice, national sovereignty, the defence of natural resources and regional integration based on the logic of coordination, cooperation and complementarity. ” [2]
The process of profound transformation towards this “socialism of the 21st Century” that Rafael Correa aspires to is only in its early stages. It is difficult to predict how it will go – much will depend on the popular support enjoyed by the president and his government, particularly when faced with relentless attacks from the national oligarchy and the U.S. government. Whatever may happen, Ecuador provides an example of a government that takes sovereign decisions on questions of debt, especially the decision to have an audit to reveal the illegitimate part of the debt, which is the first step towards total cancellation. Let us hope that other governments of the South will follow in its tracks and that audits will be ordered in other countries to reveal at last the truth about the debt!


Defenders of neo-liberal globalisation would have it that developing countries must be held to repay their external debt, whatever its origin and whatever the conditions of repayment. On this point, the UN Commission for International Law has rightly declared, “A state can not be expected to close its schools, universities, and law courts and to do away with public services, plunging the community into chaos and anarchy simply to be able to use the money to repay its national or foreign creditors. There are limits to what can reasonably be expected from a state as there are from an individual” [3] .
According to international law, no government can be obliged to pay a debt deemed illicit. How such illicitness may be determined is for the governments to decide, using their right to conduct an audit of the public debt. This implies that even before repaying the debt, the government and citizens are entitled to query its origins, the borrowing conditions, the amount of the loan contracted, the legal conditions of the debt, its illegitimacy and the social and environmental consequences of repayment and of the policies imposed by the creditors. Several governments have already made use of this procedure [4].

Similarly, when a government refuses to conduct an audit, the population should demand that their government be answerable. The citizens’ audit is a basic right figuring in the principal texts of international law. The 1948 Universal Declaration of Human Rights lays down that, “ Everyone has the right to take part in the government of his country, directly or through freely chosen representatives” [5].
As for the right to information, Article 19 of the 1966 International Covenant on Civil and Political Rights asserts,
“Everyone shall have the right to freedom of expression; this right shall include freedom to seek, receive and impart information and ideas of all kinds, regardless of frontiers, either orally, in writing or in print, in the form of art, or through any other media of his choice” [6].

A country’s population therefore has every right to conduct an audit on the debt contracted by its State. Ecuador has thus begun an audit process, to eventually get its debt cancelled. The new audit commission will concentrate on identifying which part of the public debt, internal or external, can qualify for repudiation or cancellation; and will determine the degree of responsibility of the government and the creditors, whether private (banks) or public (the IMF and the World Bank), in getting the country into debt.

Beyond determining the illegitimate nature of the debt, the different parties responsible must be held to account for their deeds, and the issues of reparation and restitution of ill-gotten gains addressed. Conducting an audit of the debt must go hand in hand with a firm stand against the impunity of those responsible for under-development and against the real criminals, i.e. the IMF and the World Bank, whose particularly draconian policies induce human rights violations. This last point was made emphatically by the UN Commission for Human Rights itself [7]


The structural adjustment plans cynically set up under pressure of the debt by the IMF and the World Bank to ensure repayment of a debt that is unjust, illegitimate and immoral were the main cause of subordination and a halt in the socio-economic, political and cultural development of Ecuador. The IFI imposed their drastic conditions with complete lack of regard for the country’s sovereignty and the aspirations of the people. In Ecuador as elsewhere, the IFI carry a heavy burden of responsibility for indebtedness and the tragic effects of their policies on the population.

There is incontrovertible evidence that through their policies, inequalities and corruption have got worse, health and education systems downgraded, food sovereignty lost, the environment damaged and the State dispossessed of its companies. Yet these institutions continue to justify their role, claiming that the measures they impose will enhance growth and free trade, which to them means reducing poverty. Several decades of experience have shown that such a model of development is totally unworkable, and on the contrary, generates poverty. The obstinacy of the IMF and the World Bank in maintaining these arguments against all evidence is better understood when we know that their goal is to serve the geo-strategic interests of the USA, its multinational corporations and its allies, for whom the developing countries represent a market where raw materials can be had at unbeatable prices and a bottomless reservoir of cheap human labour. This can be seen in Ecuador and elsewhere.
As Fantu Cheru of the UN Human Rights Commission so aptly said of the structural adjustment programmes, “They [are] the expression of a political project, a deliberate strategy of social transformation on a global scale, whose aim is to make the whole planet a playing field in which trans-national corporations will be able to operate with total impunity. In other words, the structural adjustment programmes act as a “transmission belt” to facilitate a globalization process that is based on liberalization, deregulation and diminishment of the State’s role in national development” [8]. In short, they are part of the neo-liberal counter-revolution - a far cry from their claimed objective of eradicating poverty.

The present study has explained how the largely negative impact of debt repayments and neo-liberal policies renders payment of Ecuador’s debt illegitimate, unjust and immoral. The policies imposed by the IMF and the World Bank have clearly resulted in grave violations of human rights and of social, economic and cultural rights. These policies constitute flagrant interference in the political affairs of a State, thus breaching Article 2 Paragraph 1 of the 1945 UN Charter, which asserts the principle of the sovereign equality of States and their right to choose freely their economic, social and political regimes. Violating peoples’ right to development, as asserted in the International Covenant on Economic, Social and Cultural Rights adopted by the UN General Assembly in 1966 at the same time as the one relating to civil and political rights. These agreements, which became law in 1976, lay down in the first paragraph of the first article: “All peoples have the right of self-determination. By virtue of that right they freely determine their political status and freely pursue their economic, social and cultural development”.

The penal responsibility of these institutions is clearly implicated. This only leaves one possible solution: given how undemocratic the IMF and the World Bank are, given their absence of legitimacy, given their patent inability to examine critically the concept of development that they promote, given their direct responsibility for under-development, there is no hope of reforming them satisfactorily. It is urgent that these institutions should be abolished and replaced with democratic, transparent institutions, founded on the guarantee of basic human rights and respect for the sovereignty of the countries of the South. There must be reparation and restitution. To this aim, legal proceedings must be instituted against the World Bank which, unlike the IMF, does not enjoy judicial immunity [9].
The Bank’s lack of immunity cannot be explained in legal terms but it nevertheless opens up an interesting loop-hole worth exploiting by the hundred or so countries where the Bank is represented. Despite the fact that such a thing has never been attempted, it would be perfectly logical, in view of the multiple human rights violations resulting from the World Bank’s actions, its support of numerous dictatorships, its systematic destabilisation of progressive regimes, and its enforcement of structural adjustment policies that have caused unprecedented social and environmental damage to the peoples of the South.

Rafael Correa has not ruled out the idea of such an action against the Bank for the damage it has done in Ecuador, which would certainly open the way forward for other political leaders who wish to break away from this system of domination and acquit the social debt of their peoples.


At the end of 2006, the Norwegian government opened up a breach into illegitimate debt that should be fully exploited. The resolution cancelling the debt of the Least Developed Countries Least Developed Countries
A notion defined by the UN on the following criteria: low per capita income, poor human resources and little diversification in the economy. The list includes 49 countries at present, the most recent addition being Senegal in July 2000. 30 years ago there were only 25 LDC.
(LCD) [10] adopted by the Belgian Senate on 29 March 2007 with a majority of 34 votes to 29 represents a major advance in several respects.

The resolution calls for the Belgian government to conclude an agreement with all indebted countries concerned in order to completely cancel their debt. In that respect, the Senate’s proposal does not go beyond what has already been decided by other governments. But fortunately the Senate blazes trails in several very significant areas:

- it proposes to decide on a moratorium on the bilateral debt with no 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. arrears [11] in favour of the Least Developed Countries (point 6);

- it states that a country’s bilateral or multilateral debt must be assessed at its true value. The Senate considers that the actual value, and not the nominal value, must be taken into account.

Now the actual value very often represents next to nothing, compared to the nominal value. For example, it represented 4% of the nominal value in the case of debts contracted by the Mobutu government on behalf of the former Zaire, now the Democratic Republic of Congo.

- while it applies in principle to all developing countries (see introduction to point 10 in the Senate’s text), point 10 relates to debt auditing and odious debts, two of the recurring demands formulated by the CADTM and other movements for cancellation of the debt. In this respect the Senate asks the Belgian government to set up an audit on the odious nature of Belgian debt-claims on developing countries. In the same paragraph it considers that at the very least an 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.
is one contracted by a non-democratic government, that the borrowed amount did not benefit the local population, and that the loan was granted while the creditor was aware of the two above-mentioned facts (point 10). The Senate thus uses two of the instruments that the CADTM among others has put forward to establish a legal basis on which the Third World debt can be cancelled: auditing and the notion of odious debt. Consequently the CADTM can provide the Belgian authorities with various tools, including an Auditing Manual it developed in 2006 with a number of organizations in countries of the South and with CETIM (Switzerland), and its recently published « Pour un audit de la dette congolaise » (For an Audit of the Congolese Debt) [12].
The Senate asks the government to cancel the odious part of Belgian debt claims that the auditing process will reveal (point 11).

Government actions in favour of debt cancellation, acknowledgement of its illegitimate character and the effective application of human rights and the right to development depend on political will, so far noticeably absent. Changes in this direction can only come about through a widespread awareness, by citizens of the North, of the harm done by their countries’ policies concerning the debt and its economic, commercial and political relationships. Such awareness should then lead to powerful mobilisation of citizens in the North, to put pressure on their governments.


Since the 1980s, the UN has made several statements concerning the negative effects of the debt mechanism and the policies dictated by the international financial institutions. By adopting several resolutions it has attempted to bring sustainable solutions to the difficult issue of the debt faced by developing countries [13]. The UN General Assembly has several times agreed that the debt is “an obstacle to the economic growth and development of the developing countries [14]”. Indeed, the Assembly noted that: « repayment of the debt demands sacrifices of the populations of the developing countries which have had the effect of degrading and deteriorating the economic and social situation of these countries” [15]. The UN Commission on Human Rights wrote, “ structural adjustment policies have serious implications for the ability of the developing countries to abide by the Declaration on the Right to Development and to formulate national development policies that aim to improve the economic, social and cultural rights of their citizens” and also stresses the importance of continuing to implement “ immediate, effective and durable actions for alleviating the burdens of debt and debt service Debt service The sum of the interests and the amortization of the capital borrowed. of the developing countries with debt problems [16]”.

But on the whole, the way the question of the debt is treated and the measures recommended by the international financial organisations within the UN are generally very disappointing. While firmly criticising the IMF and the World Bank, the UN has never made fundamental decisions to put a stop to their actions, which violate human rights as they are defined in the 1948 Universal Declaration of Human Rights and in various international agreements and treaties, such as the 1966 International Covenant on Economic, Social and Cultural Rights. It should be remembered that the IMF and the World Bank are officially independent specialist agencies of the United Nations and as such should act in accordance with the principles of the Charter of the United Nations, including the respect of human rights”. The UN has therefore its part of the responsibility. The UN should take measures to put a stop to the policy decisions which contravene its Charter, and reappraise the legitimacy of the actions of these specialist agencies. It should call for resolutions which demand that the debt be cancelled, and place the nullity of debts, based on the doctrine of odious debt, at the centre of its demands. It should support debt-auditing initiatives, sanction the IMF and the World Bank for their grave violations of international law and truly commit itself to creating the conditions for just and sustainable development, in respect of the self-determination and the sovereignty of the countries of the South and their populations.


The inhabitants of Latin America are undoubtedly among those most aware of the malfeasance of neo-liberal policies, since they were among the first to vigorously oppose them, with calls, in most countries, against interference by the international financial institutions, against United States imperialism, against the Free Trade Agreement, and so on.
In so far as the debt is concerned, several “civil society” movements (especially the Jubilee South network which exists in most Latin-American countries) have been demanding tirelessly for several years that the debt be cancelled, that odious and illegitimate debts be repudiated, and that audits be carried out on the debt. In fact, Latin America really stands out by the force with which it is fighting to be liberated from the debt, which unfortunately is not so strong on the other continents. Several audits have already been carried out either by citizens or governments [17].

The social movements have also launched an original idea: people’s debt tribunals [18].

Powerful protests and mass mobilisation have transformed the political landscape of the continent. Elections in recent years have seen left-wing governments of various tendencies come to power, thus modifying the 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. The election of Hugo Chávez in 1998 and his recent re-election, the election of Evo Morales in Bolivia, Rafael Correa in Ecuador, Lula in Brazil, Tabare Vásquez in Uruguay, Nestor Kirchner in Argentina and Daniel Ortega in Nicaragua are all examples. Some of these governments, such as Venezuela, Bolivia and Ecuador, have expressed a rejection of the policies advocated by the World Bank and the IMF and are actually attempting to implement policies which go beyond the dominant system.

The creation of the Bank of the South, scheduled for the end of 2007 and in which seven Latin-American countries are so far taking part, is a major project of this counter-tendency, providing an alternative to the World Bank and the IMF.

The region has moved to the left, and sovereignty and self-determination have become central concerns, especially with the natural resources and other key sectors of the economy moving back under public control (in Venezuela, Bolivia, Ecuador) with policies of redistribution and putting the State back into its role of social regulator. In Bolivia the natural resources have been renationalised; in Venezuela, public oil companies like PDVSA (Petroleum of Venezuela Ltd.) in 2002-2003, have taken control and the CANTV and the electricity sector have been renationalised; Ecuador has more recently cancelled the oil contract of a U.S. company, Occidental Petroleum (Oxy). One could find other examples in the region.

Finally, back to Ecuador: in active support of the audit process, and with a view to determining quickly which part of the debt is illegitimate, the creation of an audit commission for Belgian loans to Ecuador is under way in Belgium, at the joint initiative of the CADTM and other organisations working on issues of indebtedness and the international financial institutions, such as Eurodad and CNCD-11.11.11 (the National Centre for Cooperation in Development, the French-speaking platform for Belgian development NGOs and 11.11.11, its Flemish-speaking counterpart). The Norwegian campaign for debt cancellation has obtained the remarkable results already reported. In Spain, the campaign Quien debe a quien? (Who owes Who?) and the Observatory of the Debt in Globalisation (ODG) have also begun to undertake significant actions concerning debts unjustly claimed from Ecuador by their country’s government. Debt campaigns all over the world will be starting similar procedures to audit their respective country’s loans to Ecuador in order to check their legitimacy.
There also need to be audit commissions looking into the debts claimed by Northern governments from other developing countries – this is a matter of urgency.
Ecuador, like all the other developing countries, is standing at a cross-roads which could be a parting of the ways.

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This collective work was carried out in July 2007 at the request of AFRODAD ( by a team at the CADTM composed of Benoît Bouchat, Virginie de Romanet, Stéphanie Jacquemont, Cécile Lamarque and Eric Toussaint.

It was revised by Myriam Bourgy, Damien Millet and Renaud Vivien.

The English translation was done by Elizabeth Anne, Vicki Briault, Judith Harris and Christine Pagnoulle.


[1Alinea 3 - article 2

[2Eduardo Tamayo, “Consulta popular se perfila como salida a la crisis”, 23 March 2007, sur

[3Annual report of the International Law Commission, vol.II, 1980, p.164-167, cited by Hugo Ruiz Diaz.

[4For this see Hugo Ruiz Diaz, Eric Toussaint, Donde esta lo que prestaron? Deuda externa, deudas ilegitimas y auditoria, Centro de Derechos economicos y sociales, Quito, 2004.

[5Article 21

[7UN-HRC, Effects of structural adjustment policies and the external debt on the full enjoyment of all human rights, particularly economic, social and cultural rights. Also, Resolution of the Human Rights Commission 2001/27, UN-HRC, Effects of structural adjustment policies on the full enjoyment of human rights, Independent expert’s report by Mr. Fantu Cheru, presented in line with decisions 1998/102 and 1997/103 of the Commission, E/CN.4/1999/50 24 February 1999, UN-HRC, Joint report by the special reporter Ronaldo Figueredo and the independent expert, Effects of structural adjustment policies on the full enjoyment of human rights Fantu Cheru, E/CN.4/2000/51, 14 January 2000.

[8UN-CHR, Effects of structural adjustment policies on the full enjoyment of human rights, Report by the independent Expert Mr. Fantu Cheru, E/CN.4/1999/50, paragraph 31.

[9Since the World Bank issues bonds on the financial markets and borrows from banks, it was obliged to guarantee buyers the right to sue the Bank in case of default -. Section 3 of article VII: “ Actions may be brought against the Bank only in a court of competent jurisdiction in the territories of a member state in which the Bank has an office, has appointed an agent for the purpose of accepting service or notice of process, or has issued or guaranteed securities” in Eric Toussaint, The World Bank, A never-ending, coup d’etat, 2006, chapter 23.

[10According to the list established by the IFI and the OECD, there are currently 50 LCDs.

[11It should be recalled that following the tsunami of December 2004 off the coast of Indonesia, the Paris Club had proposed a one-year moratorium with possible accounting of interest arrears, which the CADTM denounced in March 2005, since this meant increasing the debt of the countries concerned. See Damien Millet and Eric Toussaint, Tsunami Aid or Debt Cancellation !, VAK, Mumbai, 2005.

[12Let’s launch an inquiry into the debt ! A Manual on How to Organise Audits on Third World Debts; CADTM-CETIM, Liege-Geneva, 2006, 96p. on line: A qui profitent toutes les richesses du peuple congolais. Pour un audit de la dette congolaise, CADTM, 2006, 56p.

[13For more information on the actions of the United Nations, see Hugo Ruiz Diaz, Le traitement de la dette par l’ONU, 29 September 2004, available on the CADTM web-site,

[14Resolut.49/94, 51/164, 55/14, 56/184, 57/240. See Hugo Ruiz Diaz, L’audit citoyen de la dette : un instrument de démocratisation des relations économiques et de contrôle démocratique des actes des gouvernements, accessible sur le site du CADTM. See also Economic, social and cultural rights, Globalisation and its effects on the full enjoyment of human rights, Final report presented by J. Oloka-Onyango and Deepika Udagama, E/CN.4/ Sub.2/2003/14, 25 June 2003
15 Resol. 54/202 of 22 December 1999. See Hugo Ruiz Diaz, L’audit citoyen de la dette : un instrument de démocratisation des relations économiques et de contrôle démocratique des actes des gouvernements (ibid)


[16Effects of structural adjustment policies and foreign debt on the full enjoyment of all human rights, particularly economic, social and cultural rights, Resolution 2000/82 of the Commission on Human Rights.

[17Lets launch an inquiry into the debt ! A Manual on How to Organise Audits on Third World Debts; CETIM/CADTM; Geneva, Liege; chapter 2 pages 17 ff


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