Committee for the Abolition of Illegitimate Debt

The Assembly of Movements working on the Debt issue took place on February 1 within the context of the alliances day at the WSF 2009 held in Belem. It involved the participation of several organisations and networks, with strong presence of member organisations of Jubilee South and the CADTM network. The conclusions set forth herein reflect the position of various anti-debt networks and movements which had already started an important convergence process, as shown by the WSF declaration of Nairobi in January 2007, launching the International South North Campaign on Illegitimate Debt, the publication of a common newsletter on illegitimate debt, the annual organisation of a Week of Global Action against Debt and International Financial Institutions, the recent study and strategy meeting held in Quito in September 2008, and the coordination to support initiatives and specific campaigns such as the development of audit processes.

 Challenges posed by the current international situation

Anti-debt movements and campaigns participating in the event characterised the current conjunctural situation and challenges to be faced :

 1. In spite of the massive publicity regarding debt relief and cancellation programmes launched by the World Bank 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 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 (HIPC Heavily Indebted Poor Countries
HIPC In 1996 the IMF and the World Bank launched an initiative aimed at reducing the debt burden for some 41 heavily indebted poor countries (HIPC), whose total debts amount to about 10% of the Third World Debt. The list includes 33 countries in Sub-Saharan Africa.

The idea at the back of the initiative is as follows: a country on the HIPC list can start an SAP programme of twice three years. At the end of the first stage (first three years) IMF experts assess the ’sustainability’ of the country’s debt (from medium term projections of the country’s balance of payments and of the net present value (NPV) of debt to exports ratio.
If the country’s debt is considered “unsustainable”, it is eligible for a second stage of reforms at the end of which its debt is made ’sustainable’ (that it it is given the financial means necessary to pay back the amounts due). Three years after the beginning of the initiative, only four countries had been deemed eligible for a very slight debt relief (Uganda, Bolivia, Burkina Faso, and Mozambique). Confronted with such poor results and with the Jubilee 2000 campaign (which brought in a petition with over 17 million signatures to the G7 meeting in Cologne in June 1999), the G7 (group of 7 most industrialised countries) and international financial institutions launched an enhanced initiative: “sustainability” criteria have been revised (for instance the value of the debt must only amount to 150% of export revenues instead of 200-250% as was the case before), the second stage in the reforms is not fixed any more: an assiduous pupil can anticipate and be granted debt relief earlier, and thirdly some interim relief can be granted after the first three years of reform.

Simultaneously the IMF and the World Bank change their vocabulary : their loans, which so far had been called, “enhanced structural adjustment facilities” (ESAF), are now called “Growth and Poverty Reduction Facilities” (GPRF) while “Structural Adjustment Policies” are now called “Poverty Reduction Strategy Paper”. This paper is drafted by the country requesting assistance with the help of the IMF and the World Bank and the participation of representatives from the civil society.
This enhanced initiative has been largely publicised: the international media announced a 90%, even a 100% cancellation after the Euro-African summit in Cairo (April 2000). Yet on closer examination the HIPC initiative turns out to be yet another delusive manoeuvre which suggests but in no way implements a cancellation of the debt.

List of the 42 Heavily Indebted Poor Countries: Angola, Benin, Bolivia, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Comoro Islands, Congo, Ivory Coast, Democratic Republic of Congo, Ethiopia, Gambia, Ghana, Guinea, Guinea-Bissau, Guyana, Honduras, Kenya, Laos, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Myanmar, Nicaragua, Niger, Rwanda, Sao Tome and Principe, Senegal, Sierra Leone, Somalia, Sudan, Tanzania, Togo, Uganda, Vietnam, Zambia. I, HIPC II, PRSP Poverty Reduction Strategy Paper
PRSP Set up by the World Bank and the IMF in 1999, the PRSP was officially designed to fight poverty. In fact, it turns out to be an even more virulent version of the structural adjustment policies in disguise, to try and win the approval and legitimation of the social participants. ), the 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. (MDRI) and some regional banks, or of broad debt swap projects, the debt issue still represents an important South-North transfer of capital and resources and the imposition of policies according to the interests of lenders. The South is still bleeding, with annual transfers amounting to nearly 400 billion dollars just in capital.

 2. Parallel to this bleeding, a rapid increase in domestic public debts has been registered. This causes an important flow of public resources using the same mechanisms, often controlled by the same actors, which 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. from the flows resulting from external public debt service Debt service The sum of the interests and the amortization of the capital borrowed. , thus maintaining the financial dependence of our economies and production systems.

 3. The rapid reduction in the price of strategic raw materials in the global market and the aggravation of conditions to refinance the external debt of Southern countries, together with new loans pressed upon Southern countries, arguing that they are necessary to overcome the crisis, announce a new debt crisis that threatens many Southern countries in the short-term, including South American countries such as Argentina and Ecuador, and countries such as Brazil and Venezuela in the middle and long-term, in spite of the high levels of net international reserves they have been accumulated.

 4. The profound crisis of the capitalist system announces times of growing difficulties for Southern countries and for the working classes in the North. As always, new decisions and institutional mechanisms are going to be sought so that Southern Peoples and countries and people living in poverty in the North end up paying for this crisis resulting from the unlimited accumulation and the irresponsible de-regulation and hyper-financialisat ion processes of the economic game. Rises in debt payment flows, unemployment, and mass poverty, the dramatic increase in the number of starving and malnourished people in our countries, which we are already experiencing, are direct consequences of these strategies in which debt and its restructuring process play a major role.

 5. The shocking abundance of liquidity Liquidity The facility with which a financial instrument can be bought or sold without a significant change in price. released by the system’s ruling countries differs from the insignificant 100 billion dollars applied in the past decade to attempt to solve the still pending debt crisis, and the relatively modest resources – 80 billion dollars invested each year during 10 years according to UN estimates – needed by humankind to take significant steps in solving the most serious social problems (malnutrition, illiteracy, deficit in public health and education services, housing...). We cannot allow the continuation of this type of absurd and suicidal management the of resources resulting from the work of the Peoples.

 6. The answer of the ruling classes in Northern countries in view of the current serious crisis heads towards reinforcing the transnationalised financial capital and increasing speculative flows. For instance, a new speculative market on the sale of carbon emissions has been recently created in London.

 7. The recent election of Barack Obama which arouses lots of hopes will not imply any substantial change to the orientation of US economic policies, if we take into account the members of the economic cabinet, made up among others by Paul Volker and Larry Summers, who played a major role in building the economic policy of the empire which has resulted in the current serious crisis.

 8. The effort to use the G20 G20 The Group of Twenty (G20 or G-20) is a group made up of nineteen countries and the European Union whose ministers, central-bank directors and heads of state meet regularly. It was created in 1999 after the series of financial crises in the 1990s. Its aim is to encourage international consultation on the principle of broadening dialogue in keeping with the growing economic importance of a certain number of countries. Its members are Argentina, Australia, Brazil, Canada, China, France, Germany, Italy, India, Indonesia, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, USA, UK and the European Union (represented by the presidents of the Council and of the European Central Bank). – which has already evidenced its inability to solve the crisis – is unacceptable for our nations. It represents a manœuvre to conceal the fundamental roots of the crisis and continue marginalising Southern Peoples and countries from decision-making spheres. We reject, in particular, the proposals being discussed with the aim of reinforcing the mandate and resources of the IMF, World Bank and regional development banks which have been responsible for the present crisis.

 The answers of Peoples and our movements in view of the present conjunctural situation

 1. We underline with satisfaction the growing convergence among anti-debt movements which have decided to consolidate a common platform of actions and struggles, respecting the differences still characterising them.

 2. With regards to the debt issue, our movements have made significant progress from a conceptual, political, ideological and strategic point of view. We have moved from claiming the cancellation of external debts to the issue of debt illegitimacy; from campaigns focused on the financial debt to actions and campaigns implying a broader vision and including the financial, historical, social and ecological dimensions. Besides, our campaigns are achieving higher exchange and convergence levels with the struggles against free trade, militarisation, criminalisation of social protests, transnational companies, and agro-fuels and for the defence of food sovereignty, our territories and climate justice.

 3. As a result of social mobilisations, we have started to receive answers from governments. Among them, we highlight the fact that the Government of Norway acknowledged the irresponsible nature of part of the debt claimed from various Southern countries and consequently cancelled the pending claims.

 4. The promotion of comprehensive and participative audits to debt processes is making rapid progress. We commend the audit carried out by the Ecuadorian government, which following a year of investigations, obtained conclusive results, thus clearly evidencing the illegitimate, fraudulent, illegal and criminal nature of the debt claimed from Ecuador. We also commend the decision made to suspend payment of some parts of the debt owing to their proven illegitimacy. We call upon the government of Rafael Correa to continue acting according to the conclusions drawn by the Public Credit Audit Commission (CAIC) and to set a repudiation process into motion in defence of the rights of the Peoples of Ecuador. The latter, of course, could serve as example and motivation for Southern countries to build a “Non payment of illegitimate external debts” front, demanding sanctions for the guilty and reparation for crimes.

 5. We support the decision made by President Fernando Lugo to launch an audit process of the bi-national debt related to Itaipu, between Paraguay and Brazil, in order to create new conditions within the development process in Paraguay and lay the foundations to promote relations of justice, sovereignty and solidarity between the two Peoples and countries.

 6. We support the recent decision of the Brazilian Congress to set up a Parliamentary Investigation Commission (CPI) on the country debt. It represents a decisive step towards the implementation of an audit in one of the countries that has paid huge amounts of money through anticipated debt payments and debt service in spite of mobilisations, including a Popular Consultation through which six million Brazilians demanded the suspension of all payments until the constitutional demand for an audit was fulfilled, and the citizen debt audit that has managed to evidence several violations of the constitution and international regulations in the management of the Brazilian public debt.

 7. Similar initiatives are being implemented in several countries and regional instances, both in the South and the North, and will certainly receive the strong and enthusiastic support of our movements to advance in the process of liberation from debt slavery. The commitments announced by the governments of Bolivia and Venezuela, the good news regarding the resolutions of the European Parliament, the legislative system in Zimbabwe and Belgium, among others, confirm that we are experiencing new times, with an initial recognition of the destructive violent nature of debt, and of the fact that it is possible to confront it. It is also worth highlighting the launching of citizen audits in countries such as Philippines, Mali and Indonesia, among others. Whether official, parliamentary or citizen, audits should be undertaken within an environment of broad mobilisation, thus acknowledging the fact that they are tools of struggle rather than ends in themselves.

 8. We protest against the shameful campaign of calumnies launched against our fellows María Lucia Fatorelli, Marcos Arruda, and others, by the ruling classes in Brazil through articles published in the newspaper O Globo, aimed at ruining the reputation of people that have always defended the interests of the Brazilian Peoples. We call upon all our organisations to defend them as well all others contributing their knowledge to the audits and actions carried out with the aim of establishing justice. The truth about the looting of our wealth through debt processes must be exposed to the public eye, those who are responsible must be punished and the Peoples and countries affected must be repaired accordingly.

 9. We commend the multiple efforts made by our movements in the context of Popular Tribunals which have been translated into major progress in the field of the characterisation of financial, historical, social and ecological debts. The recent editions of Peoples’ Courts in Vienna (2006), New Delhi (2007), The Hague (2007), Lima (April 2008), Colombia (August 2008) and during the Third Americas Social Forum held in Guatemala (October 2008), among others, have facilitated the collection of an outstanding documentation, thus evidencing the multiple crimes committed by transnational companies against our Peoples, with the support of international financial institutions and the strong indebtedness of Southern countries. These activities that are being carried out with a participative methodology associated with the struggles of indigenous movements in defence of the Pacha Mama and their territories, among others, represent significant advances which foresee victories in the protection of our common goods Common goods In economics, common goods are characterized by being collectively owned, as opposed to either privately or publicly owned. In philosophy, the term denotes what is shared by the members of one community, whether a town or indeed all humanity, from a juridical, political or moral standpoint. against the subjugating mercantilisation process of capitalism and the kingdom of impunity.

 Our priorities within the next months

 1. We call upon all movements to join efforts in a broad process of struggles under the banner of « non payment of illegitimate debts » and « restitution and reparation », which represents a strategic tool, aimed at reinforcing the struggle against impunity and at opening means to increase the North-South flow of resources and capital, in the context of a strong process of redistribution of wealth, thus starting to mend the dramatic consequences of over 527 years of looting.

 2. We call upon all our movements to participate in the Week of Action Against the G20 from March 28 to April 4 and its proposals to reform the system and global financial institutions which only aim at reinforcing the logic of looting and concentration. It is necessary to strengthen the debate and mobilisation, particularly in the countries of the Global South, regarding the development of alternatives leading to a true financial sovereignty. Likewise, it is necessary to raise awareness and denounce the dangerous process aimed at reinforcing the IMF, World Bank and other regional banks as a response to the current situation of crisis.

 3. We welcome the initiative of Jubilee South, the Southern Peoples Alliance of Creditors of Historical, Social and Ecological Debts, and the World Council of Churches to carry out a Peoples’ Tribunal on the Ecological Debt of the South in the next few months, and we call upon all movements and organisations to support and actively participate in its preparation and follow-up of such process. The organisation of this Tribunal will open new struggle scenarios, taking into account who the real creditors are, particularly within the present context of ecological destruction, including the reinforcement of the extractivist, privatising and mercantilist model regarding vital resources such as water, land, air, and acknowledging the need to restore and repair the Ecological Debt owed by the North to the South in order to face climate change.

 4. We call upon movements and organisations to participate, the same as in previous years, in the Week of Global Action against Debt and IFIs, to be held from 7-15 October 2009, joining efforts to continue enlarging and making the International South-North Campaign on Illegitimate Debt more dynamic and taking the opportunity to establish links with other movements and struggles for Climate Justice, Gender Equality, against Free Trade, Militarisation and Criminalisation. In this framework, we join the global Call to carry out a Day of Struggle in Defence of Pachamama on October 12 and call on all our movements to participate.

 5. We call upon all movements and organisations to carry out an active campaign against the Inter-American Development Bank (IDB) which is celebrating its 50^th anniversary at the end of March in Medellin, Colombia. It is an excellent occasion for us to say “50 Years is Enough, Reparations Now!” and to unveil the IDB’s policies that represent one of the pillars of the system of imperialist domination in our continent by means of the promotion, encouragement and development of projects, programmes and actions in the logic of the Washington Consensus. Our call aims to unleash a process of mobilisation in Medellin and in all our countries and to carry out multiple studies of participative cases that may allow us to document, repudiate, demand reparations and sanctions for IDB crimes against the Peoples of our Abya Yala.

 6. We call upon the Governments involved in the project of the Bank of the South to accelerate the implementation of this new institutional instrument which should be structured around a completely different logic from the current global financial architecture which is at the service of transnational capital. The Bank of the South must be an instrument at the service of the development of our countries within the logic of a solidarity based integration of our Peoples. It must become a strategic instrument to recover the financial sovereignty capable of overcoming the capitalist logic that uses indebtedness as an instrument of domination of our countries, together with other innovations in the regional financial system. It is of pressing importance that the obstacles preventing the implementation of such an important project for the future of our nations be solved.

 7. We call upon all the movements of the Americas to mobilise in order to participate either directly, from their country or from their region in the People’s Summit to be held at Port-of-Spain / Trinidad and Tobago from 16-18 April. This summit must be an event of reaffirmation of the things achieved in previous editions from 1998 onwards. We will strengthen our achievements towards the transformation of our societies (as is taking place in various national scenarios) and will oppose any attempt from the United States and its allies to resuscitate the FTAA with new ornaments and conceptual manipulations, in the name of hemispheric security and prosperity.

 8. We call upon all our movements to express solidarity with the struggle for the defence of the rights of Palestinian people.

 9. We call upon all our movements to support the Solidarity Campaign with the People of Haiti that is struggling to be freed from the military occupation, to cancel the illegitimate external debt claimed by IFIs and for the implementation of a solidarity based reconstruction project. During 2008, several new voices were heard demanding the cancellation of the debt claimed from Haiti, which in spite of the deteriorating living conditions of its population (it is calculated that over 3 million people are suffering from growing food insecurity) is still paying the weekly amount of over 1 million dollars. Likewise, we highlight the importance of the struggles for sovereignty of still colonized Caribbean countries as well as the reparation of such historical debts.

 10. We commend the outstanding success of ALBA (Bolivarian Alternative for the Americas) particularly in the field of literacy, health care Care Le concept de « care work » (travail de soin) fait référence à un ensemble de pratiques matérielles et psychologiques destinées à apporter une réponse concrète aux besoins des autres et d’une communauté (dont des écosystèmes). On préfère le concept de care à celui de travail « domestique » ou de « reproduction » car il intègre les dimensions émotionnelles et psychologiques (charge mentale, affection, soutien), et il ne se limite pas aux aspects « privés » et gratuit en englobant également les activités rémunérées nécessaires à la reproduction de la vie humaine. and public education. An integration based on solidarity among Peoples may bring about – within a short time – impressive qualitative results in regards to improving living conditions. Nevertheless, we acknowledge the fact that there are situations in which some of the agreements signed are being diverted from their goals and monopolised by corrupt bureaucracies; the resulting benefits being absorbed by groups belonging to traditional oligarchies. This is why the Peoples should take ownership of these instruments since they represent wonderful tools for social investment and research with a view to changing the energy system. In this sense, and as it was decided at the Fourth Assembly of Caribbean People in Cuba and at the Coordinating Meeting of Jubilee South/Americas in Managua (both in July 2008), we call upon our movements to take greater ownership of new agreements and invite them to organise a summit of Caribbean and Central American social movements on the Petrocaribe agreements and the energy crisis.

The current period is decisive for the future of our Peoples and humankind. We should encourage increasing mass struggles, questioning the grounds of illegitimate debt processes and the capitalist system as a whole. We should face the present crisis of the system in order to make a real way out possible aimed at the implementation of new society systems where the sovereigntyof the Peoples, the Buen Vivir and harmony with nature are basic principles. We call upon the Governments of Southern countries to rapidly organise a broad front for the non-payment of the illegitimate financial debt, also acknowledging their status as creditors of huge historical, social, ecological and financial debts. Such front must offer spaces for both resistance and offensives. The Governments of Southern countries should not participate in the farce of the G20 and should fight for the emergence of a new international financial architecture that addresses the rights and basic needs of our communities, peoples, countries and regions.

 Long live the struggle of the Peoples! We don’t owe, we won’t pay ! We don’t want to pay for the crisis of the rich ! Down with capitalism! We, Southern Peoples, are the real creditors ! Reparations Now !