Don´t Owe, Won´t Pay: YES to life, NO more vultures!

25 July 2014 by Jubilee South-Americas

This past June 16th, the Supreme Court of the U.S. announced two highly pernicious decisions not only for Argentina and its people, but for all those who defend sovereignty and the primacy of human rights over the claims of big capital. The Court rejected Argentina´s appeal, leaving firm the lower court rulings which, since 2012, order Argentina to pay 100% of the debt claimed by several investment funds known as vultures - led by NML Capital - and to pay in full before continuing to service the bonds it restructured in 2005 and 2010. Moreover, the Supreme Court upheld those same vulture funds’ demand that Argentina identify the assets it holds outside its own territory, in order to facilitate new actions seeking to collect what the U.S. courts have decided that Argentina owes them.

Both decisions are as reprehensible as expected. In a world where human life, the life of nature, sovereignty and the rights of peoples and nations are increasingly undermined by the actions of big business - the financialization and perpetual crisis of the global capitalist economy, the rise of the casino economy, the intensification of its exploitative and predatory power over human labor and natural goods – these decisions exemplify the consolidation of a legal-political institutionality that recognizes no limit to usury and capitalist greed. A veritable architecture of impunity that, starting with the U.S. Foreign Sovereign Immunity Act which in 1976 established that the sovereignty of nations ends when the market so decides, has been built up over the subsequent years of neoliberal boom through the signing of multiple treaties and agreements of “free trade”, “economic cooperation”, investment protection, and the waiver of national sovereignty to foreign courts and arbitration forums such as the ICSID ICSID The International Centre for the Settlement of Investment Disputes (ICSID) is a World Bank arbitration mechanism for resolving disputes that may arise between States and foreign investors. It was established in 1965 when the Washington Convention of that year entered into force.

Contrary to some opinions defending the fact that ICSID mechanism has been widely accepted in the American hemisphere, many States in the region continue to keep their distance: Canada, Cuba, Mexico and Dominican Republic are not party to the Convention. In the case of Mexico, this attitude is rated by specialists as “wise and rebellious”. We must also recall that the following Caribbean States remain outside the ICSID jurisdiction: Antigua and Barbuda, Belize, Dominica (Commonwealth of) and Suriname. In South America, Brazil has not ratified (or even signed) the ICSID convention and the 6th most powerful world economy seems to show no special interest in doing so.

In the case of Costa Rica, access to ICSID system is extremely interesting: Costa Rica signed the ICSID Convention in September, 1981 but didn’t ratify it until 12 years later, in 1993. We read in a memorandum of GCAB (Global Committee of Argentina Bondholders) that Costa Rica`s decision resulted from direct United States pressure due to the Santa Elena expropriation case, which was decided in 2000 :
"In the 1990s, following the expropriation of property owned allegedly by an American investor, Costa Rica refused to submit the dispute to ICSID arbitration. The American investor invoked the Helms Amendment and delayed a $ 175 million loan from the Inter-American Development Bank to Costa Rica. Costa Rica consented to the ICSID proceedings, and the American investor ultimately recovered U.S. $ 16 million”.

The attack of these hedge funds Hedge funds Unlisted investment funds that exist for purposes of speculation and that seek high returns, make liberal use of derivatives, especially options, and frequently make use of leverage. The main hedge funds are independent of banks, although banks frequently have their own hedge funds. Hedge funds come under the category of shadow banking. is not new.

Notwithstanding the backing they have now received from the US’ highest court, it is part of a process of bloody, illegitimate, and illegal indebtedness whose high cost the people of Argentina have been paying for far too many years. Without going back any further in history, the bonds now in the claws of these vultures can be traced directly to the odious debts accumulated by the dictatorship (’76 - ’83) and the debt imposed during the ’90s, under the extorsive power of those same debts and the decisive support 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.
, 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.

, Paris Club Paris Club This group of lender States was founded in 1956 and specializes in dealing with non-payment by developing countries.

, and others. A debt that was found to be fraudulent and arbitrary (Olmos Case, Case No. 14.467, Federal Court No. 2 for Criminal and Correctional Matters, Federal Capital, July 13, 2000) and which is still the subject of ongoing judicial investigations in other Argentine courts.

30,000 peoples disappeared, the privatization and denationalization of public patrimony, the successive structural adjustments and the economic collapse of 2001 with its horrendous consequences in terms of impoverishment, unemployment, exclusion and the reorganization of the economy, deepening its exploitative and extractive nature so as to be better able to service a debt which, for its proven illegalities, long ago should have been declared null and void. These are just some examples of the human, social, economic, and ecological cost that will only continue to grow if the underlying problems are not addressed.

So far, the Argentine government has tried to “win” the game of debt, playing with the same rules established by its purported creditors. Its aim is to return to international capital markets in order to borrow more and continue its dependency and submission to the domination exercised by those very markets. While the government keeps betting on a “more humane” capitalism however, that same capital keeps reaffirming that its very nature is exploitative and predatory. The results are clear: despite the fact that Argentina has made debt service Debt service The sum of the interests and the amortization of the capital borrowed. payments of more than USD 400 billion since the end of the dictatorship in 1983, and more than USD 174 billion in the last decade alone, over that same period the debt has increased from USD 43 billion to more than USD 240 billion. The fact that the partial moratorium on debt payments, after the collapse of 2001, allowed Argentina to begin a process of economic recovery, clearly shows that there are alternatives to paying over and over for a debt that is not even owed.

Do not let the vultures continue flying!

We call on peoples, movements and organizations, governments and institutions of integration, especially here in our America and throughout the South, to join forces to stop this onslaught and the possibility that the vultures of any ilk, continue to live off us. In particular, we call for support of the demands and actions expressed by numerous Argentine organizations and popular leaders, as in their declaration VULTURES NEVER AGAIN:

  • Support the Argentine people in their struggle to stop paying what they do not owe. Whatever measures are taken by the government now, for the people of Argentina the cost of continuing to recognize and pay debts that have been proven to be fraudulent is already too high. Let us unite behind their demand that the Argentine government suspend all payments until a participatory and comprehensive audit of the various claims can be completed, building on the criminal investigations already realized or in process. This would help to separate out those debt claims that are illegitimate and illegal and enable priority to be placed where it should be: on payment of the social debt to the only proven legitimate creditors: the Argentine people.
  • Support the right of the Argentine government to not give into these hedge funds or vultures of any kind, notwithstanding the unfair backing of the U.S. judiciary or wherever. It is important to remember that not all laws are just, and unjust laws should be resisted until they are overturned. The Guiding Principles on External Debt and Human Rights reaffirm that human rights, including in particular economic, social, and cultural rights, take precedence over any commercial agreement or debt contract. They underscore for lender and borrower states, financial companies and investors, and multilateral institutions directly involved in the processes of indebting sovereign nations, that it is the right and obligation of States to take the necessary measures to comply first and foremost with the human rights of their populations, as well as to not pay debts that are odious or whose legitimacy and legality have not been established. They also reaffirm the obligation of all States to fulfill, and enforce, these rights.
  • Call on the Argentine government, and all governments that want to protect their populations and prevent new vulture attacks, to put an end to the privileges and impunity of such transnationals, by:

Annulling and ending further recognition of the waivers of sovereignty imposed in debt contracts and the extension of jurisdiction to foreign courts and extra-judicial arbitration forums such as ICSID, where other vultures nest;

Denouncing and stopping further negotiations and the signing of free trade and investment protection treaties and agreements which involve the surrender of our sovereignty to big business and the merchants of capital.

  • Call on all governments, particularly in Latin America and the Caribbean and the rest of the global South, on the institutions of integration such as UNASUR, ALBA, CELAC, the G77, to support Argentina in the direction indicated and to advance together in the creation of new policies, instruments and institutions that break once and for all with the neoliberal, capitalist schemes imposed and allow us to build on the basis of what is ours, including for example a South Solidarity Bank and the adoption of national, regional, and international laws and policies of control over capital movements and transnational corporations in general, in order to effectively subject them to sovereignty and respect for all human rights.

The vultures will not find it so easy to continue flying over us if our countries do not allow them to pass. Together we can move forward in the building of new realities of life and bien vivir, putting an end as well to the impunity with which the international economic and financial system works and ensuring that those responsible for the crimes committed make reparations, paying the debts they have accumulated to us.

We don´t owe, we won´t pay! The only true creditors are the people!

More information in English:

Pérez Esquivel to Griesa: it is just not to pay an illegitimate and immoral debt

Vultures Here, Vultures There: the Never Ending Debt, February 2014

Vulture verdict underscores the urgency of a new debt strategy: Audit, not more swaps, to stop paying what we do not owe, August 23, 2013

The Liberty has returned! May our liberty return! February 2013

Support us with you endorsement! The real debt is with the rights of the Argentine people, 10 December 2012

Other articles in English by Jubilee South-Americas (4)



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