First university of CADTM Africa

25 March 2014 by CADTM Africa


CADTM Africa organized its first university at Hammamet, Tunisia on 22-23 March 2014. After hosting the World Social Forum in 2013, Tunisia welcomed the university of CADTM Africa. Citizens came from all over Africa - Burkina Faso, Togo, Benin, Cameroon, Democratic Republic of the Congo, Mali, Niger, Senegal, Morocco, and Tunisia – to compare views on ways of tackling public debt and various issues such as natural resources, citizens’ auditing, and colonial debt.

Fathi Chamkhi was understandably moved when he opened this first university of the CADTM Africa network. He thanked the audience, those delegates who stand for an Africa that struggles for the continent’s present but also for its future.

Mimoun Rahmani, coordinator for the CADTM Africa network, noted that the network, while working on debt issues, is also committed against all forms of oppression. ‘Debt is a tool to transfer wealth from the South to the North, a significant part of the debt is illegitimate and odious, it was repaid several times over, and it represents a crushing burden in the States’ budgets. Our main strategy is to carry out citizens’ audits of the debt.’

This year a major international campaign against the debt will be organized on the occasion of the 70th anniversary of the Bretton Woods institutions: 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.

http://imf.org
 and 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.

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Renaud Vivien, CADTM international, underlined that the IMF is not only active in countries of the South; it is also present in Europe, whether in Greece, Ireland, or now even in the Ukraine.

The participants then joined the two workshops organized in the morning.

Looting of natural resources and conflicts in Africa

Looting Africa is nothing new, it started with the triangular trade and later colonization amounted to direct looting of resources. Nabil, CADTM/RAID, insisted that cancellation of debts was the least that could be demanded.

Issa, of the national debt and development network in Niger, noted that the issue of compensations for stolen resources was more than ever on the agenda, ‘such issues were present before, during and after colonization. We live a perpetual war against Africa, with all powerful nations carving up their share Share A unit of ownership interest in a corporation or financial asset, representing one part of the total capital stock. Its owner (a shareholder) is entitled to receive an equal distribution of any profits distributed (a dividend) and to attend shareholder meetings. of the ‘dark continent’ and its resources. Stealing occurred through negotiations, laws, or sheer force. The Washington Consensus is the legal form in which it can be further implemented.’

Niger is the third world producer of uranium. Extraction started in 1971, mainly through subsidiary companies of Areva, Somaïr and Cominak. While these companies produce 94 thousand tonnes of uranium per year, the State revenues from uranium do not total more than 22% of the country’s total budget.

Issa tells us that seven armed uprisings have cut off the north of the country. State agents are not protected, only Areva agents are. The figures above (on the production of uranium) are those declared by Areva, they cannot be trusted. The leaders of the uprising used to live in France. ‘The uprising only occurred to make looting possible. Orders are delivered from France. Those rebel leaders perpetrate all kinds of crime, but they never did anything that could jeopardize French interests.’ In January 2014 the Nigerian government set up an auditing system for the two companies so as to establish what Areva actually produces and what its profits amount to.
Next Broulaye explains the specific situation in Mali and wonders why projects that are financed by the EU are not in the hands of Mali companies. How come the Mali government only control 20% of gold extraction in Mali? Moreover, many villages are moved to make way for mineral extraction.

Broulaye, secretary of CADTM Africa, also tells about the privatization of woodland that recently started in Mali. A law makes Public-Private Partnerships compulsory, the logic behind the process being to use public resources to feed the private sector. It is a good thing if citizens are involved, but it mustn’t be a sham: when we are invited, documents are ready to be signed and they must pander to the development needs of the creditors. This is the same tragic farce as in the debate on nanotechnologies in France. [1]

Historical and colonial debts in Africa

Massasamba, Togo, started off the workshop by reminding us of the increase in Togo’s debt, which is partly due to the soaring of prices for phosphate, a major entry in the country’s budget. As in other African countries close friends of the establishment have largely benefited from the increase in the public debt. Other instances of illegitimate debts, some works that were never carried on in spite of signed and financed contracts.

Salah, Morocco, talked about the Moroccan colonial debt. In 1860 Spain demanded financial compensation for their leaving Tetouan, which they had been occupying for several years. In spite of a loan from Britain Morocco could not pay the required amount. So Spanish collectors were sent to man the Moroccan customs offices. In 1880 the Madrid conference was organized to decide on the carving of Morocco, with many countries around the table. The economic situation is disastrous, partly because of compensations paid after several military defeats, partly because of the sultan’s way of life. We can mention the car he bought while there were no roads in Morocco. He had a road built especially for him around his palace. Salah points to the similarity with the fast railway line currently built between Tanger and Casablanca. [2]

Fathi, RAID/CADTM Tunis, asserts that the debt issue is not only financial but also political. In 1956, when tunisia became independent, it had to buy its own farmland from the French settlers. To do this, it had to borrow from France. Incredible!

Youssef points out that while we discuss economic debts we should also include cultural debts. There is a one-dimensional conformism all over the world. To him the connection between debt and culture is very close. Claude concurs and reminds us of the many cultural artifacts from Africa that are stored in European museums.

Auditing the debt, why and how?

Africa’s debt can be defined as odious, immoral, and fraudulent. It was not contracted for the good of the people but to finance projects that are no use for the essential needs of the population. Governments commit themselves in the name of the people, but the consequences are to be borne by all.

Audits aim at investigating the issue of the debt and understanding the processes that run global economy: who borrowed what in whose name? Auditing makes it possible to understand how governments become indebted and to distinguish between legitimate debts and odious debts. We can determine what part served the people’s welfare to establish what should be cancelled.

In Tunisia 85 % of loans since 2011 are used to pay for Ben Ali’s debt. This is a standard case of illegitimate loans. Renaud Vivien reminded us that in 2012 the European Parliament defines the debt owed by the Arab world as odious and illegitimate. Yet nothing has changed. CADTM still insists with elected representatives for the EU to keep its promises.

The government audit in Ecuador in 2007-2008 with the participation of social movements made it possible to identify the country’s illegitimate debts contracted between 1976 and 2006. On the basis of this audit Ecuador refused to pay part of its debt and saved USD 7 billion, which could be used to increase public expenditure, particularly for healthcare, education and infrastructures. This example shows that you can indeed refuse to pay debts. This audit was set up largely thanks to the mobilisations of social movements.

In Europe citizens pay the bill for the bailing out of banks decided by governments. In Belgium and France debt is the biggest public expenditure: right-wing people blame the fiscal deficit on the unemployed instead of wondering where the debt comes from.

In 2009 an audit was launched in Mali. People first wanted to understand the debt issue to get organized within the country and know how to argue against the process of indebtedness. Under the pressure of the World Bank and the IMF, the government had to accept a 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/
programme. The strong point of the CAD Mali (Collectif des Alternatives africaines Dette et Développement) lies in the power of citizens to counter government measures.

An audit was also carried out in a creditor country. Norway cancelled the debts it considered to be illegitimate towards several countries of the South thanks to social mobilisations.

In spite of the crushing burden of the debt weighing on many countries, there are reasons for hope.

Translated by Christine Pagnoule and Adam Clark-Gimmig

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