Committee for the Abolition of Illegitimate Debt

Press Statement

On the occasion of the 112^th Inter-Parliamentary Union (IPU) Assembly, the Freedom from Debt Coalition (FDC) and the Jubilee South call on all delegates, their parliaments and governments to seriously take into account the grave situation of South countries and to put an end to the bondage of debt.

The debt burden continues to take its toll among South countries, sucking dry any capacity of these countries to ever cope with the needs of their people resulting in widespread poverty, persistent underdevelopment, and even crisis. Creditors generally exact payment without regard to the economic and social realities of indebted countries. National budgets are skewed in favor of payments, which severely limits governments’ capacity to provide education, health, welfare, infrastructure, and other basic services. In the case of the Philippines, which is currently undergoing a fiscal crisis, 95% of its tax revenues goes to debt servicing alone.

The UN Secretary General, Kofi Annan, has called the tsunami disaster the worst natural disaster in recent history. Indeed the loss of lives, destruction of the environment and damage to infrastructure from tsunami has been overwhelming. But we must not forget that poverty, deprivation, and disease are continuing disasters particularly in the South. Millions die from lack of food, safe drinking water and the most basic healthcare. Impoverishment magnifies the impact of natural disaster more than ten-fold. The burden of the debt is one of the central factors in this burgeoning misery.

Post-tsunami developments bear out this truth. The more than 200,000 dead, orphaned, homeless, sick and injured from Aceh in Indonesia to Somalia and Kenya stand as heart-rending evidence to the historical tragedy of the debt that has robbed these countries with the very resources to meet urgent human needs, including measures that would have strengthened their preparedness to natural calamities and given them more options to address the same.

While financial and material aid for immediate relief is urgent, the costs for long-term reconstruction will be enormous. Given the debt burden and debt servicing of these countries, the additional financial burden as a consequence of this natural disaster is likely to lead to an unimaginable economic disaster. Economic development of these countries has in fact been set back by a number of years.

FDC and Jubilee South see the relief given by some countries and international financial institutions as mere symbolic gestures and at best, palliative. Some actions even increasingly point toward veiled predatory agenda that underpins avowal of humanitarian aid.

A genuine solution to the problem of poverty and underdevelopment in South countries must be geared towards putting an end to the deadly cycle of borrowing, repaying and acquiescing to loan conditionalities.

Indeed, the Inter-Parliamentary Union has in the past recognized the problem of the debt. The resolution adopted by the 73^rd Inter-Parliamentary Conference (Lomé, 1985) emphasized the role of parliaments and their contribution towards the elimination of poverty by eliminating the burden of international debt. This was reiterated in the 74^th Inter-Parliamentary Conference (Ottawa, 1987) with the resolution on the contribution of parliaments to the search for measures and actions aimed at removing the burden of foreign debt that weighs on the developing countries. Again, the 88^th Inter-Parliamentary Conference (Stockholm, 1992) focused on the need for a radical solution to the problem of debt in the developing world.

The challenge now is to take decisive action. We call on the Inter-Parliamentary Union (IPU) with its 147-strong membership to support the call for the total and unconditional debt cancellation of debts of all South countries heavily burdened by a collective history of tragedy and crisis under debt domination. Such action should immediately take effect starting with (1) most impoverished countries, (2) all tsunami and disaster-stricken countries, and (3) countries in crisis.

Immediate and unconditional debt cancellation for tsunami-affected countries and all South peoples!

No to the privatization of water, power and other basic services!