Committee for the Abolition of Illegitimate Debt

 Thursday 15 February: The opening march

The opening march brought together nearly 15,000 people who marched to demand a different world.The slogans demanded ecological justice, climate justice and social justice. They called for the dismantling of the World Bank and the IMF, and the cancellation of illegitimate debts, among many other demands. The march brought together many Nepalese people. The most exploited sectors of the working classes were strongly present and very vocal in their demands.

 Friday 16 February: A great success for the CADTM’s first two workshops at the World Social Forum

New international debt crisis: The first seminar organised by the CADTM was attended by almost 100 people. It focused on the new international debt crisis and was concluded by Éric Toussaint with the slogan “There is life without 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 ”, the conference was attended by CADTM delegates from countries hard hit by this new crisis.

Aman Rahman (Bangladesh), Vice-President of the Democratic Budget Movement (DBM), opened the seminar by highlighting the conditionalities imposed by the IMF 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.

on Bangladesh’s population of 170 million.

Amali Wedagedera (Sri Lanka) explained the exemplary situation in Sri Lanka, which has been suffocated by the IMF since it defaulted in the spring of 2022, followed by an exceptional social movement that led to the flight of President Gotabaya Rajapaksa, before he managed to return and get his country to sign a damaging agreement with the IMF.

Another country hard hit by IMF programmes was Pakistan, represented among the speakers by Abdul Khaliq, head of CADTM Pakistan. After the floods in the summer of 2022, Pakistan, which has a population of 230 million, signed new agreements with the IMF to the tune of 3 billion dollars. As in the case of Sri Lanka and Bangladesh, these agreements are accompanied by cuts in social budgets, reduced subsidies on basic necessities, privatisations, etc.

David Otieno (Kenya) then spoke about the situation in his country, which in the past was held up as an example by the international financial institutions. This country of 53 million inhabitants, which has been fully integrated into neo-liberal globalisation, finds itself trapped in a serious debt crisis. David Otieno, a member of the CADTM International network and Via Campesina, focused in particular on export monocultures, which are a disaster for farmers and for the country’s food sovereignty.

Solange Koné also spoke about the situation in the Ivory Coast (population 27 million), stressing the need to continue and expand the fight for the abolition of illegitimate debts and the urgent and imperative need for reparations.

Abusive microcredit and exploitation of the poor : This workshop, which brought together around 50 people, dealt with abusive microcredit. Amali Wedagedara, who works on a regular basis with women who are victims of microcredit, explained the mechanisms behind abusive microcredit. In some cases, the abusive 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. make it impossible for women to repay their loans and drive them to suicide. Interest rates rose to 220% in Sri Lanka in 2018. Out of a population of 22 million, 2.4 million women have fallen into the microcredit trap, some of whom have defaulted on their debts. On this occasion, the Sri Lankan government came to the rescue of the microcredit companies. So it was public money that financed the defaults caused by the microfinance vultures.

Sushovan Dhar then described the situation in India, the most populous country on the planet with over 1,400 million inhabitants. In India, the microcredit sector is not regulated at all. He called for the establishment of a social security system and a public banking sector lending at low 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. rates, pointing out that over-indebtedness is simply a reflection of the withdrawal of the State and the vulnerability of the population.

One of the participants insisted on the fact that at present, it is the men who decide to take out a microcredit loan, but it is the women who repay the money borrowed. Another participant, from Tamil Nadu in India, insisted on the fact that women spend their time dealing with debt repayment problems and are no longer engaged in organising.