Committee for the Abolition of Illegitimate Debt

Ditwah builds on the frequency of climate change impact on tropical countries such as Sri Lanka and compounds the severity of the economic crisis, marked by a sovereign debt Sovereign debt Government debts or debts guaranteed by the government. default of approximately USD 35 billion in 2022. While a majority of people are reeling under austerity measures, including regressive tax hikes, subsidy cuts, and inadequate social security measures, the Government of Sri Lanka (GoSL) has become a prisoner of the ongoing Extended Fund Facility program 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.

http://imf.org . The IMF controlling government spending not only restricts the ability of the government to respond to the ongoing humanitarian crisis, but severely impedes investing in infrastructure, recuperating livelihoods and adapting to further climate change impacts.

Ditwah underscores systemic climate injustice. Sri Lanka contributes less than 0.08% to global fossil carbon emissions yet suffers intensifying climate impacts, including floods, droughts, and landslides. Unsustainable development projects, and industrial mono-cultural cultivations have driven deforestation, soil degradation, and ecosystem disruption, promoting big capital and global markets over local communities and indigenous peoples rights and are also responsible for Sri Lanka’s disproportionate debt burden.

Debt-financed mega-infrastructure projects such as the highways, deep-sea ports, & energy parks have bypassed environmental safeguards, displaced people, destroyed their livelihoods, heightened vulnerabilities, and fueled human-elephant conflicts, leaving marginalized groups, especially peasant farmers, small scale fishers, plantation workers and pastoralists trapped in cycles of economic and ecological harm.

Recovery demands urgent revision of the debt restructuring agreement, massive debt reduction, and an immediate standstill on current and future debt servicing for Sri Lanka’s recovery. More climate finance as grants, not loans, alongside reparations from high-emitting nations are also needed. IMF conditions perpetuate a debt-climate trap, hindering building resilience and eroding social protections amid 6.3 million facing food insecurity. Cyclone Ditwah has severely disrupted agricultural production across Sri Lanka, waterlogging vast areas of cultivated land and damaging staple crops, creating significant risks for a large-scale food shortage in the coming months if urgent support for small-scale producers is not provided. Ensuring availability of food involves not only replenishing the markets through necessary food imports, but investing on small food producers such as peasant farmers, women, small fishers, plantation workers and pastoralists whose backs are broken due to recurrent nature of climate disasters.

The government’s Rebuilding Sri Lanka Committee established under presidential control to assess requirements, set priorities, allocate resources and disburse funds for approved recovery activities comprises corporate leaders who are responsible for environmentally destructive energy projects, worker exploitation and microfinance debt traps. Without civil society or community representation, these corporate leaders whose track records prioritize shareholder value over social equity Equity The capital put into an enterprise by the shareholders. Not to be confused with ’hard capital’ or ’unsecured debt’. and ecological sustainability risk steering recovery toward 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. -driven outcomes rather than people-centered restoration.

Global lessons from COP, Plastic Treaty, and Biodiversity COP negotiations reveal that while Indigenous and marginalized voices demand justice for people and the planet, dominant business interests at decision tables consistently block these priorities, paving the way for corporate capitalization on disasters.

Demands for Debt Justice and Climate Justice

Sri Lankan civil society collectives, including social movements, trade unions, and advocacy groups demand an independent, multi-stakeholder loss and damage assessment (with representatives of affected communities and civil society accountable to those constituencies) quantifying Cyclone Ditwah impacts for reparations. Economic losses cover housing, agriculture, other livelihoods and infrastructure via replacement costs. Non-economic losses include Disability-Adjusted Life Years (DALYs) from deaths/injuries, biodiversity degradation in Ramsar wetlands, and cultural/heritage erosion for marginalized communities. Valuation uses ecosystem services, Human Rights-Based Approach (HRBA) metrics, and peer-reviewed standards, linking totals to debt cancellation offsets.

Civil society collectives further urge immediate action on the debt crisis triggered by the 2022 default on USD 35 billion in external obligations, including USD 14.7 billion in high-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. International Sovereign Bonds. Austerity measures under the IMF Extended Fund Facility, demanding a 2.3% primary surplus by 2025 and gross financing needs below 13% of GDP from 2027, have imposed subsidy removals, privatization, and limitation of State spending harming vulnerable communities.

The Demands:

– An inclusive loss and damage assessment led by affected communities with representatives from indigenous communities, small food producers, women, fishers, plantation workers, civil society organizations, technical experts, and government agencies must comprehensively quantify economic and non-economic impacts.

– Halt energy subsidy removals, fuel market pricing, indirect tax hikes, and social welfare cuts (social protection at 0.6% GDP GDP
Gross Domestic Product Gross Domestic Product is an aggregate measure of total production within a given territory equal to the sum of the gross values added. The measure is notoriously incomplete; for example it does not take into account any activity that does not enter into a commercial exchange. The GDP takes into account both the production of goods and the production of services. Economic growth is defined as the variation of the GDP from one period to another. ) that prioritize fiscal consolidation over Loss and Damage (L&D) recovery and climate resilience.

– Repudiate high-interest commercial debt from private creditors under IMF-monitored restructuring, offsetting against quantified L&D (USD 1-1.5B economic + non-economic priceless losses).

– Restructure IMF EFF conditionalities exempting loss and damage and climate investments from fiscal targets; redirect debt savings to finance recovery priorities; suspend all the measures that encourages the privatization of state enterprises and natural resources that prioritize profit over public wellbeing.

– Reject currency devaluation Devaluation A lowering of the exchange rate of one currency as regards others. , interest rate hikes (15.5% benchmark), public wage/employment limits that compound disaster vulnerability.

– Conduct a public audit of IMF-creditor restructurings, identifying odious debt Odious Debt According to the doctrine, for a debt to be odious it must meet two conditions:
1) It must have been contracted against the interests of the Nation, or against the interests of the People, or against the interests of the State.
2) Creditors cannot prove they they were unaware of how the borrowed money would be used.

We must underline that according to the doctrine of odious debt, the nature of the borrowing regime or government does not signify, since what matters is what the debt is used for. If a democratic government gets into debt against the interests of its population, the contracted debt can be called odious if it also meets the second condition. Consequently, contrary to a misleading version of the doctrine, odious debt is not only about dictatorial regimes.

(See Éric Toussaint, The Doctrine of Odious Debt : from Alexander Sack to the CADTM).

The father of the odious debt doctrine, Alexander Nahum Sack, clearly says that odious debts can be contracted by any regular government. Sack considers that a debt that is regularly incurred by a regular government can be branded as odious if the two above-mentioned conditions are met.
He adds, “once these two points are established, the burden of proof that the funds were used for the general or special needs of the State and were not of an odious character, would be upon the creditors.”

Sack defines a regular government as follows: “By a regular government is to be understood the supreme power that effectively exists within the limits of a given territory. Whether that government be monarchical (absolute or limited) or republican; whether it functions by “the grace of God” or “the will of the people”; whether it express “the will of the people” or not, of all the people or only of some; whether it be legally established or not, etc., none of that is relevant to the problem we are concerned with.”

So clearly for Sack, all regular governments, whether despotic or democratic, in one guise or another, can incur odious debts. from projects bypassing safeguards, calibrated against Cyclone Ditwah L&D framework.

– Regain sovereignty over the domestic economy by introducing democratic control over the Central Bank Central Bank The establishment which in a given State is in charge of issuing bank notes and controlling the volume of currency and credit. In France, it is the Banque de France which assumes this role under the auspices of the European Central Bank (see ECB) while in the UK it is the Bank of England.

ECB : http://www.bankofengland.co.uk/Pages/home.aspx of Sri Lanka.

Ensure that the rebuilding programmes implemented after the cyclone disaster has a strong component of peoples’ participation and consultation, along with monitoring by important independent state bodies such as the Human Rights Commission and Women’s Commission, and most importantly is not handed over to big corporations to administer.

– Restructure the Sri Lankan economy by placing the interests of small food producers, workers, women, children and the ecology at the core.

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Organizations

1. Adayaalam Centre for Policy Research
2. All Ceylon Telecommunications Employees Union
3. Ampara District Alliance for Land Rights (ADALR)
4. Centre for Environmental Justice
5. Christian Workers Fellowship (CWF)
6. Climate Action Now Sri Lanka
7. Collective for Historical Dialogue & Memory
8. Dabindu Collective
9. EQUAL GROUND, Sri Lanka
10. Families of the Disappeared
11. Federation of Media Employees Trade Unions
12. FIAN Sri Lanka
13. Gami Seva Sevana (GSS)
14. Human Elevation Organization (HEO)Institute of Political Economy
15. Law and Society Trust
16. LOAM – Lanka Organic Agricultural Movement
17. Mannar Women’s Development Federation
18. Movement for Land and Agriculture Reforms (MONLAR)
19. Movement for the Defence of Democratic Rights (MDDR)
20. Movement of Christian Women’s Voice (MoCWV)
21. Muslim Women Development Trust
22. National Fisheries Solidarity Movement (NAFSO)
23. NGO National Action Front
24. People’s Alliance for Right to Land (PARL)
25. Praja Abhilasha Network
26. Revaluatory Existence for Human Development ( RED)
27. Scaling Up Nutrition People’s Forum
28. Shramabhimani Kendraya
29. Social Scientists’ Association
30. STANDUP Movement Lanka
31. Strategic Inspirations (Pvt) Ltd
32. Suriya Women’s Development Centre
33. The Biodiversity Project
34. Vikalpani National Women’s Federation
35. Voice of Plantation People
36. Women’s Action Network
37. Young Women’s Christian Association (YWCA)

Individuals

1. Anushaya Collure
2. Anushka Kahandagamage, Postdoctoral fellow at Harvard Divinity School
3. Ashila Dandeniya
4. B.Gowthaman
5. Balasingham Skanthakumar, Polity
6. Brito Fernando, Human rights activist
7. Buwanaka Perera
8. Chandima Jayawardana
9. Chintaka Rajapakse
10. Chulani Kodikara, Independent Researcher
11. Crystal Baines, Social Scientists’ Association
12. D.A. Wasantha Pushpa Kumara
13. Deekshya Illangasinghe
14. Dr. Amali Wedagedara
15. Dr. Mahendran Thiruvarangan, University of Jaffna
16. Dr. Sepali Kottegoda
17. Dr. Tanuja Thurairajah
18. Duleeka Nonis
19. Ermiza Tegal, Attorney at Law
20. Gunawathie Hewagallage
21. Hasini Lecamwasam, University of Peradeniya
22. Indika Arulingam (PhD student, London School of Economics and Political Science)
23. Jacintha Subasinghe
24. Jenny Parameshwaran
25. K. Nihal Ahamed
26. Kasumi Ranasinghearchchige
27. Kaushalya Navaratne
28. Krishna Velupillai
29. Lakshman Gunasekara, Journalist
30. Lionel Bopage, Melbourne, Australi
31. Madhulika Gunawardena
32. Mansha Peiris
33. Mareen Srinika, Human rights activist
34. Melani Gunathilaka
35. Melani Manel Perera – Journalist
36. Nadheesha Hanwella
37. Nagulan Nesiah
38. Nigel Nugawela
39. Nilmini Nonis
40. Nimal I. Perera
41. Nisha Perera
42. Niyanthini Kadirgamar
43. Pasan Jayasinghe
44. Prof. Shamala Kumar
45. Rev Andrew Devadason, Clergy, Anglican church, Diocese of Colombo
46. Rohini Hensman, writer and independent scholar
47. Rosanna Flamer-Caldera
48. Rosita Fernando
49. Roy Rodrigo
50. Ruki Fernando
51. S.Sivagurunathan
52. Sahan Weerawardana
53. Sandun Thudugala
54. Sarah Arumugam
55. Shirani Cooray
56. Shivanthika Perera
57. Shreen Saroor – Human rights activist
58. Sister Berni De Silva
59. Sister Chrishanthi Basil
60. Sister Damitha De Silva
61. Sister Deepa Fernando
62. Sister Marian Evuesta
63. Sister Shamindani Fernando
64. Sister Shandika Perera
65. Sister Sharmani Fernando
66. Sister Shiromi Fernando
67. Sister Sujeewa Gunatilake
68. Sister Sumalki Fernando
69. Sivamohan Sumathy
70. Sujatha Perera
71. Vasuki Jeyasankar, Batticaloa,
72. Visakha Tillekeratne
73. Wasantha Dissanayake