Final statement

Regional Workshop On The Illegitimacy Of Debt

3 September 2007

Quito, Ecuador, August 17-19, 2007

The peoples of the South, creditors of the social, historical, cultural and ecological debt, are watching with hope and joy the new historical moment faced by Ecuador. The government has taken an unprecedented step forward in proclaiming its decision to carry out a comprehensive Audit of public debt, in order to determine the legitimacy of debts still claimed of the country and set into motion actions aimed at putting an end to the tyranny of debt, punishing those who were responsible for its accumulation and implementing reparatory measures.

Workshop participants from nine countries in the region agreed on congratulating the government of economist Rafael Correa on the step taken towards dignity and the reaffirmation of national sovereignty. The peoples of Ecuador are on the way to recovering full sovereignty over their territory, resources, and cultures, against the imposed mode of production which contaminates, degrades, and excludes, and the aspirations of the international banks, transnational corporations, the governments of the United States, Canada, and the European Union, and International Financial Institutions to maintain their harmful and illegitimate operations in Ecuadorian soil. Thus, Latin America and the Caribbean continue advancing to put an end to the looting and plundering of resources, and to reject foreign military presence anywhere in our continent, including Manta and the noble nation of Haiti – particularly remembered in our discussions.

We understand the fact that the unfair international structure of capitalism is unwilling to acknowledge the illegitimacy of the financial debt imposed on the exploited nations of the South, against the interests and without the consent of their peoples. Therefore, we offer our solidarity and experience to the complex task undertaken by Ecuador, which is aimed at establishing the illegitimacy of certain loans and debts and put an end to their service. However, we must also acknowledge the overwhelming evidence regarding the criminal and genocidal activities perpetrated by capitalist powers and companies. And in the light of a centuries old history of dispossession, it is indeed the peoples of Ecuador and the South as a whole, who are the true creditors and it is they – particularly the native populations – who are demanding compensation, as a condition of justice, for the real debt that has resulted mostly from the irreparable damage inflicted against life, nature, and culture.

We are certain of the fact that any legitimate financial debt has already been more than repaid, both in financial terms as well as owing to their multiple impacts. Any Audit, therefore, should seek to determine what is fairly owed to the communities and peoples. A comprehensive audit not only should be aimed at determining those who are responsible but also the corresponding costs and penalties. The grave character of the daily plundering and destruction of lands and life on Earth cannot admit any sort of impunity. Those who were responsible should be identified and they should pay. Also, processes of indebtedness that continue to lead to the accumulation of new environmental and social liabilities Liabilities The part of the balance-sheet that comprises the resources available to a company (equity provided by the partners, provisions for risks and charges, debts). should be stopped.

Consequently, we believe that the government of Ecuador will continue to take decisive steps aimed at achieving legal recognition of the illegitimacy of the system of indebtedness that is orchestrated by Northern power centers with the complicity of treacherous local elites. Likewise, we hope that governments of other Latin American countries will support this sovereign and necessary action, by launching similar Audits and taking steps to ensure that the full enforcement of human and environmental rights is granted due priority over any financial or economic transaction. In this context, we warn governments that within the new framework of integration and alliances there should be no room for development models characterized by capitalist megaprojects.

From the numerous cases analysed during our discussions – based on unobjectionable data - we have reached the following conclusions:

- The only true and legitimate debt is that owed by the North and the ruling classes to the South and the oppressed classes, as well as to nature and mother Earth.

- The so-called external debt is a mechanism, among others, aimed at the ongoing control and looting of Southern resources; it is increasingly complemented by the increase of internal debts and the potential of further indebtedness as a result of trade and investment treaties and the waiver of jurisdiction, such as for example, to 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 illegitimacy of these debts together with global capital’s failure to acknowledge its ecological, social, and historical debts form part of a comprehensive strategy including free trade, privatizations, militarization and the criminalization of social movements.

- We are committed to fortify our capacity building and mobilization in order to continue fighting for an equitable and sovereign society based on a solidarity economy, dignity, and respect for Earth, as an alternative to the capitalist neo-liberal model.

- We will move forward with the strengthening of our strategic claims, calling for the support of those social forces and entities in the North that have been allied to our cause.

- Only an alternative of social and environmental justice will be able to compensate, pay off, and provide reparations for the true debts owed to our nations by International Financial Institutions, transnational banks and companies, Northern governments, and their Southern accomplices, as part of the capitalist system.

Finally, we call upon the peoples of Ecuador and all Our America, to face the challenges of this moment with strength and unity. The success of the comprehensive Audit of the debt demanded of Ecuador, as in each of our countries, will depend on our capacity to both strengthen and conduct it as a political-pedagogic tool, by gathering the corresponding claims and accusations and mobilizing in order to make sure that the results of the investigation become true steps towards justice, non-payment, and reparations.

In that spirit, we call upon movements and debt-campaigners everywhere to take action in support of the Audit process launched in Ecuador, as well as in support of the creation of autonomous financing alternatives such as a Southern Peoples’ Solidarity Bank. In particular we encourage specific actions during the Week of Global Action against Debt and International Financial Institutions to take place all over the world next October 14-21.

We declare our support of those Central American popular movements and organizations that are demanding recognition and responsibility from European countries as regards the Ecological, Social and Historical Debt accumulated by them in the region, as a precondition for the political dialogue and negotiations proposed by that block within the framework of a Partnership Agreement. Likewise, we declare our solidarity with the people of Costa Rica in their fight to say ‘NO’ in the referendum on the Free Trade Agreement with the United States.




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