Committee for the Abolition of Illegitimate Debt

The most important element in the political, economic and social situation in Latin America and the Caribbean, is the capitalist offensive. However, there are countries where often important mobilisations and even large-scale social explosions take place. The huge popular uprisings that have shaken different Latin American countries: Chile, Ecuador, Peru, Haiti, Colombia, among others, express healthy new airs and a much sharper context of class struggle. Therefore, the central question is how will people respond to this offensive of capital on labour, nature and society (and here we refer to the culture of consumerism, waste, individualism...). We can say that Latin America and the Caribbean is a territory in dispute.

In this context, super-exploitation, precariousness and the atomisation of the working class are gaining ground. Harsh working conditions, the decline in purchasing power, the rise in unemployment, the increase in feminised reproductive work.

It is also necessary to mention private debts, household debts: one of the results of the rise in 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. is the increase in household indebtedness. This process of increasing household debt is based on unemployment and the rise in 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.

 A political first approach

This leads us to characterise those countries where right-wing processes and a clear alignment with the US prevail: Colombia, Chile (till the elections of 19 December 2021), Ecuador, Brazil, Uruguay, Paraguay, Haiti, Guatemala...

Haiti deserves a special mention, as in recent years, it has been characterised by a tremendous political and institutional crisis caused by Washington’s imposition of the extreme right-wing PHTK, which accelerated the process of the gansterisation of the political system, eliminating any possibility of building political legitimacy.

On the other hand, there are those countries or complex & contradictory processes where alignment with US foreign policy does not necessarily stand out. Within the framework of these contradictory processes, a clear example is Argentina, where the government has made some social and democratic concessions, which differentiate it from the previous right-wing government (Mauricio Macri), with the approval of the Voluntary Interruption of Pregnancy Bill, One-off tax on large fortunes and, on the other hand, supporting the interference policies of the OAS (US Ministry of Colonies). Perhaps Peru can be considered to be in this group, which is in a serious quagmire, not only because of the continuous pressure from the right-wing Fujimori but also because of the government’s own continuous backtracking and ideological turnaround.

It is impossible to ignore the attempted destabilisation through significant US interference through its agencies (USAID, NED...) and military presence in Bolivia, Venezuela and, in particular, Cuba. This small island, blockaded and besieged for more than 60 years, has nevertheless managed to produce 5 vaccines against Covid19 and to send 21 “Henry Reeve” brigades to 20 countries in Europe, Latin America and the Caribbean, Africa and the Middle East in an attempt to contain the spread of the “coronavirus”.

 Socio-economic situation

The coronavirus pandemic (Covid-19) had an impact on the economies of Latin America and the Caribbean, which were already facing serious problems as a result of the world capitalist crisis and our global insertion as producers of raw materials.

The average regional contraction was 7% by 2020, according to ECLAC.

Some data in relation to the pandemic

The population of LAC is: 652,276,325. This represents 8% of the world population. The pandemic situation is serious since, out of this percentage of the population, a quarter of the deaths have been registered at a global level.

As of 31 October 2021, the majority of fatal Covid-19 cases reported in Latin America and the Caribbean occurred in Brazil. With a total of 607,824 deaths, it is the most affected in the region. Mexico has recorded 288,365 deaths due to coronavirus. Peru: 200,246 /Colombia: 127,281 /Argentina: 115,950 / Chile: 37,757 / Ecuador: 32,958 /Bolivia: 18,925 /... Cuba: 8,236 with 11,330,000 inhabitants.

The paradoxical thing in relation to the pandemic and the economic situation, is that the number of multimillionaires in the region rose by 41% and that there was a decade-long decline in poverty. In other words, income (mostly from wages) does not cover the basic food basket. Every 34 inhabitants, 13 are in extreme poverty, that is to say, not only can they not cover the basic food basket, but they cannot even afford the food basket.

Inequality is worsening. The countries with the most billionaires are Brazil (66), Mexico (14), Chile (9), Peru (6), Colombia (5), Argentina (5).

There are high inflation Inflation The cumulated rise of prices as a whole (e.g. a rise in the price of petroleum, eventually leading to a rise in salaries, then to the rise of other prices, etc.). Inflation implies a fall in the value of money since, as time goes by, larger sums are required to purchase particular items. This is the reason why corporate-driven policies seek to keep inflation down. rates in our countries. With high food and fuel prices, strongly affecting the poorest population, with large profits for the primary-export sector. It is not inflation of demand, but of the profits of the big agro-food and hydrocarbon production monopolies.

 1- Is a public debt crisis looming?

We dare to assert that in LAC the crisis is not looming, it is permanent, we only need to analyse the mechanisms of permanent extraction of our common goods Common goods In economics, common goods are characterized by being collectively owned, as opposed to either privately or publicly owned. In philosophy, the term denotes what is shared by the members of one community, whether a town or indeed all humanity, from a juridical, political or moral standpoint. (extractivism), the loss of rights and decent wages, of an insatiable and voracious system of death (capitalism) that uses the debt system as the main mechanism for the transfer of surplus-value.

For LAC the Public Debt has always been a mortgage Mortgage A loan made against property collateral. There are two sorts of mortgages:
1) the most common form where the property that the loan is used to purchase is used as the collateral;
2) a broader use of property to guarantee any loan: it is sufficient that the borrower possesses and engages the property as collateral. , a structural condition (like Free Trade).

Much more indebted are the developed countries like the USA, Japan and the central countries...

The problem is that we do not produce dollars or other currencies, that is to say, it is our situation of dependence, our mode of global insertion as producers of raw materials to obtain them.

A clear example is Argentina, with a public debt of around 323 billion dollars (around 266 billion euros), which is clearly unpayable and which exacerbates our dependence on global domination.

At this moment, the government is renegotiating with 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 gigantic loan that Macri took (2018) for 56.3 billion dollars, which became the largest in the history of the international lending agency (65% of its portfolio). However, Macri’s administration only received US$ 44.3 billion. This amount was not used for any investment, nor public works, nor to “stabilise the economy”. It was a proven speculative manœuvre, with capital flight. The current government has denounced those locally responsible for the fraud before the judiciary. But, on the other hand, it negotiates the terms and conditions of payment, without questioning its legitimacy. Nor does it publish all 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 ’s research that would expose the beneficiaries of this scam.

This debt is not only illegitimate, illegal and odious, it is also unpayable (unsustainable), even if it is paid over 10, 20 or more years.

There are many myths to demystify: What happens if there is a default? Nothing. We have already been in this situation several times, remember 2001/2002. The unfortunate thing is that an excellent opportunity was missed (when we renegotiated with private creditors) without using international legal arguments such as the State of Necessity; Fundamental Change of Circumstances; Force Majeure. In addition, the suspension of payments and Debt Audit with citizens’ participation, a demand that we carry forward from the Autoconvocatoria constituted by more than 400 organizations and social movements of which we are part, such as ATTAC – CADTM.https://autoconvocatoriadeuda.blogspot.com/

  2- What are the main struggles underway in LAC?

There is not just one struggle, there are several and they must all be articulated: the environmental struggles, against the agribusiness model, the feminist struggles that have also become very important in our countries, for LGBTIQA+ rights, against patriarchy, against current neo-colonial mechanisms, for health and education, both “human rights”, for sovereignty: food, energy, etc. .... In the Descam Platform, Uruguay, PAPDA of Haiti, in Attac - CADTM Argentina we are not many but we try to articulate locally and regionally, with anti-imperialist and anti-capitalist positions, internationalist in solidarity and respectful of the movements, dynamics, processes of other peoples, who fight for emancipation and with a socialist horizon.

In Brazil, there’s an excellent platform of more than 20 years: The Auditoria Cidadã da Dívida (Citizen Debt Audit) that continues the struggle for the audit of the public debt, against illegitimate debt schemes such as the “Securitization of Public Credits”; the daily remuneration to the banks by the Central Bank; against the “Administrative Reform” that can end social rights as a State obligation, among several other measures that increase the privilege of the financial sector. https://auditoriacidada.org.br/

 3- Are there any victories or major defeats?

There are processes in Nuestra América that show what popular struggle means, for example, Chile, which achieved nothing less than a Constituent Convention, whose president is the indigenous academic Elisa Loncón. There was also the election on 19 December of the young President Boric who was supported by the left against the far-right candidate Kats. Another important electoral victory of the left took place in Honduras.

On the other hand, it is worth mentioning that in Uruguay, in December 2021, a referendum will be held to repeal the neoliberal Law 19.899 (Law of Urgent Consideration - LUC), and collect signatures, as required by the Constitution, to reach that point is a fundamental social and political task.

The defeats in Uruguay and other countries lead us to a fundamental political reflection: the class conciliation of the social democratic governments and the leadership of the majority trade union sectors did not dare to take further steps, they stopped thinking and talking about socialism, about the class struggle. Therefore, political and trade union sectors define themselves as progressive or democratic, but not as anti-capitalist and anti-imperialist.

Another example is Brazil, which in recent years, with the Bolsonaro government, suffers from the introduction of a limit on social spending for the next 20 years, Pension and Labour Reforms; the “Autonomy” of the Central Bank; the inclusion of fiscal adjustment in the Federal Constitution (EC 109); among several other measures that have been approved by the National Congress, taking advantage of its virtual functioning and, given the difficulty of social mobilisation. However, Brazil’s Auditoria Cidadã da Dívida (Citizen Debt Audit) has managed to avoid, at least until now, the total legalisation of the “Securitisation” scheme of public credit.

In general, our great victory has been the dissemination, awareness-raising and articulation of the popular camp in relation to these issues, especially through work in social networks.

 4- Are there struggles against illegitimate debt (public and/or private)?

They exist, but there are not enough of them, nor is the issue gripped by the vast majority of the population (workers, teachers, unemployed, young people, pensioners). We are currently observing that with the crisis, there is a greater sensitivity to the issue. In Argentina, the struggle against the IMF has been established, starting with the struggle and the constitution of the Autoconvocatoria.

Brazil: Yes. On the continent, the Auditoria Cidadã da Dívida (Citizen Debt Audit) in Brazil is one of the main references in the struggle against illegitimate debt, including “private” foreign debt, whose agents always depend on government aid. There are hundreds of entities that are with us in this struggle, however, there are also powerful sectors (financial capital, big newspapers) that always try to say that it is okay to pay the debt without auditing.

 5- What are the main initiatives carried out by the different member organisations of the CADTM network?

In recent years, we have tried to focus our energies (since we do not have the financial resources) on public awareness (universities and teacher training centres). We aim to take the issue to homes, families, schools, high schools and universities, and then to reach a wider audience: social and popular organisations and movements.

We have tried to maintain mobilisation, even in times of pandemics. In addition, work has been done on organising virtual conferences and debates, disseminating studies and materials, lobbying parliamentarians and various other activities. https://autoconvocatoriadeuda.blogspot.com/2020/
“We are creditors” - a graphic compendium of the People’s Debt and IMF Trial
https://autoconvocatoriadeuda.blogspot.com/2020/12/gran-jornada-nacional-de-proclamacion.html

 6- Are there any continental initiatives or initiatives involving several organisations in the same region?

Through various tools, alliances were made with other organisations, through seminars and/or congresses.