Committee for the Abolition of Illegitimate Debt

While SADC governments are primarily responsible for realising the economic and social rights of their citizens, the governments of rich countries have significant legal and moral obligations to support these efforts. The report demonstrates that the scale of unrealised economic and social rights in Southern Africa remains immense. For example, the youth unemployment rate is 31%, 5.4 million people are undernourished, there are at least 617,400 new HIV infections a year, and more than 40% of the population in 12 countries do not have access to basic sanitation services.

Meanwhile, as a result of trade misinvoicing, the SADC region loses at least US$8.8 billion a year from trade-related illicit outflows. After falsely declaring the price, quantity or quality of a good or service on an invoice submitted to customs, criminals can use intermediaries in secrecy jurisdictions to capture and divert illicit profits to offshore accounts. The report estimates that South Africa alone is drained of at least US$5.9 billion a year due to trade-related illicit outflows.

The SADC region is losing even more – at least US$21.1 billion a year – from external government debt payments. The external debts of governments are not necessarily problematic for their citizens. But some of the region’s external public debt is illegal, some is odious, and some is illegitimate. The report calculates that Angola alone is drained of US$12.1 billion a year in principal and 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. payments on public debt. Moreover, Southern Africa, parts of which were devastated by Cyclones Idai and Kenneth earlier this year, is owed major climate debts by rich countries.

Multilateral institutions dominated by rich countries, such as the Organisation for Economic Co-operation and Development OECD
Organisation for Economic Co-operation and Development OECD: the Organisation for Economic Co-operation and Development, created in 1960. It includes the major industrialized countries and has 34 members as of January 2016.

http://www.oecd.org/about/membersandpartners/ (OECD) and the G20 G20 The Group of Twenty (G20 or G-20) is a group made up of nineteen countries and the European Union whose ministers, central-bank directors and heads of state meet regularly. It was created in 1999 after the series of financial crises in the 1990s. Its aim is to encourage international consultation on the principle of broadening dialogue in keeping with the growing economic importance of a certain number of countries. Its members are Argentina, Australia, Brazil, Canada, China, France, Germany, Italy, India, Indonesia, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, USA, UK and the European Union (represented by the presidents of the Council and of the European Central Bank). , have raised concerns about trade misinvoicing and debt in poorer countries. Yet progress on tackling trade misinvoicing is fragmented and slow, and virtually nothing has been achieved to ensure debt justice.

Sunit Bagree, ACTSA’s Senior Campaigns Officer and author of the report, said: “It’s a scandal that rich countries barely seem to care Care Le concept de « care work » (travail de soin) fait référence à un ensemble de pratiques matérielles et psychologiques destinées à apporter une réponse concrète aux besoins des autres et d’une communauté (dont des écosystèmes). On préfère le concept de care à celui de travail « domestique » ou de « reproduction » car il intègre les dimensions émotionnelles et psychologiques (charge mentale, affection, soutien), et il ne se limite pas aux aspects « privés » et gratuit en englobant également les activités rémunérées nécessaires à la reproduction de la vie humaine. that Southern Africa is haemorrhaging money. A broken international economic system is, fundamentally, why trade misinvoicing and unjust debt are depriving SADC governments of massive funds that they could use to realise economic and social rights for the many people living in poverty in the region. SADC governments can certainly do more, for example by employing innovative tools to detect potential misinvoicing of trade transactions and organising comprehensive public debt audits. But they must also call out powerful international countries for failing to live up to their responsibilities and turning their collective backs on vulnerable people in Southern Africa.”

The full report can be downloaded here.

General media enquiries: Millie Martin, ACTSA Communications & Events Officer, millie.martin at actsa.org / +44 (0)7590 487503

Further comment and interviews:

• Journalists in the UK, Europe and North America should contact Michael Buraimoh, ACTSA Director, michael.buraimoh at actsa.org / +44 (0)7487 511137
• Journalists in Tanzania and elsewhere in Africa should contact Sunit Bagree, ACTSA Senior Campaigns Officer, sunit.bagree at actsa.org / +44 (0)7415 289712

Notes

1. Formed in 1994, Action for Southern Africa (ACTSA) is the successor organisation to the Anti-Apartheid Movement. For more information see www.actsa.org
2. The Southern African Development Community (SADC) has 16 member states. The SADC Summit is taking place on 17 August 2019 in Dar es Salaam. For more information see www.sadc.int
3. International human rights treaties, including those that enshrine economic and social rights, are legally binding. States’ economic and social rights obligations extend beyond their borders.
4. Trade misinvoicing involves the deliberate falsification of the value, volume, and/or type of commodity in an international commercial transaction of goods or services by at least one party to the transaction.
5. 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. exists when the creditor is (or should be) aware that the proceeds of the loan would be used to oppress the population of the debtor state or would be used for personal enrichment rather than public purposes. Illegitimate debt exists when the amount and/or the terms of a loan put an undue burden on a country. Climate debts are owed to SADC countries by rich countries due to the latter’s responsibility for (first) the damage caused by climate change and (second) excessive historical and current emissions which limits SADC countries’ available atmospheric space.