Committee for the Abolition of Illegitimate Debt

An agreement on USD287 billion per year of financial support by 2035 for so-called developing countries

In a situation of climate emergency in which limiting global warming to 1.5 degrees has already become impossible, the final agreement reached at COP 29 - 287 billion dollars per year by 2035 - falls far short of the expectations of the countries of the South, which were calling for between 500 (G77 = China) and 1,300 billion dollars (Africa group). By way of comparison, in 2022, the global South, excluding China, paid around 375 billion dollars to service its public debt (repayments, 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. , penalties, etc.). At a time when climate disasters have been multiplying for several years (floods in Pakistan in 2022, drought in Ghana in 2024, floods in East Africa, Valencia in Spain, severe drought in the Sahel, forest fires in Greece, Canada, Ecuador, Brazil, etc.), this agreement once again demonstrates the extreme hypocrisy of Northern governments.

The CADTM international network condemns

• the instrumentalization of the COPs by governments that serve multinational corporations linked to fossil fuels and that have no intention of giving them up (United Arab Emirates in 2023, Azerbaijan in 2024). They are using the COPs to slow down the ecological transition and to grab land as part of the false solutions of green capitalism (see next point);
• the false solutions of green capitalism, which consist in using the climate crisis to generate more and more profits and grab lands that actually belong to peoples of the South. For instance, the COP28 led to grabbing of millions of hectares of forest in Zimbabwe, Liberia, Zambia and Tanzania by Blue Carbon, a company set up by the United Arab Emirates just before the COP. Blue Carbon does not shy away from excluding local communities in order to ’preserve these lands’, and will receive money from large polluting companies for exceeding their carbon credits. In conclusion, the big companies are continuing to pollute, they are simply paying other big companies that are capitalizing on the issue of climate change by ’preserving’ land (in this case forests) that they are taking over by excluding local populations.

• The cowardice of Northern governments, who owe compensations to countries of the South for the ecological debt they are responsible for, for decades of colonialism and enduring neocolonialism via their corporations that are still looting resources with the local ruling classes aiding and abetting, thus consolidating the exploitation of the South by the North, notably through debt as neocolonial tool.

The CADTM International network calls for the following measures:

• Audits of the debt with citizens’ participation have to be set up in order to repudiate all odious and illegitimate debts
• Governments of the South must not wait for compensations from the North, but repudiate their illegitimate public debts and use the saved money to invest in the ecological bifurcation, in education, in health care, etc.
• Public aid to development in its present for is mainly an instrument of domination to the benefice of countries of the North and must be replaced by an unconditional ‘Compensation and Solidarity Contribution’ in the forms of grants that do not include debt cancellations or any expenditure that does not serve the interests of peoples in the South. This contribution must represent at least 1% of the GNP Gross National Product
  GNP The GNP represents the wealth produced by a nation, as opposed to a given territory. It includes the revenue of citizens of the nation living abroad. of industrialized countries.
• Agreements 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 and the WB 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.
  
  must be called off and new international financial institutions that are truly democratic must be created.
• A new financial discipline should be implemented by restoring strict controls on the movement of capital and goods, taxing capital (global taxes, taxes on large fortunes), lifting banking secrecy, banning tax havens, speculation and usury.
• Free-trade agreements must be denounced as they contribute to the destruction of biodiversity and to climate change.
• The energy sector must be socialized under monitoring of local communities so as to guarantee a fair transition from fossil to renewable sources of energy in which people and non human nature are respected.
• Since current industrial agriculture greatly contributes to climate change and is a major consumer of chemical inputs responsible for the decline in biodiversity, it has to be replaced by farming activities that are compatible with the fight against the ecological crisis, in particular by promoting short distribution channels and producing according to an agro-ecological model.
• The right of free movement and establishment of persons must be guaranteed.
• Social reproduction activities must be socialized through the development of free public services publics of good quality (education, health care, culture, transport, etc.).
• Air and road transport must be radically reduced to be replaced by collective transport on rail.
• A large programme aiming at providing decent, affordable and environmental-friendly lodgings for all must be financed.

Translated by Christine Pagnoulle.