Committee for the Abolition of Illegitimate Debt

The list of governments resulting from military coups supported by the World Bank 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.

is an impressive one [1]].

Among the better known examples are the dictatorship of the Shah of Iran after the overthrow of Prime Minister Mohammed Mossadegh in 1953; the military dictatorship in Guatemala put in place by the USA after the 1954 overthrow of the progressive government of democratically elected president Jacobo Árbenz; that of the Duvaliers in Haiti beginning in 1957; the dictatorship of General Park Chung-hee in South Korea from 1961; the dictatorship of the Brazilian generals starting in 1964; of Mobutu in the Congo (Zaire) and Suharto in Indonesia beginning in 1965; the military dictatorship in Thailand starting in 1966; the regimes of Idi Amin Dada in Uganda and General Hugo Banzer in Bolivia in 1971; the rule of Ferdinand Marcos in the Philippines beginning in 1972; those of Augusto Pinochet in Chile, the Uruguayan generals, and Juvénal Habyarimana in Rwanda starting in 1973; the junta in Argentina from 1976; the Arap Moi regime in Kenya starting in 1978; the dictatorship in Pakistan from 1978; Saddam Hussein’s coup in 1979; the military dictatorship in Turkey starting in 1980; Ben Ali’s in Tunisia from 1987 to 2011, Mubarak’s in Egypt from 1981 to 2011, and in Chad that of Idriss Déby from 1990 until his death on 20 April 2021. Déby’s son Mahamat Idriss Déby succeeded him and also enjoys the support of the World Bank.

Among the other dictatorships supported by the World Bank, we should also mention Somoza’s in Nicaragua until his fall in 1979 and Ceaușescu’s in Romania.

Some are still in place today as this is written, such as Abdel-Fattah el-Sissi’s regime in Egypt, and many others.

Neither should we forget the Bank’s support for dictatorships in Europe – Franco’s in Spain and Salazar’s in Portugal.

Very clearly, the World Bank has methodically supported despotic regimes – whether or not they came into power via coups – who conduct or conducted antisocial policies and commit crimes against humanity. The Bank has shown a total lack of respect for the constitutional principles of some of its member countries. It has never hesitated to support criminal military putschists who are economically docile at the expense of democratic, but less submissive, governments. And with good reason: the World Bank does not consider respect for human rights to be part of its mission.

The World Bank’s support for the apartheid regime in South Africa from 1951 until 1968 must not be forgotten. The Bank explicitly refused to apply a resolution of the General Assembly of the United Nations adopted in 1964 (see Chapter 3), which required all the agencies of the UN to cease financial support for South Africa because the country was in violation of the Charter of the United Nations. That support, and the violation of international law it implies, must not go unpunished.
Lastly, as shall be seen in these pages, during the 1950s and 1960s the World Bank systematically granted loans to colonial powers and their colonies for projects that increased exploitation of natural resources and of colonized peoples for the benefit of the ruling classes in the colonizer countries. It is in that context that the World Bank refused to apply a United Nations resolution adopted in 1965 calling on the Bank to refrain from supporting Portugal financially and technically until the country’s government abandoned its colonialist policies. [2]

The debts contracted with the World Bank on decision of the colonial powers by the African colonies of Belgium, Britain and France were subsequently imposed on the newly independent countries.

The World Bank’s support for dictatorial regimes takes the form of financial support as well as technical and economic assistance. That financial support and that assistance have helped these dictatorial regimes maintain power and perpetrate their crimes. The World Bank has also contributed to seeing to it that these regimes are not isolated on the international scene, since the loans and technical assistance have always facilitated relations with private banks and transnational companies. The neoliberal model was gradually imposed in the world beginning with the dictatorship of Augusto Pinochet in 1973 in Chile and Ferdinand Marcos in the Philippines in 1972. Both regimes were actively supported by the World Bank. Each time such dictatorial regimes have come to an end, the World Bank has systematically required any democratic government that succeeds them to take on the burden of the debts contracted by their predecessors. In other words, the Bank’s financial complicity with dictatorships is transformed into a burden for the respective peoples. And those peoples are forced to continue paying, even today, for the weapons purchased by the dictators and used to oppress them.

In the 1980s and 1990s, and again in a second wave between 2011 and 2020, many dictatorships collapsed, some of them under the battering ram of powerful democratic movements. The regimes that replaced them have generally submitted to the policies recommended or imposed by the World Bank and 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 have continued repaying debts that are odious in nature. The neoliberal model, imposed with the aid of dictatorships, is now maintained through the yoke of debt and ongoing “structural adjustments.” This is because after the overthrow or collapse of the dictatorships, the democratic governments that replace them have continued applying policies that in fact impede attempts to implement a development model based on autonomy. The new phase of globalization that began in the 1980s at the time of the explosion of the debt crisis is generally accompanied by increased subordination of developing (Periphery) countries to the more industrialized (Core) countries, which now include China. We have also seen the emergence of new authoritarian regimes, such as in Brazil with Jair Bolsonaro (2019–2022), Jeanine Áñez (2019–2020) in Bolivia, Sebastián Piñera in Chile (2018–2022), Iván Duque in Colombia (2018–2021), Rodrigo Duterte in the Philippines (2016–2022), Nayib Bukele in El Salvador (2019–...), Dina Boluarte in Peru (2022–...), Javier Milei in Argentina (2024–...) and Sheikh Hasina in Bangladesh (2009–2024). All these governments have been or are supported by the World Bank and the IMF. Not to mention the Saudi regime, which is a pillar of both institutions.

 The hidden agenda of the Washington Consensus

Since the World Bank and the IMF first began their activities, the major decisions of the Bank and the Fund have remained aligned with the orientations of the US government via a mechanism that is both simple to understand and complex to put in place. At times, certain European governments (in particular those of the UK, France and Germany) and that of Japan have had a voice, but such cases are rare. Friction sometimes emerges between the White House and the leadership of the World Bank and IMF, but a rigorous analysis of history since the end of World War II shows that until now, the US government has always had the last word where its direct interests are concerned.

As stated, the agenda of the Washington Consensus, put in place beginning in the 1990s, is to reduce poverty through growth, the free operation of market forces, free trade, and minimum intervention by public authorities.

But the Washington Consensus has a hidden agenda: to guarantee that US dominance is maintained worldwide and to free capitalism from the limits that had been placed on it in the post-World War II period under pressure from a combination of powerful social movements both in the South and in the North, the beginnings of emancipation of certain colonized peoples and attempts at exiting from capitalism. The Washington Consensus is also bent on imposing and intensifying the productivist-extractivist model.

Over the recent decades, in the context of this Consensus, the World Bank and the IMF have strengthened their ability to exert pressure on a great many countries by taking advantage of the situation created by the debt crisis. The World Bank has developed subsidiaries (the International Finance Corporation – IFC, the Multilateral Investment Guarantee Agency – MIGA, the International Centre for Settlement of Investment Disputes – 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 6^th 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”.

https://icsid.worldbank.org/apps/ICSIDWEB/Pages/default.aspx ) as it weaves a tighter and tighter web that is more and more difficult to escape from.

An example of how this works: the World Bank grants a loan on condition that a water treatment and distribution system be privatized. As a result, the public company is sold to a private consortium among whose members just happens to be the IFC, a subsidiary of the World Bank.

When the population impacted by the privatization revolts against the drastic rate increases and the reduction in the quality of services and the public authorities seek redress from the predatory transnational, the case is entrusted to the ICSID, also a subsidiary of the Bank, which serves as both judge and jury.
The result is a situation where the World Bank Group has influence at all levels: 1) the imposition and financing of privatization (World Bank); 2) investment in the privatized company (IFC); 3) insurance and guarantees Guarantees Acts that provide a creditor with security in complement to the debtor’s commitment. A distinction is made between real guarantees (lien, pledge, mortgage, prior charge) and personal guarantees (surety, aval, letter of intent, independent guarantee). for that company (MIGA); 4) arbitration of disputes (ICSID).

And that is exactly what happened in 2004–2005 at El Alto in Bolivia (see Annex 1: The World Bank: an ABC at the end of this volume).

Collaboration between the World Bank and the IMF is also fundamental for exercising maximum pressure on public authorities. And to complete the process of putting the public sphere and public authorities under its control and further extending the dominance of the model, World Bank/IMF collaboration now extends to the World Trade Organization (WTO WTO
World Trade Organisation The WTO, founded on 1^st January 1995, replaced the General Agreement on Trade and Tariffs (GATT). The main innovation is that the WTO enjoys the status of an international organization. Its role is to ensure that no member States adopt any kind of protectionism whatsoever, in order to accelerate the liberalization global trading and to facilitate the strategies of the multinationals. It has an international court (the Dispute Settlement Body) which judges any alleged violations of its founding text drawn up in Marrakesh.

) since that entity’s creation in 1995.

Thus, there is a fundamental difference between the agenda proclaimed by the Washington Consensus and its hidden reality.

The hidden agenda, the one that is actually applied, is to subordinate the public and private spheres of all human societies to the capitalist imperative of seeking maximum 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. . The implementation of this hidden agenda results in reproducing poverty rather than reducing it and in increasing inequalities rather than reducing them. It results in stagnation, if not deterioration, of the living conditions of a great majority of the world’s population, concurrently with greater and greater concentration of wealth in the hands of a smaller and smaller elite. A further result is the continued deterioration of ecological balances, which means that the very future of humanity is in danger.

One of the numerous paradoxes of this hidden agenda is that in the name of ending the dictatorship of the State and liberating the forces of the market, governments – allied with transnational corporations – use the coercive action of multilateral public institutions (World Bank-IMF-WTO) to impose their model on the people.

 The way out is to make a clean break

It is for these reasons that there needs to be a radical break with the Washington Consensus and the model the World Bank applies.

The mechanism of power that is the Washington Consensus must not be understood as being a project that is limited to the government in Washington and its “infernal trio.” The European Commission, most European governments, and the Japanese government are also committed to the Washington Consensus and have translated its programme into their languages, constitutional projects and political programmes.

Breaking with the Washington Consensus, if that is limited to ending domination by the US via the World Bank–IMF–WTO troika Troika Troika: IMF, European Commission and European Central Bank, which together impose austerity measures through the conditions tied to loans to countries in difficulty.

IMF : https://www.ecb.europa.eu/home/html/index.en.html , is not an alternative, because the other major powers are ready to take the place of the US in order to pursue similar goals. Let’s imagine for a moment that the European Union might supplant the US as worldwide leader. That would not fundamentally alter the situation of the peoples of the planet because it would amount to simply replacing one Northern capitalist bloc (one pole of the Triad – that is, North America, Western Europe, and Japan) with another. In any event, the EU, like the UK, generally follows the lead of the United States. As for the bloc comprising Brazil, Russia, India, China and South Africa, referred to as BRICS BRICS The term BRICS (an acronym for Brazil, Russia, India, China and South Africa) was first used in 2001 by Jim O’Neill, then an economist at Goldman Sachs. The strong economic growth of these countries, combined with their important geopolitical position (these 5 countries bring together almost half the world’s population on 4 continents and almost a quarter of the world’s GDP) make the BRICS major players in international economic and financial activities. , it has created its own New Development Bank (NDB) whilst continuing to participate actively in the World Bank, the IMF and the WTO. The BRICS bloc, whilst in a sense being a competitor of the bloc formed by the West and Japan, conducts policies based on the same productivist-extractivist-export model as the World Bank and the IMF and on free-trade treaties, exactly like the G7 powers. The policies of the BRICS are not a real alternative. [3]]

The Washington Consensus needs to be replaced by a consensus of peoples founded on rejection of capitalism.

The very root of the concept that development is inextricably linked to the productivist model must be challenged.

Such a development model excludes any protection of cultures and their diversity; it exhausts natural resources and irremediably damages the environment. That model considers the protection of human rights to be at best a long-term goal (when in fact in the long term we will all be dead). Most often, human rights are perceived as an obstacle to growth. The productivist model considers equality an obstacle, if not a danger.

 Break the infernal spiral of indebtedness

The attempt to improve living conditions for peoples via public indebtedness is a failure. The World Bank claims that in order to develop, countries [4] must rely on external debt and attract foreign investments. The debt serves mainly to purchase equipment and consumer goods from the industrialized countries. For decades the facts have demonstrated, over and over again, that this does not lead to development.

According to the dominant economic theory, development in the South is held back by a shortage of domestic capital (that is, local savings). Still according to dominant economic theory, countries who want to launch business projects or accelerate their development must rely on external capital via three channels: first, contracting external debt; second, attracting foreign investments; third, increasing exportation to bring in the hard currency necessary for purchasing foreign goods that enable growth. The poorest countries supposedly also need to attract aid by conducting themselves in ways that gain the favour of the developed countries.

Reality contradicts that theory: in fact, the developing countries provide the capital to the industrialized countries, [5] and to the economy of the USA in particular. The World Bank said so itself in a report published in 2003: “Developing countries, in aggregate, were net lenders to developed countries.” [6]

The situation has not improved over the past twenty years... in fact it has worsened. The latest World Bank report on the debts of “developing countries,” published on December 13, 2023, [7] reveals an alarming fact: in 2022, developing countries as a whole spent a record US$ 443.5 billion to pay for their external public debt. The 75 low-income nations that are eligible for loans from the International Development Association (IDA), a World Bank organization that provides loans to the world’s poorest nations, paid a record US$ 88.9 billion to its creditors in the same year, 2022. These 75 nations have an unprecedented total external debt of US$ 1,100 billion, which is more than twice as much as it was in 2012. As per the press release from the World Bank, the nations in question experienced a 134% increase in their foreign debt between 2012 and 2022, which was greater than the 53% increase in their gross national income (GNI). According to another World Bank report quoted by the Financial Times, [8] between 2019 and 2022, over 95 million more people have fallen into extreme poverty.

If we adopt a long-term perspective and evaluate the operations of the World Bank and the IMF, which were established in 1944 – 80 years ago – we can only come to the conclusion that these two international organizations, whose purported goal was to support stable development and full employment, have entirely failed. A significant study that the IMF released in 2023 admits failure with devastating clarity. In its April 2023 World Economic Outlook, the IMF states that it will take 130 years for developing countries to halve the gap between their per capita income and that of developed countries. 130 years to halve the gap between developing countries’ per capita income and that of rich countries! This comes at a time when humanity is facing immediate, shorter-term threats to its existence, due to the ecological crisis that has reached extreme proportions. But believe it or not, in its April 2008 World Economic Outlook the IMF had estimated that it would take 80 years to close that same income gap. The conclusion is straightforward: the gap between developing and wealthy nations has grown even greater between 2008 and 2023, despite the goals set forth by the Bretton Woods institutions and the purported advantages of capitalism.

If popular political movements were able to gain governmental power in several developing countries and create their own development bank and their own international monetary fund, they would be quite able to do without the World Bank, the IMF and the private financial institutions in the highly industrialized countries.

It is not true that developing countries must resort to indebtedness to finance their development. Today, indebtedness serves essentially to continue the flow of debt repayments. Despite the existence of large foreign reserves, the governments and ruling classes of the South do not increase investments in local production and social spending.

The dominant view that sees indebtedness as an absolute need must be challenged and rejected.

Further, countries must not hesitate to cancel or repudiate odious and illegitimate debts.

 Cancel odious debts

According to the 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. doctrine formulated in 1927 by Alexander Nahum Sack (1890–1955), a debt may be considered odious if it fulfils two conditions:

1) The population does not enjoy the benefits of the loan: the debt was incurred not in the interests of the people or the State but against their 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. and/or in the personal interest of the leaders or persons holding power.
2) Lenders’ complicity: the lenders had foreknowledge, or could have had foreknowledge, that the funds concerned would not benefit the population.

According to Sack’s doctrine the democratic or despotic nature of a regime does not influence this general rule.

The father of the odious debt doctrine clearly states that “regular governments [may] incur debts that are incontestably odious.” 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. [9]

In Sack’s words, a debt may be considered odious if:

a) the purpose which the former government wanted to cover by the debt in question was odious and clearly against the interests of the population of the whole or part of the territory, and b) the creditors, at the moment of the issuance of the loan, were aware of its odious purpose.

He continues:

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. [10]

This doctrine, which has been applied several times in history by various governments, is also useful for denouncing as odious the debts whose repayment is currently being demanded of countries of the South and countries such as Greece by the World Bank and the IMF.

 Make use of legitimate loans and finance the State through socially just taxes

That being said, public indebtedness is not in itself a bad thing if it is envisaged in a radically different way than under the current system.

Public borrowing is quite legitimate if it serves legitimate projects and if those who contribute to the loan do so legitimately.

Public debt could be used to finance ambitious programmes of ecological transition instead of to enforce anti-social, extractivist, productivist policies that foster competition between nations.

Public authorities can use bond Bond A bond is a stake in a debt issued by a company or governmental body. The holder of the bond, the creditor, is entitled to interest and reimbursement of the principal. If the company is listed, the holder can also sell the bond on a stock-exchange. issues to, for example:

• finance the complete closure of thermal and nuclear power plants;
• replace fossil energies with renewable sources of energy that respect the environment;
• finance a conversion from current farming methods, which contribute to climate change and use large amounts of chemical inputs which decrease biodiversity, to methods that favour local production of organic food to make farming compatible with the fight against climate change;
• radically reduce air and road transport and develop collective transport and the use of railways;
• finance an ambitious programme of low-energy social housing;
• finance public medical research and expenditures for public health to deal with the serious health problems that affect humanity.

A government of the people will not hesitate to force big corporations (whether national, foreign or multinational), as well as richer households, to contribute to the bond issue without drawing any profit from it, i.e. with zero interest and without compensation for 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. .

At the same time, a large portion of working-class households will easily be persuaded to entrust their savings to the public authorities to fund the legitimate projects mentioned above. This voluntary funding by the working classes would be remunerated at a positive actual rate, for instance 4%. This means that if annual inflation reached 3%, the public authorities would pay a nominal interest rate of 7%, to guarantee an actual rate of 4%.

Such a mechanism would be perfectly legitimate since it would finance projects that are truly useful to society and because it would help reduce the wealth of the rich while increasing the income of the working classes.

Other measures can also be taken to finance the budget of the State in a legitimate way: obtaining credit from 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 at zero interest, establishing a tax on large fortunes and very high incomes, levying fines on companies guilty of large-scale tax evasion, recovering ill-gotten gains (biens mal acquis) –within the country and abroad – and illicit fortunes invested abroad, [11] radically reducing military expenditures, ending subsidies to banks and major corporations, increasing taxes on foreign companies, in particular in the raw-materials sector, and still more.

 Peoples will liberate themselves

In 2021, with the exception of Cuba’s, no government is raising the question of profoundly changing the rules of the game in favour of the people. The governments of China, Russia and the major developing countries (India, Brazil, Nigeria, Indonesia, Thailand, South Korea, Mexico, Algeria, South Africa, etc.) express no intention of changing, in practice, the world situation for the benefit of their peoples.
And yet, politically, if they wanted to do so, governments of the major developing countries together could constitute a powerful movement capable of imposing fundamental democratic reforms of the entire multilateral system. They could adopt a radical policy: repudiate debt and apply a set of policies that break with neoliberalism.

China has the economic power to take the initiative for a genuinely alternative direction to that of the World Bank, the IMF and the major imperialist countries, but it is not acting in that direction. [12] The rhetoric of South-South solidarity is at odds with the reality of Chinese policy over recent decades. Today it is the opposite of what happened in the 1950s and 1960s, in the era of Mao Zedong, Zhou Enlai, the non-aligned movement Non-Aligned Movement
NAM The Non-Aligned Movement is a group of countries who, beginning in the 1950s, promoted a policy of neutrality towards the blocs led by the two superpowers – the USA and the Soviet Union –, who were by then fully engaged in the Cold War. In April 1955, a conference of Asian and African countries was held in Bandoeng (Indonesia) to promote unity and independence for the Third World, decolonization and an end to racial segregation. The initiators were Tito (Yugoslavia), Nasser (Egypt), Nehru (India) and Sukarno (Indonesia). The actual birth of the Non-Aligned Movement occurred in Belgrade in 1961. Other conferences would follow in Cairo (1964), Lusaka (1970), Algiers (1973) and Colombo (1976).
The work of the Non-Aligned Movement, which includes 120 countries, has had limited impact in recent years. and the Bandung conference in Indonesia. It was a time when the Chinese government supported an orientation opposed to the capitalist system and imperialism, and strongly criticised Moscow’s strategy of peaceful coexistence. That was a long time ago and the prospect of promoting an anti-capitalist and anti-imperialist revolution was abandoned.

The overwhelming majority of current leaders of developing countries are totally caught up in the neoliberal model. In most cases, they are in full allegiance with the interests of the local ruling classes, who have no vision of actually distancing themselves from (let alone breaking with) the policies conducted by the major industrial powers, which today include China. The great majority of capitalists in the South remain within a rentier lifestyle, or at best they endeavour to increase their market shares by maximizing their exploitation of working people and of nature. That is true of the capitalists in Brazil, South Korea, China, Russia, South Africa, India, etc., who pressure their governments to obtain concessions from the industrialized countries during bilateral or multilateral trade negotiations. In addition, competition and conflicts between governments of developing countries, between capitalists in the South, are real and may exacerbate. The aggressive trade attitude of capitalists in China, Russia, India, South Africa and Brazil towards their competitors in the South causes stubborn divisions. And yet generally, they make arrangements (between themselves and between the South and the North) to impose a deterioration of the working conditions of working women and men in their countries under the pretext of increasing their competitiveness to the maximum.

But sooner or later the peoples will free themselves from the slavery of debt and oppression imposed on them by the ruling classes in the North and South. Through struggle, they will succeed in imposing policies that redistribute wealth and put an end to the productivist model that is so destructive of nature. Public authorities will then be forced to give absolute priority to guaranteeing fundamental human rights.

 Exit the vicious cycle of indebtedness without entering a politics of charity

For that to happen, an alternative approach is required: the vicious cycle of indebtedness must be ended while avoiding the trap of a politics of charity aimed only at perpetuating a worldwide system dominated entirely by capital and by a few major powers and transnational companies. The solution is to set up an international system of redistribution of revenue and wealth in order to repair the centuries of looting to which the dominated peoples of the Periphery have been and still are subjected. These reparations, in the form of donations, would not give the industrialized countries any right to interfere in the affairs of the populations receiving compensation. In the South, mechanisms for deciding and overseeing how these funds would be used need to be invented and put in the hands of the people concerned and their public authorities. That opens up a vast area of reflection and experimentation.

We should be inspired by the words of Ernesto “Che” Guevara during the Algiers conference in February 1965 [13] regarding the type of relations that should be established between developing countries, imperialist developed countries and the so-called socialist countries of that period. The conference, held in Algiers, brought together representatives of 63 African and Asian governments, as well as 19 national-liberation movements. The meeting was opened by Algeria’s president, Ahmed Ben Bella. Cuba was invited to the conference as an observer and Ernesto Che Guevara, who represented the Cuban government (in which he served as Minister for Industry), was part of the presiding committee. He stated that between countries who were supposed to be fraternal and in solidarity, there should be no question of applying worldwide capitalist market prices. Che Guevara declared: “How can it be ‘mutually beneficial’ to sell at world market prices the raw materials that cost the underdeveloped countries immeasurable sweat and suffering, and to buy at world market prices the machinery produced in today’s big automated factories? If we establish that kind of relation between the two groups of nations, we must agree that the socialist countries are, in a certain way, accomplices of imperialist exploitation.” Che Guevara was referring mainly to the bloc of countries led by Moscow.

During the conference, Che Guevara proposed cancellation of debts and argued for grants in place of loans. He said: “We could begin a new stage of a real international division of labor, based not on the history of what has been done up to now but rather on the future history of what can be done. The states in whose territories the new investments are to be made would have all the inherent rights of sovereign property over them with no payment or credit involved.” Che Guevara also affirmed: “Foreign trade should not determine policy, but should, on the contrary, be subordinated to a fraternal policy toward the peoples.”

“The states in whose territories the new investments are to be made would have all the inherent rights of sovereign property over them with no payment or credit involved.” From Che Guevara’s speech in Algiers in February 1965

One last quotation from Che’s Algiers speech: “We must advocate the establishment of new relations on an equal footing between our countries and the capitalist ones, creating a revolutionary jurisprudence to defend ourselves in case of conflict, and to give new meaning to the relations between ourselves and the rest of the world. We speak a revolutionary language and we fight honestly for the victory of that cause. But frequently we entangle ourselves in the nets of an international law created as the result of confrontations between the imperialist powers, and not by the free peoples, the just peoples, in the course of their struggles. For example, our peoples suffer the painful pressure of foreign bases established on their territories, or they have to carry the heavy burden of massive foreign debts. The story of these throwbacks is well known to all of us. Puppet governments, governments weakened by long struggles for liberation or the operation of the laws of the capitalist market, have allowed treaties that threaten our internal stability and jeopardize our future. Now is the time to throw off the yoke, to force renegotiation of oppressive foreign debts, and to force the imperialists to abandon their bases of aggression.” His proposals should again become part of the agenda of the peoples of the world.

One year before the speech in Algiers, in March 1964, at the United Nations Conference on Trade and Development UNCTAD
United Nations Conference on Trade and Development This was established in 1964, after pressure from the developing countries, to offset the GATT effects.

(UNCTAD) in Geneva, Che Guevara also made declarations that are still just as valid. Here is an excerpt:

“It is inconceivable that the underdeveloped countries, which are sustaining the vast losses inflicted by the deterioration in the terms of trade and which, through the steady drain of interest payments, have richly repaid the imperialist powers for the value of their investments, should have to bear the growing burden of indebtedness and repayment, while even more rightful demands go unheeded.

The Cuban delegation proposes that [...] all payments of dividends, interest, and amortization should be suspended.”  [14]

This speech by Che Guevara is as important today as it was when it was given in Geneva sixty years ago.

 Abolish the World Bank and the IMF and replace them with radically different multilateral institutions

The mobilization of farmers and fishermen in Gujarat (western India) who are victims of the environmental and social effects of a coal-fired power plant financed by the International Finance Corporation (IFC), whose role within the World Bank Group is to finance private companies, led to an important ruling of the Supreme Court of the USA on 27 February 2019. [15]

The justices ruled that the International Finance Corporation (IFC) is no longer entitled to the immunity given international organizations when financing commercial activities. [16] This shows that popular action can get results.

We need to go farther and abolish the World Bank and the IMF and replace them with other international institutions that operate democratically. The new world bank and the new international monetary fund – whatever names they might be given – must have missions that are radically different from their predecessors’. They must guarantee adherence to international treaties on human rights (political, civil, social, economic and cultural) in the sphere of international credit and international monetary relations. These new worldwide institutions must be part of a worldwide institutional system overseen by a radically reformed United Nations. It is essential, and must be a priority, that developing countries associate to create regional entities with a shared bank and monetary fund as soon as possible. During the crisis in Southeast Asia and Korea in 1997–1998, the creation of an Asian monetary fund had been envisaged by the countries concerned. The discussion was aborted following intervention by Washington. A lack of determination on the part of the governments concerned did the rest. In South America, under the leadership of the government of Hugo Chávez, the foundations of a Bank of the South were laid in 2008, but in the end the project did not become reality. [17] In 2007–2009, the government of Ecuador stood up to its creditors and won a victory, but the other governments of the Left in the region did not follow.

 Restore health systems that the World Bank and the IMF have contributed to weakening, as the CoViD-19 pandemic has shown

In 2020, the worldwide health crisis caused by the CoViD-19 pandemic has shown the extent to which the policies dictated by the World Bank/IMF and applied by governments have deteriorated public health services and allowed the disease to ravage populations. If governments had rejected the Washington Consensus and neoliberalism and strengthened the essential instruments of a sound public-health policy regarding personnel employed, infrastructures, stocks of medicines, equipment, research, production of medicines and treatments and health coverage for populations, the coronavirus crisis would not have reached the proportions it has.

If governments had broken with the logic of austerity of the World Bank and the IMF, a radical increase in expenditures for public health would have also had highly beneficial effects on the fight against other diseases that mainly affect countries of the Global South.

Instead, today, many States devote more resources to debt repayment than to health.

According to the World Malaria Report, published in December 2019, 228 million cases of malaria were detected in 2018 and the number of deaths from the disease was estimated at 405,000. [18] Tuberculosis, meanwhile, is one of the ten leading causes of death in the world. In 2018, ten million persons contracted tuberculosis and one million died from it (including 251,000 HIV-positive individuals). These diseases could be fought successfully if only governments would allocate the necessary resources.

Additional measures could successfully fight the malnutrition and hunger that are destroying the daily lives of one out of ten human beings (more than 800 million inhabitants of the planet). Approximately 2.5 million children die each year around the world of malnutrition, either directly or from diseases related to reduced immunity due to malnutrition.

Similarly, if investments were made to massively increase supplies of clean water and wastewater removal and treatment, the number of deaths from diarrhoeal diseases, which is as high as 430,000 per year (source: WHO 2019), would be reduced radically.

Whereas the illegitimate debts populations are being forced to repay should simply be cancelled, the World Bank, the IMF and the majority of government leaders mention only postponement and new formulas for further indebtedness. CoViD-19 has been used as a pretext for reinforcing yet another cycle of massive indebtedness with conditions that ramp up austerity even more and compromise the well-being of future generations.

 Immediately suspend repayment of public debts while conducting a debt audit with citizen participation in order to cancel illegitimate debt

An immediate suspension of the repayment of public debts must be combined with an audit of the debts with citizen participation in order to identify the portions that are illegitimate and cancel them.

One thing must be clear: if populations are to be emancipated and guaranteed their rights as humans, the new financial and monetary institutions, both regional and international, must be at the service of a social project that breaks with neoliberalism, extractivism, productivism… in other words, with capitalism.

As much as possible must be done so that a new and powerful social and political movement can assist in the convergence of social struggles and contribute to working out a programme for breaking with capitalism by promoting anticapitalist, antiracist, environmentalist, feminist, internationalist and socialist solutions.

It is of fundamental importance to work toward the socialization of banks with expropriation of their major shareholders; suspension of repayment of public debt until audits with citizen participation can be conducted in order to repudiate the illegitimate portion of the debts; imposition of a high crisis tax on the wealthiest individuals and entities; cancellation of illegitimate debts enforced against the working classes (student debt, abusive 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. debts, abusive micro-credits, etc.); closing down of stock and security exchanges, which enable speculation; radical reduction of working hours (with wages maintained) in order to create a large number of socially useful jobs; a radical increase in public expenditures for health and education; socialization of pharmaceutical companies and the energy sector; relocation of as much production as possible and development of short supply circuits; and many more essential demands.

Translated by Snake Arbusto