Committee for the Abolition of Illegitimate Debt

Once again, it has taken a disaster of massive proportions to highlight and remind the world of the intense vulnerabilities that people living in impoverishment and deprivation bear. Nearly 8,000 have died because of the first earthquake alone, and many more are missing, injured, starving and homeless.

One of the Least Developed Countries Least Developed Countries
LDC A notion defined by the UN on the following criteria: low per capita income, poor human resources and little diversification in the economy. The list includes 49 countries at present, the most recent addition being Senegal in July 2000. 30 years ago there were only 25 LDC. , Nepal ranks close to the bottom of the UN’s Human Development Index, 145^th out of 187 countries. The slight improvement from 2014 means that the little gains made have but all been wiped out by the quake. Nepal is one of many countries in Asia where over a billion people are known to be living barely above the extreme poverty line between US$1.25 to US$2.50 a day. Already under several layers of socio-economic deprivations, they are at great risk of regressing into deeper impoverishment than before in the face of catastrophe and crises.

In 2013 alone, Nepal had to pay US$213 million to creditors as part of servicing a US$3.8 billion foreign debt that apparently has done little to lift the Nepalese people out of poverty. Among its creditors are 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.

and the Asian Development Bank, whose lending has only gone into projects that have displaced communities, damaged the environment, privileged private sector investments in social services and kept the Nepalese people in conditions of economic dependence on debt and aid. ADB’s “concessional” lending for water projects, for instance, has been passed on several times from the central to the local government, with 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. increasing at every turn.

The devastation in Nepal supposedly passes for access to the International Monetary Fund 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 ’s Catastrophe Containment and Relief Trust. Granting that this may alleviate the Nepalese people’s suffering, the depravity of having distressed peoples “qualify” for relief should be pointed out. If relief is to be substantive, the IMF should immediately and unconditionally cancel the US$10 million that will fall due for Nepal in 2015 as well as the entire amount of the principal.

If anything, the IMF continues to bring devastation across the Asian region with increasing fiscal conditionalities implemented through client states. These have ranged from the imposition of consumption taxes that unfairly burden the poor, to slashing public spending, public sector layoffs, privatization of social services and other forms of economic restructuring. The tragic consequences of more acute poverty and inequality, and the widespread violations of human rights today, are all too real for the peoples of the South.

We call for the immediate, total and unconditional cancellation of all debts claimed from Nepal – multilateral, bilateral and commercial – by all lenders including international financial institutions, governments and their development finance institutions, and private and commercial banks and investors.

We stand in solidarity with Nepal in these critical moments, committing our resolve and collective efforts as peoples’ organizations and social movements to help mobilize immediate aid and pursue the struggle towards building equitable, humane and sustainable societies.

INITIAL SIGNATORIES:

Regional and International Movements and Networks

Asian Peoples’ Movement on Debt and Development (of the Jubilee South network)
LDC [Least Developed Countries] Watch
Migrant Forum in Asia
South Asia Alliance for Poverty Eradication (SAAPE)
CADTM International

Bangladesh

Bangladesh Krishok Federation [Bangladesh Peasant Federation]
Coastal Association for Social Transformation Trust (COAST)–Bangladesh
Equity Equity The capital put into an enterprise by the shareholders. Not to be confused with ’hard capital’ or ’unsecured debt’. and Justice Working Group (EquityBD)–Bangladesh
​Sushasoner Jonny Procharavizan (SUPRO) Bangladesh
Community Development Library–Bangladesh
Jatiyo Sramik Jote–Bangladesh
Society of Development and Education for Small Households (SoDESH)–Satkhira, Bangladesh
Voices for Interactive Choice and Empowerment (VOICE)–Bangladesh

India

Environics Trust
Indian Social Action Forum (INSAF)
Nadi Ghati Morcha–India

Indonesia

Aksi! – For Gender, Social and Ecological Justice
Koalisi Rakyat untuk Hak Atas Air (KRuHA) [People’s Coalition for the Right to Water]–Indonesia
debtWATCH Indonesia
Solidaritas Perempuan [Women’s Solidarity]–Indonesia

Malaysia

Monitoring Sustainability of Globalization–Malaysia

Pakistan

Pakistan Kissan Rabita Committee [Pakistan Peasants’ Coordination Committee]
Pakistan Fisherfolk Forum

Philippines

Aniban ng Manggagawa sa Agrikultura [Alliance of Agricultural Workers]–Philippines
Freedom from Debt Coalition–Philippines
KATARUNGAN–Philippines
Philippine Movement for Climate Justice
RightsNet–Philippines
Sanlakas Pilipinas
Koalisyong Pabahay ng Pilipinas

Nepal

All Nepal Women’s Alliance
Campaign for Climate Justice–Nepal
Jagaran Nepal
Right to Food Network–Nepal
Rural Reconstruction Nepal

Sri Lanka

Centre for Environmental Justice/Friends of the Earth Sri Lanka

Source: http://www.apmdd.org/our-programs/global-and-public-finance/statements/288-total-and-unconditional-debt-cancellation-for-nepal