Committee for the Abolition of Illegitimate Debt

On Monday 26^th of June, the two most wealthy people in the world made the headlines together. The first one, Bill Gates, heads a charity to which the second one, Warren Buffet, promised a large share Share A unit of ownership interest in a corporation or financial asset, representing one part of the total capital stock. Its owner (a shareholder) is entitled to receive an equal distribution of any profits distributed (a dividend) and to attend shareholder meetings. of his fortune. At first sight, the generosity of these two philanthropists is good news for everyone. However one can easily feel vaguely that something is going wrong.

Bill Gates, who founded the IT transnational Microsoft, owns 50 billion dollars. This fortune was created thanks to an aggressive strategy aiming at imposing everywhere in the world an operating system [1] and very expensive software that are far from perfect. Today, those who buy a low-budget computer are caught in the Microsoft trap, and need a great deal of determination to get out of it. They join the millions of people compelled to click on the « Start » button to turn their computers off.

This is how the Bill and Melinda Gates’ charity has about 30 billion dollars at its disposal, which it devotes to the improvement of health system and the development of new technologies in poor countries. Sceptical critics point out that this development will probably include Microsoft software, thus looping the loop.

Warren Buffet’s fortune, which amounts to about 44 billion dollars, comes from more classical economic sectors such as food (cola sodas, ice cream) or insurance. As he is approaching death, this business shark promised to give 85% of his fortune to charities, including more than 30 billion dollars to the Gates’ charity. A record, through which people such as Rockefeller, Carnegie or Ford could almost be considered as small fry.

With such proper fundings, the annual budget of the Gates’ charity is going to double, reaching about 3 billion dollars. It is five times as high as the budget of the UNESCO, the United Nations Educational, Scientific and Cultural Organisation. It is almost as much as the 2006-2007 budget of the World Health Organisation (3,3 billion dollars)... Nevertheless, it will not be enough to fill in the financial gaps : each year, the governments of developing countries pay back 200 billion dollars for debt service Debt service The sum of the interests and the amortization of the capital borrowed. to rich creditors, that are probably quite generous as well.

While the amount of Buffet’s gift is exceptionally high, such announcements from rich individuals are getting more and more common. But can’t we consider that this race towards larger and larger gifts emphasizes the failure of the collective organisation of solidarity? Without any control over the use of these gifts, it is likely that, once again, visible and immediately profitable projects will be selected, without any sufficient long-term, global analysis. In fact, Bill and Melinda Gates said they were « impressed by the decision of our friend Warren Buffet to dedicate his fortune to the treatment of the most glaring inequalities in the world ». Does that mean that less glaring inequalities have to be accepted?

In our current globalised economy, the very principle of solidarity between human beings is being confiscated by a fistful of individuals, with passive complicity of the States. After having considered that they were allowed to do whatever they wanted to get rich, the best at this game can now set up the rules through which the most needy in this world can be helped. Who bothers to inquire among the poor, who are primarily concerned, what their expectations are ? Can the rich be legitimately entrusted with the fight against poverty? And incidentally is it normal that the fortune of the two richest people in the world should be four times as high as the annual official development assistance ODA
Official Development Assistance Official Development Assistance is the name given to loans granted in financially favourable conditions by the public bodies of the industrialized countries. A loan has only to be agreed at a lower rate of interest than going market rates (a concessionary loan) to be considered as aid, even if it is then repaid to the last cent by the borrowing country. Tied bilateral loans (which oblige the borrowing country to buy products or services from the lending country) and debt cancellation are also counted as part of ODA. Apart from food aid, there are three main ways of using these funds: rural development, infrastructures and non-project aid (financing budget deficits or the balance of payments). The latter increases continually. This aid is made “conditional” upon reduction of the public deficit, privatization, environmental “good behaviour”, care of the very poor, democratization, etc. These conditions are laid down by the main governments of the North, the World Bank and the IMF. The aid goes through three channels: multilateral aid, bilateral aid and the NGOs. of rich countries to the 50 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. ?

States’ responsibility is clearly involved because neoliberal politics they have been applying since the 1980s sabotage any welfare system: governments give up their role as a guarantee for common well-being and social justice. In France, initiatives such as « le Téléthon », « l’Opération pièces jaunes » or « les Restos du cœur » are replacing the State in this field, leaving the financial effort for solidarity to a compassionate population. One of these operations is even organised by the President’s wife, thus revealing the duplicity of the political power...

The reasons why Gates and Buffet have managed to get rich, and, as a consequence, to seem infinitely generous, are the very reasons that have placed billions of human begins within poverty and need. The search for maximal 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. has led the world into a dead end. With the reduction of the States’ role and the rise of all-powerful private donors, the poorer are going to be compelled to count on the generosity of protecting lords or perish, as was the case during the Middle-Age. This unacceptable retreat is orchestrated from the wings by the debt system, a subtle instrument of oppression, which organises a huge transfer of wealth from the Southern populations towards creditors, as well as a transfer of the decision-making process to 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 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.

, the great powers and transnational corporations. In order to put an end to the actual hold-up over solidarity at global level, this debt slavery must be abolished. It will then be possible to question the neoliberal economic model that structurally organises an unfair sharing of wealth, of which Gates’ and Buffet’s hyper fortunes are only the visible part.