Illegitimate debt

30 June-01 July 2003
Geneva, Switzerland

A Call to Action

From 30 June to 02 July 2003, 30 of us debt activists from various campaigns and movements devoted to eradicating the external debt problem of poor countries came together at the Ecumenical Centre in Geneva, Switzerland from all over the world to participate in a workshop on Illegitimate Debt and Arbitration organised by The World Council of Churches. The workshop set itself three challenging objectives:

• Assess the ongoing debt campaigns in view of current geopolitics in the world;
• Explore the relationship between Illegitimate Debt, Ecological Debt and Fair and Transparent Arbitration Process; and
• Identify urgent issues for focusing our work, strategies and concrete actions for revitalizing the debt movement.

The debt crisis remains unresolved. Wealth continues to be transferred from the South to the North through debt payments, among others. Financial transfers remain negative because of falling investments and declining terms of trade in the South. New loans are made to roll-over old debts in a vicious cycle of indebtedness. All this continues to result in unmitigated human suffering, especially of women and children, and ecological degradation in poor countries, as the crises in Argentina and other countries remind us. The current situation is unsustainable and immoral.

At core, the debt problem is one of profoundly unequal power relations. The balance of power in the global governance system has become even more skewed. We live in an age of empire where one superpower can unilaterally decide to invade a country on an unfounded premise, where that one superpower can flout international law with impunity, and where that one superpower can quash even a weak response to the debt problem such the Sovereign Debt Restructuring Mechanism.

The debt crisis cannot be de-linked from economic globalisation and the whole unjust economic system. We are thus facing a neoliberal framework and strategy articulated through the International Monetary Fund, World Bank and World Trade Organisation - institutions that serve the economic interests of the powerful at the expense of many people's human rights and environmental integrity.

Moreover, in many of our own countries, we find governments that are subservient to the neoliberal policy dictates of these international financial and economic institutions and the interests behind them. All initiatives, including the Heavily Indebted Poor Country initiative and the Poverty Reduction Strategy Paper approach, have never addressed the roots of the problem and have even failed in their own terms.

Yet there are reasons for optimism and hope. We live in exciting times: an expanding global civil society has been coming together in an unprecedented way, in the World Social Forum process and elsewhere, and mobilising around fundamental concerns of justice and human dignity that touch us all. The debt issue is one such issue where justice is at the heart of the matter.

There is a growing echo on the debt issue and widening of the discussion to include ecological concerns and the historical legacy of colonialism and neocolonialism. The issue of unjust trade has become more prominent within civil society debate. Nonetheless it is clear that debt and trade are inextricably linked in terms of permanent structural adjustment and in terms of declining terms of trade and the balance of payments.

Now, more than ever, there is a need to further develop, mobilise and strengthen social movements within and between countries. We have to forge common understanding and unity within the debt movement and between debt, trade, environmental movements and the global justice movement as a whole so that we may all work together for the cancellation of illegitimate debts and the building of a more just, life-affirming global economic system. Together, engaged civil society comprises that "other power" or counter power.

In moving forward in addressing the debt problem, we identified the following strategies and concrete actions:

• Conduct processes of debt auditing to advance the issue of Illegitimate Debt and Ecological Debt (countries such as Brazil, Ecuador and the Democratic Republic of Congo can be used as case studies);
• Consider the possibility of a World Commission on Foreign Debt and Audit;
• Demand the cancellation of Iraq's odious debt and demand reparations for the Iraqi people through their legitimately-constituted government;
• Continue to develop and explore international laws and legal mechanisms to address Illegitimate Debt and Ecological Debt including undertaking a collective study and publication of case studies on illegitimate and odious debts and looking at the possibility of bringing a case to the International Court of Justice;
• Involve parliamentarians in the discussion on Illegitimate Debt, Ecological Debt and Fair and Transparent Arbitration Process;
• Confront the Paris Club and other creditor clubs;
• Continue to mobilise at international meetings and other events such as the WTO Ministerial in Cancun, the annual meetings of the international financial institutions, the United Nations (UN) General Assembly, and the African Heads of State meetings;
• Link the issues of debt and trade more deliberately through studies and active participation of debt movements in Cancun and trade-related events;
• Re-appropriate and maximise the UN Economic and Social Council as a forum for discussing Illegitimate Debt, Ecological Debt and Fair and Transparent Arbitration Process and other alternative initiatives for socio-economic transformation;
• Take concept of ecological debt in environmental meetings and fora;
• Identify and publicise "reckless lenders" to discredit the creditors;
• Call for an international week of actions on debt coinciding with International Human Rights Day;
• Support the Southern People's Ecological Debt Alliance;
• Conduct research on impacts of debt servicing, debt and women, debt and privitisation, debt and PRSPs, and debt and militarism, among others; and
• Hold various conferences and meetings on debt including the following:
  - Conference on How to Work Out Payment,
  - Public Referendum on Non-Payment of Debt at national and global levels,
  - Conference on Ecological Debt, Restitution and Reparations,
  - South-South Summit in India before the World Social Forum,
  - Summit on Odious Debt in 2004,
  - Meeting on Ecological Debt in October 2003,
  - International Conference on Debt in Africa in 2004,
  - International Meeting on Fair and Transparent Arbitration Process in Guayaquil, Ecuador in 2004,
  - 3rd International Seminar on Odious Debt and International Law in Amsterdam in December 2004,
  - Africa Jubilee South Meeting in Mali in December 2003, and
  - Parliamentarian's Forum on Illegitimate Debt.