Right now, the creditors (eg. G8, IMF and World Bank) control the debt issue.

• They make the rules
  
  
• They play judge and jury
  
  
• They decide how much a country should pay
  
  
• They do not question the legitimacy of the debt
  
  
• They do not consider whether debt repayments are undermining human rights

The Heavily Indebted Poor Countries Initiative is totally inadequate:

Out of the 24 countries in receipt of debt reduction 16 will still be spending more on debt than on health while 10 will be spending more on debt than on health and primary education combined.

We believe that if a real and lasting solution is to be found, the debt crisis needs to be settled by an independent body outside the control of the creditors

An independent 'fair and transparent process' to deal with debt should

• be based on the application of justice and reason
  
  
• protect the human rights, and the human dignity of the debtors as well as the creditors
  
  
• give citizens affected by the debt crisis a legal right to have their voices heard in the resolution of that crisis
  
  
• ensure freedom of information, transparency and accountability to the public are central to the process

A fair and transparent process for dealing with national debt is not a new idea

• In the aftermath of World War II, German debt service payments were negotiated around the need for reconstruction and development. The negotiations were managed independently and included all of Germany's creditors including Ireland
  
  
• In the 1970s, General Suharto of Indonesia was awarded a very lenient debt settlement, in return for his friendship with the West during the cold war.
  
  
• In both cases an ad-hoc independent process was quickly organised and massive debt cancellation was agreed.

The Jubilee Campaign in Ecuador sees a fair and independent process as key to the establishment of a more stable and equitable economic system, which benefits all of humanity.

Why should we focus on this now?

The recent crisis in Argentina has highlighted the need for an independent system to deal with unpayable debt. Argentina is in crisis: They are unable to keep up with their debt payments. There have been uprisings across the country because of the collapse of living standards. The IMF demands budget cuts which will lead to further impoverishment.

Should Argentina struggle to repay its $147 billion debt?

Argentina was ruled by an oppressive military regime from 1976-l983. During this time

• 30,000 people disappeared
  
  
• debt increased 6 fold from $7.8bn to $46bn
  
  
• Billions of dollars of debts owed by private companies were nationalised and became part of the country’s public debt. Repayment of these debts became the responsibility of the Argentinian people who neither authorised these loans nor benefited from them. Among the companies which benefited from the nationalisation of their debts were: Mercedes-Benz Argentina, Ford Motor Co. Argentina, IBM and Citibank

In 2000 An Argentinian Court found that the debt from the military regime was illegitimate:

• There was no economic or financial justification for the debt
  
  
• Foreign debt increased astronomically through the implementation of economic policies which brought the country to its knees
  
  
• The IMF was cited in the court for being co-responsible in approving fraudulent loans
  
  
• The court is now looking at whether money borrowed subsequently was to refinance debt from the military machine

A new court case is examiningg whether loans taken out after 1983 were used to repay debts incurred by the military regime. It seems clear from the story of Argentine’s debt over the past 25 years that much of it is illegitimate and should not be repaid.

STOP THE IMF TAKING OVER

Recently the IMF announced their support for an international process to deal with debt, however the IMF want:

• To play a central role - determining whether or not debtor governments can petition for a suspension of their debt payments
  
  
• The procedure to be confined to private creditors only
  
  
• Debts owed to the IMF to be excluded

WE MUST MAKE SURE THAT THE IMF DOES NOT TAKE CONTROL OF ANY NEW PROCESS TO DEAL WITH DEBT