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REPORT ON VARIOUS WORKSHOPS ON DEBT AT THE WORLD SOCIAL FORUM 2005, IN PORTO ALEGRE, BRAZIL, FROM 26 TO 31 JANAURY, 2005.

'ANOTHER WORLD IS NOT ONLY POSSIBLE. ANOTHER WORLD IS ON HER WAY, AND IF YOU LISTEN VERY CAREFULLY ON A QUIET DAY, YOU CAN HEAR HER BREATHING…….

Sr.Bride Counihan, L.S.A,
Brazil.

INTRODUCTION.

The World Social Forum 2005 which took place at Porto Alegre, Brazil, had over 2,500 scheduled events by some 4,000 organisations from 112 countries. The number of participants was approx. 119,000. The Forum began and ended with a Peace March which gathered together thousands of people all expressing in different ways their deep desire for world peace. While the WSF is a wellspring of alternatives, the process of discussion that generates them is more important than the alternatives themselves. There was a great desire evident that the Forum should be a universal experience, hence the decision that it will not continue to be held in Brazil. Next year's Forum will be regionalized, and the 2007 WSF is planned to take place somewhere in the continent of Africa

As on previous occasions, I found the experience of participating in the WSF 05 very inspiring and challenging. The attendance was the largest ever, and one had a great sense of the solidarity of a huge section of the world's population, in making another world possible. From the evaluation of previous WSFs, the format this time was somewhat different in that there were no keynote speakers. This was to respect the contribution of each participant and all the work was organized to facilitate maximum communication among participants. Instead of having some very large gatherings to hear addresses from key note speakers in various premises around Porto Alegre, this time all the events took place in tents especially constructed by the river. No gathering had more than 1000 participants, except the opening and closing ceremonies. This logistical change was significant in terms of what the Forum is trying to achieve by way of a mass mobilization of people in spaces to share ideas, become more conscientized, and suggest concrete proposals. Even the visit of the President of Brazil, popularly known as 'Lula', was 'low key' in this respect, and unlike the previous Forum in Porto Alegre in 2003, dissatisfaction was expressed with his handling of the debt crisis. By contrast, President Hugo Chavez of Venezuela received a tumultuous welcome.

My account of the proceedings in which I took part, has a certain repetitive quality about it, but I have not edited it much, as I think it adds to the cumulative effect, of so many calling for radical social transformation of our society. I think it helps to convey the sense of urgency of this moment in history, when one hears of so many different countries united in the same analysis of economic globalization, and so many indicating similar strategies to be assumed urgently by all peoples of the world.

The Forum is a sort of public square, an open space in which citizens can meet as equals, a place of information and debate, passion and joy. Participating in the Forum one can see how its energy connects different people, charging the batteries of hope. It allows for the revision of ideas, and strengthens the collective will, as all participants are led to believe in their own capacities and value their experiences and understanding. The Forum offers the possibility of devising new modes of thinking and contributing to the formation of a new political culture of radically democratice social transformation with effective proposals to create other worlds. This is not to deny that there are monumental difficulties involved in developing and implementing the ideas and processes debated at the Forum. Essentially the Forum is not a project or a strategy which all must follow. It has taken on the agenda of remaking the world on a human scale, for all human beings. As one report said, ' we must not allow war-mongers and terrorists, market operators and owners of corporations, with their fundamentalism, to dictate the priorities of humanity.'

Some participants at the 2005 WSF felt that it was time for the Forum to become more focused into specific actions, and a group of 19 high-profile activists drafted a Manifesto to make 'another world possible', urging participants to sign it. The points included debt cancellation, adoption of the Tobin tax on financial money transfers, dismantling of tax havens, the promotion of equitable forms of trade, a guarantee on the sovereignty of a country's right to not only be able to produce affordable food for its citizens, but also to police its food supply, the implementation of anti-discrimination policies against minorities and females, and democratisation of international organizations which would also include moving the United Nations headquarters far South of its current New York location. For its proponents, the Manifesto represents a courageous bold step necessary to convert the WSF into an effective political force for global change. To others, it is just the 'same old celebrities' who cannot swallow being part of the masses they once led! The Manifesto is available at www.ipsterraviva.net The Forum had a Wall for Proposals throughout the week, where various proposals which had been produced during the events were put on display.

WSF 2005 and the Tsunami Disaster.

The WSF 2005 devoted a lot of attention to the tragedy of December 26th which ravaged Asia and parts of Africa and had such a huge death toll. There was a great desire at the Forum that, as the world moves from the crisis response of relief, to the rebuilding process, all should work towards breaking the cycle of poverty and creating a better more hopeful future for the peoples of the region and not recreate the circumstances that made them vulnerable to the disaster. Participants at the Forum from the tsunami-struck countries urged governments to re-establish mangrove buffer zones, or what they called 'green belts' along affected or threatened coastal zones to prevent such disasters in the future. The severity of the tsunami disaster could have been averted, they said, had healthy mangrove forests, coral reefs, sea grass beds and peatland been conserved in a healthy state. Mangrove destruction, they pointed out, is caused mainly by unsustainable industrial development promoted by international lending institutions such as the World Bank, Asian development Bank, United States Agency for International Development and the Food and Agriculture Organization. These multilateral funding institutions continue to promote environmentally degrading industries such as shrimp farming, industrial tourism, charcoal production and urban expansion, all of which have had terrible and dangerous consequences for the coastal communities of Asia, Latin America and Africa.

Global call to Action against Poverty (GCAP).

The GCAP was launched at the start of the WSF 05. This is an open alliance of hundreds of non-governmental organizations, ranging from international ones eg. ActionAid or Oxfam to regional and local community-based organizations, trade unions, women's groups, and faith groups. Aided by the solidarity symbolized by the white band, the movement aims to make national governments and governments of rich countries comply with their promise to end poverty. Many promises have been made, including the Millennium Development pledges, fair trade rules at the WTO, and proposals to cancel the international development debt of the poorest countries. GCAP calls for cancelation of all debts of the poorest countries by the World Bank and IMF. They also call for more aid from richer countries related to poor people's priorities, an end to privatisation of public services, and gender-sensitive development, among other things.

Mobilization will be coordinated by the Global Action Forum, with the main thrust being on regional and national initiatives. White Band Days, when people are urged to wear a white band, are planned for 2005 to coincide with the G8 summit in the UK in July, the UN Millenium Summit in New York in September, and the WTO ministerial meeting in Hong Kong in December. Further information can be found at www.millenniumcampaign.org and www.whiteband.org

WORLD DEBT.

The main seminars on debt were:

1. 'Current Developments and new initiatives on the debt',
2. Agreements and Disagreements in the international Debt Movement - how to understand them, how to respect, them, how to deal with them?
3. Assembly of Creditors of the Social, Ecological and Historical Debt,
4. Moving further on illegitimate debt.

The speaker from Indonesia said that before the disaster, Indonesia had received new loans for 2005. Now the people of Indonesia are urging the World Bank and IMF and other creditors to move swiftly to full and unconditional debt cancellation. In 2004, Indonesia paid more than 8 billion US $ in debt repayments. In the recent disaster, the aid they received from the Tsunami Summit to Indonesia from rich countries was 2 million US $. The World Bank itself admits that at least 20 - 30 % of the loans made to Suharto were siphoned off for corruption. Therefore, the debts from this era are odious and illegitimate and should not be paid.

Poverty profile of Aceh.
The population was slightly over 4 million, 470,000 of whom have now been drowned. Before, they had a large number of internally displaced people, and this number has now increased by 150,000.

The main needs of Indonesia at this time are as follows:

1. Building and Construction and Rehabilitation funds. These funds should come from the resources generated by total and unconditional debt cancellation. There is a great need to address unemployment, lack of education etc. The commitments from the World Bank and IMF now are 2 million US $, yet Indonesia has paid more than 8 billion to creditors in 2004. For 2005, the debt payments, including principle and interest amount to more than 8 billion US $, hence it is clear to see that Indonesia does not need aid in loans, but in debt cancellation.
   
   
2. There is an urgent need for the IMF to stop pushing the Indonesian Government to cut subsidies on health, education etc.
   
   
3. Loans were given in the past, for creating new projects which often, were not based on the needs of the people. Therefore, immediate cancellation of these debts is needed. It is imperative that the process begin also to compensate for these illegitimate debts and the odious debts of Indonesia.
   
   
4. The CCI, Consultative Group on Indonesia should be dismantled. The World Bank and IMF must respect the right of Indonesia to develop their own economic policies, and they should stop interfering in the policy making. Indonesia must have the right to develop their own national development strategies without foreign intervention.

SPEAKER FROM INDIA.

The second speaker was from India, and he also gave an update on the Tsunami situation in his country. India was the third heaviest hit country after Indonesia and Sri Lanka. Their low-lying islands were hit, and tribal communities badly affected, with a total of 15,000 dead. The impact on the survivors is very great. A very large population of coastal fishermen have been hit, to an estimated financial cost of 10 million US $ in lost livelihoods, lost boats and nets etc. A great problem for these Tsunami survivors is that they now have no livelihood as they can't catch fish. Therefore the reconstruction of the livelihoods of these fishermen is now the most important task.

Within the context of neoliberalism, we note that neoliberalism 'allows for' disasters. Disasters give more openings for markets, for reconstruction costs etc. The IMF and World Bank rational is to give aid relief in the form of loans to be repaid, and not grants.
Comparing the situations of debt in India and Indonesia, India is not indebted in the same way regarding public debt, while regarding private debt, both countries are in the same situation.

The Tsunami was not the first disaster to hit India. In the past 10 years, we have had typhoons in the east and earthquakes in the west, so natural disasters are familiar to us. There has been a large groundswell of pressure from the social movements for not taking aid for these disasters. Thus India refused aid in the form of 'soft loans' for reconstruction re the Tsunami. But how far will the Indian government be able to resist
the temptation to look for loans? We want to do the reconstruction with our own money (grants).

The major point in all of this is:

• we need to give the call to start debt cancellation of the Southern Tsunami nations,
  
  
• we need to go beyond that, as Jubilee South says, and give the call to these nations to get together to remove the causes of such disaster.

If the Indian Ocean nations had a Regional Disaster Early Warning System, the disaster would not have happened on such a scale. Hence a Regional Early Warning System is vital. We need to ask for a Disaster Early Warning System rather than a Free Trade zone. This way, we minimize the need for aid and debt. It is so important to prevent ourselves getting into situations where debt is necessary. Two weeks before the Tsunami, the Phillippines had typhoons where many died. So a Regional Disaster Early Warning System is a vital call at this time. It is interesting to note that on some of our islands live two of the oldest tribes in the world, one of whom has only 700 population. Not one person died because the tribe could sense that something was going to happen at sea, and they all fled to higher ground. It is important for us to understand the local knowledge of these tribes.

In conclusion, the basis of our call for Debt Cancellation is:

1. The Government didn't use the money as planned.
   
2. The Disaster area must have immediate debt cancellation,
   
3. Much of the debt was used for corruption.

   SPEAKER FROM THE HAITI.

Since 1980 in the Duvalier regime, Haiti has increased its debt, due to the World Bank policies and now it can't pay. Haiti once was 'the pearl' and now it is totally devastated. The peasants use tree roots to cook, feed their children etc. For 80% of the population, this is the way of subsistence living. In 2004, the Government paid 2 million US $ in debt service payments, yet we also had two natural disasters with 7,000 people dead and a debt of many millions for the destruction caused.

After Aristide, Haiti was occupied by U.N. troops and since then, violence has increased. We have to pay 7 million US $ per month for these troops, hence this increases the country's debt. The State is very weak, so if we can't pay, there is a lot of imposition. Many ordinary people say we won't pay and will fight against this injustice. I ask all nations of the world to fight to support the poor countries.

SPEAKER FROM THE PHILLLIPPINES.

In addition to the recent Tsunami natural disaster, the Philippines has been ravaged by two super typhoons in recent months, costing thousands of lives. In addition to these natural disasters, we have the ongoing financial disaster. The fiscal situation in the Phillippines is very bad. The Freedom from Debt Coalition has called attention to the unbearable burden of debt.

Since 1987, the focus has been on public sector debt which is the legacy of the Marcos dictatorship. Over the years, the problem has been increasing. From 1997-2004, public sector debt increased by 100%, therefore the fiscal crisis in the Phillippines has been caused by a continuing budget deficit, very low revenue collection and by government practices to borrow money to finance the defecit, insteading of collecting revenue. In the past three years, interest payments have amounted to 20-30% of the national budget. Public sector debt now is 105.35 billion US $. In Phillippines currency, it is 5.9 trillion pesos…we can't grasp trillions with its 12 zeros!!

So the public sector debt has been the major problem since the end of the Marcos dictatorship until now. This total public sector debt takes up 130% of our gross domestic product. It is the biggest item in the national budget.
In 2003, repayments took up 28% of the national budget, while in 2004, they took up more than 31%. This interest payment on the debt is governed by 'automaticappropriation law'. This is a presidential decree of the Marcos dictatorship which says that 'before any other expenditure, one must pay the debt'. It continued as law even after the dictatorship. Cori Akino didn't restore democracy after the dictatorship, but made it part of her administration also. This violates the Constitutional prohibition, which gives highest priority to education.

The interest plus principal repayment is equal to 85% of total government revenue. For 2005, the debt repayment (interest plus principal) equals 95% of total government income. What does this leave? 5% for all other programmes! This is terrible !

The Freedom from Debt Campaign has launched a Campaign for an audit of all public sector debts, which is part of the Jubilee Campaign on the illegitimacy of debt.

The Campaign has two elements:

1. A Public Audit which would be conducted by a Congressional Commission,
   
   
2. A Citizens Public Audit, which would involve the citizens, not just the Government, which would monitor what the Government is doing in the debt audit.

Due to the Debt Crisis, we have been able to get support in Parliament regarding a Congressional Commission to audit public sector debt. This has been approved in the Lower House of Parliament. There is now lobbying with the Senators of the Upper House to approve this Congressional proposal, so it can become an official Commission. It needs to look not just at public debt but at contingent liabilities regarding government-owned and controlled Corporations and Private Companies. All debt is passed on to the people, but we ask 'why should the people have to guarantee the risks of private companies? We have managed to set up a mechanism for a Citizens' Audit, which is an important element in the Congressional Audit. It will involve testimonies of economic and tax experts but also testimonies from communities and peoples' organizations.

JUBILEE SOUTH REACTION TO THE TSUNAMI.

Jubilee South released a statement which got 600 signatures from ONGs world-wide in 1 week.

QUESTIONS/STATEMENTS FROM THE FLOOR.

The US is the biggest debtor nation in the world. It is important to convince nations to stop lending us money. Jubilee South nations should unite and stop paying the debt, if there is not cancellation by a certain date. Pushing Governments to act can only be done with the peoples' support.

What is Jubilee South doing in the Philippines regarding the corruption involved in Marcos' debts? For example, the Philippines Nuclear Power Plant cost 2.2 billion US $, but was never operated. People strongly protested because of the corruption and bribery involved. Cori Akino stopped the plant but the loans have to be paid and we continue to pay them up to today! Part of the loans were converted into bonds through the Brady Plan. Now we call on the Government to stop repayments on this nuclear plant. We have paid more than 100 times over for it! The loans are fraudulent odious loans.

ILLEGITIMACY OF DEBT IN THE CONGO (Zaire)

Our situation of debt is not from natural disaster but was created by human beings. After the colonization by France and Belgium, the situation was bizarre. With 32 years of dictatorship, we had an increased debt for wars against 'the red flag of communism'. It was the period of the great construction of dams which brought electricity for industry but not for the people. Energy goes 2000 kilometros to industry but the population has no access. It was a time of great corruption. Loans in the Mobuto era came to 8 billion US $, and when he left, he left a debt of 13 billion US $, including 8 million US $ which he took for himself. He left no health or education programmes.

Since the Mobuto era, we now have the disaster of war, with 4 million deaths which is more than 20 tsunamis. It is easy to stop war by not buying bombs from the war lords. The E.U. supported the war in Congo. The World Bank had organizations fighting within Congo. In our case, the aspect of 'generosity' of natural disasters doesn't exist, and there is nothing done to stop these wars. There have been millions of child soldiers, as well as 2 million refugees. International institutions offer a solution to create government with war lords who caused the disasters, but this is a joke! No one accepts it. They want to give 4 billion US $ more to establish this government! We ask for a reform of these institutions instead of a new government but no one listens.

What of the future? Regarding Food Aid, we should be able to sustain our population but we cannot, as due to war the peasants cannot produce. Today debt is re-structured, just changing old debt into new debt, but it is not cancelled. It is just new debt with a new name. In the Congo, there is a process of analysis by experts on the question of the re-embursement of debt, but the people are not aware or involved. It has the support of the World Bank but there is a lack of consultation with the people. Debt cancellation is important but we must also say where the money went, and it is government's job to say this. It is important to increase the partnership between Europe and other continents. There are many natural resources going out of the country, which if taxed, could increase income and stop the increase in debt. A national trade process is important for us.
SPEAKER FROM ANGOLA….Joao Batista.

In 2002 we had peace in the sense of freedom from war, but not enough to bring about reconciliation. There were very many land mines, so we have to import food which should not be necessary as we have sufficient land and water to feed our people. In Angola, it is necessary to increase investment in agriculture in order to reduce unemployment. Yet, most spending is on army expenses, rather than on social, and economic development. The war was an excuse for loans, when we should be fighting for expenses of the social sector. The Government gives 'mini-loans', yet there is very little spent on education, the rate of unemployment is high, there is concern regarding freedom and human rights violations. Civil society has to mobilize regarding the long-term consequences of all of this. It is important to mobilize workers, students etc but after much war, people fear to criticize the government. Jubilee South is very concerned to mobilize the people regarding debt cancellation.

SOUTH AFRICAN ODEOUS DEBTS.

Odeous debt in South Africa is the debt of an oppressive apartheid government.
All foreign reserves were committed in 1985, and on this basis, loans were raised. The government promised to pay back the IMF and World Bank and thus deprived the public. From 2007-2018, all reserves are committed, so the debt is rising even before the start of the repayment date in 2007! South Africa's government is still in its first ten years of democracy. We have to engage in military spending because Bush wants us to have an army to protect Nepal. Privatisations have led to political actions by the poor.

NORA CORTINA, ARGENTINA

In the era of the dictatorship, loans were offered to the dictatorship yet 100 children per day died, and there were very many disappearances. At the end of the military dictatorship in 1983, the Government assumed this debt and continues to repay. It is a huge debt, impossible to conceive of. It is a debt which is historical, social, ecological. It was others who borrowed to enrich themselves and the debt has increased 25 times its worth.

We won't pay for death, lack of health services etc as this debt has cost too much blood. We don't owe and we are the creditors historically.

Are the social movements going to keep up the pressure they have put on private institutions regarding non-payment of debt, and put this pressure on government institutions also?

Chair: Phillip Hazzle, ATTAC, Germany.

1. Can there be legitimate conditionality tied to debt relief?
   
   
2. Are all of us campaigning for total debt cancellation for all, or for some, or it is a mixture of both approaches?
   
   
3. Approaches to bringing about a solution to the Debt Crisis…do we go to the creditors and ask them to cancel, or do we go to the debtors and ask them to stop paying…or it is a mixture of both approaches?

LIDY B. NACPIL, Freedom from Debt Coalition, the Phillippines.

For Jubilee South, debt is more than a financial problem. In 2004 the Phillippines used 85% of government revenue to pay public debt. Work on the Debt question is about 'truth tellling'. It is not a question of honouring debts but a question of addressing the centuries of plunder by the North of the resources of the South. It is a question of trade relations since the South was used as second-hand factories with cheap labour. Poverty is based on exploitative relationships by neo-liberal governments. The lending is a system of exploiting our poverty to lend us money, and then exploiting our payments. In the 1970s there was a greater need for creditors to lend us money, than for us to borrow.

The question has been raised should there be conditionality? Our creditors are in no position to impose conditions. It is a moral question. We can't believe that the World Bank and IMF who lend money in exploitative relationships should impose conditions.

1. Movements in the South demand that resources be used properly. Movements in the North make conditions which Governments should follow, but it is the people who pay.
   
   
2. What conditionalities have been presented by creditors? Those which benefit creditors! Yet they say that Structural Adjustment Programmes lead to economic development.
   
   
3. On the second question of whether it should be partial or total debt cancellation, we believe debt cancellation should be for all countries of the South since the debts were contracted in unjust situations. This applies not only to the poorest countries, but also those who can affort to pay. They should not pay because it is a question of justice. Sub Saharan countries don't generate enough to pay even the interest on their debt. World Bank categories are used such as, 'a manageable
   
4. debt problem' while the fact is that 95% of total Government income is being used to pay the debt in the Philippines.
   
   
5. Regarding the question of how to overcome the debt problem, if we are talking of total debt cancellation it doesn't happen overnight. We need to demand cancellation from the creditors, and also address our own Governments and ask them to stop paying the debt i.e. repudiation. These are strategic goals which are not realizable in the short-term. Partial victories along the way are important, for example, the G7 to give 100% collateral debt cancellation by 2006.

We must base our struggle on what our people need. It is important to understand the power relations between international institutions of the North and South. We need to change the style of these power relations. Therefore, it is important first to build movements in the South, in huge numbers who can put public pressure. They pose a threat to overturning existing power relations. So it is not just a question of arguments or of research only. Let us remember that it took thousands of lives to oust the dictator Marcus, and that was easier than the debt situation!

CAROLINE PEARSE, JUBILEE UNITED KINGDOM DEBT CAMPAIGN.

I represent the Jubilee Debt Campaign where we have policy researched by consensus.
We recognise the scandal of the debt, the outrage towards the World Bank and IMF and this unites us. The question is asked what does it mean to end the debt situation? In 2005, with the G8 meeting and the Presidency of the EU, these are opportunities to make clear the anger of the UK Campaign regarding trade, debt and justice. For us, it is important to urge responsibility on the governments of the North. If thegovernments of the countries of the South want to repudiate debt, that is their choice. The question of arbitration is also important in the campaign to cancel debt.

Regarding the question of how much is to be cancelled, for which countries? This is a vast problem.

1. Odeous debt should not be paid.
   
   
2. There should be 100% of cancellation of 'unpayable' debts without sacrificing the needs of people. All of SubSaharan Africa should have 100% debt cancellation as they spend more on repayments than on health or education, was our initial focus. Cancellation should be open to all countries who need it. In middle-income countries there is need for a process to determine what is needed.

One area which is missing from our campaign, to date, is the question of illegitimate debt. It is not a question of who can but of who should pay debt. We refer to the fact that projects didn't benefit the people and had excessive interest rates. We need to develop stronger policy lines on this in the UK

On the first question regarding what conditions should be attached to debt relief, it is intolerable that creditor governments and institutions force the poor to become poorer. However to date we haven't called for unconditional debt cancellation. Some countries of the South have told us of their concerns regarding transparency and the question of monitoring. They don't want freedom from all conditions, and are concerned about the dangers of abuse etc.

ERIC TOUSSAND, C.A.D.T.M., Belgium.

The G8 meeting in 2005 presents a big responsibility to the UK, Ireland, and Scotland. The creditors World Bank and IMF have used divergences between movements, to emphasise proposals which are less radical than those of the organisations of the South. At some earlier Jubilee meetings, creditors said that they would cancel 100% of debt for the poorest countries, the HICs. The debt of the poorest countries has decreased, yet the debt of many other countries has increased. Organisations of the North and of the South need to work on common proposals to confront the creditors, the World Bank and IMF and see how to defeat these institutions by building up a global network.

There are certain divergences which are fundemental in the system of debt. Is it necessary to take credit in order to develop? Governments say that the less developed countries have a structural need for creditors from the exterior and so it is important to open frontiers to foreign investment. This is not so! In reality, this money is not transmitted in production and development but rather it comes back to the rich countries, for example in Argentina, 107 million US $ debt wasn't used for the people but for speculation. So it is important for us to be agreed on whether or not countries have to indebt themselves. Countries of the South are saying that they want to pay but in reality it is because they say that interest rates will be too high, inflation will rise, the economy will suffer if they don't pay, and so they pay.

The problem of conditionality is a fundemental problem. In 2003 I was invited to East Timor, which was a former province of Indonesia, by their Government. It is a new country as yet without debt, and the Government wanted to avoid debt. The World Bank and the IMF wanted to work there, in 'development'. They began applying the same conditions, saying that the rice of other countries is cheaper, therefore they should produce coffe and import rice! If they continue with this, they produce the same dependency. It is important to struggle to reinforce relationships between sovereign countries.

In the debate with the USA re Jubilee South, it was stressed that the people of the South have to control the money not spent on debt, rather than having money coming in from the exterior. It needs to be a bottom up rather than a top down approach.

If we limit debt cancellation to the poorest countries, it means we do not consider the fact that most of the poor live in India, Brazil, Mexico. These have the most poor, and are the countries of lowest costs. For me, the solution in reality depends on the governments of the South and the peoples of the South. If both of these do not impose their sovereign right not to pay, they will be victims of the generosity of the Northern institutions. It is important to conscientize regarding the fact that the South debt has been paid several times over. If we in the North try to negotiate with the World Bank and IMF it is a game,
and won't work. We need the support of the South to have a politics of humanity.

GEORGE LUNGO, AFRICAN FORUM ON DEBT AND DEVELOPMENT, ZAMBIA.

My works is in the area of arbitration. The African debt today is a problem of the historical relationship which Africa continues to have with the West. This began with the slave trade, colonization, and so-called independence. The relationship has always been in favour of the West. The solution to the debt question has to deal with this relationship which Africa has with the West. Africa has had a campaign of total debt cancellation but each time, the West responds with a plan, an initiative, so they always maintain the control. This situation must change, because power relations where the West keeps the initiative and the control won't help to solve the debt crisis. The initiatives are turned into control and intimidation. Africa has therefore to institute new policies.

The key issue in the Debt problem is the issue of control. Who is to be in control, Africa or the West? As long as it is the World Bank, and the IMF the problem won't go away.
Regarding the question of conditionalities, they may be good for Africa. Debt is not just a problemof the West but also of Africa's leaders. Money didn't go into development but went back into banks in the West. We would be most comfortable to have conditions such as: good governance, transparency regarding the use of resources within Africa, investment in health and education within Africa. If these conditions come from outside, the governments will accept them and they will benefit our people.

On the question of total debt cancellation for all or only for some, we say we need total cancellation for all Highly Indebted Countries. It must be a condition that money is not transferred back to western banks. Also we need a fair and transparent arbitration court on debt especially regarding African debt. The question of the power relations as cause of the debt crisis can be resolved through fair and transparent arbitration on debt.

The UN should extend the powers of the International Court of Justice to include the question of debt. Most debt was illegitimate, controlled by corrupt regimes, with wrong policy advice from financial institutions. There is need for an institution to judge regarding odious debt and illegitimate debt. We believe that a fair and transparent arbitration system is what is needed.

POINTS RAISED FROM THE FLOOR.

We need to look at citizen-led initiatives in each country rather than overemphasising conditionality from multi-lateral institutions. There are strategic choices which we need to make in the international movement, for example, re the Fair and Transparent Arbitration. Are we doing it out of sequence? Do we say we will give it if our efforts succeed? We need to insist on transparency, build political power to get a Fair and Transparent Arbitration Mechanism. It is important to campaign for repudiation in the South, which the North can then support.

How do we overcome the disunity among ourselves, for example, re debt cancellation?
We should keep asking for Audits at the risk of asking too much.

Zambia borrowed 6 million US $, it paid back 18 million US $ and it now owes 33 million US $, therefore cancellation is urgent.
Image of Zambia drowning while we teach swimming lessons! There is need for 100 % cancellation first.

In Indonesia after 22 years of the Suharto regime, Indonesia was 'developing'. In 1997 we hit a crisis from which we have not recovered, and now we have new problems with the tsunami disaster. We paid out 8 million US $ to creditors in 2004 to service the foreign debt, both principal and interest. What can we do?

Jubilee Angola - the World Bank never needs our population and so we continue to lack health and education services, water etc. What role could we develop in all this. The World Bank never gives account, for example, of the natural resources exploited.

COMMENTS FROM THE PANEL.

LIDY B. NACPIL, INTERNATIONAL COORDENATOR, JUBILEE SOUTH.

At the heart of conditionality is the question of our sovereignty in the South. There is a huge struggle to be free of this unequal relationship. In the neo-liberal context, it is the financial markets which are involved. To say that creditors should give debt cancellation on certain conditions coming from creditors is totally unacceptable. Arbitration is better than what the Paris Club has to offer. The question of a shift in the power balance is important in order to agree proposals. The proposal of arbitration should be a
requirement for all kinds of debt. Arbitration should be a choice for those who are suffering rather than a requirement which has to be gone through. Why, for example, should we have to ask an Arbitration court in order to stop paying Marcus debts? A crucial question to ask is: What serves our interest to free us from debt in any concrete situation?

CAROLINE PEARSE:

We have shared concerns around the question of power relations and the question of accountability, and responsibility of Northern governments. Governments must take responsibility for what they have done in creating the debt crisis. Also the IMF and World Bank must accept the role they play, which they must now pay for, by yielding power. Regarding the question of the accountability of governments of the South, we feel there is an obligation of government to consult with civil society.
Regarding reparations, we do not have a line on this. We agree that a Fair Arbitration system is a long way off, as is debt repudiation, as is even asking for cancellation…
We know that 30,000 children die daily, therefore it is urgent to stop this now, even before the power balance changes!

GEORGE. A Fair and Transparent Arbitration is not opposed to the campaign for total debt cancellation. FTA is a demand for a right which you have. Its like saying 'I'm drowning, come and help me!' FTA is a matter of choice not of force.

This morning various countries presented their struggles. We looked at the impact of social, ecological debt on countries. We heard stories of contamination, violence, health, water, electric companies construction. How reclaim these social, ecological, political debts? This afternoon we will look at how to strengthen our position as creditors. How can we proceed?

Tansanian man.

What is the ecological debt all about? How can we discover what has been taken, in order to know what has to be returned? Understanding history is necessary in order to build a strong social movement. Historically, we know how Europe migrated to other parts of the world. So the first phase of the ecological debt is this initial migration for 'exploration'. I was discovered in Africa by 'explorers'! These explorers gave new names to places. It was a time of collecting materials to bring back to Europe, eg.gold etc.
The second phase came with the idea of colonising those countries whohave resources. There was need for labour, slave labour. Africa has political but not economic independence, because of structures which don't enable people to move. Today we have corporate globalization in mining, extracting oil etc. You are supposed to repatriate only 15% of what you invested, but there are companies in Africa which repatriate more than 100% of what they have invested. This accumulation is ecological debt.

It is important now in the South to unite the creditors who have been giving this credit to the rich countries. Look at how we have allowed the industrialized countries to produce with such pollution, take the properties of the indigenous people etc. In Brazil shrimp is a delicacy. Clearing areas for shrimp farming has been an ecological disaster. Brazil has been given loans for this which have to be repaid. So there is need to analyse 'free trade' in the context of ecological debt. Global warming is 'clearing of the lungs of the world' (Amazon) It is increasing until it destroys all of us! We know that one species is extinct every hour.

Ecological debt is a serious issue. We are creditors. 5% of the pop of the world, living in the USA consumes 25% of world oil. When oil is taken from the earth, we are all bleeding.

INDIAN SPEAKER FROM EQUADOR.

It has been on the backs of our resources that the superpowers have become what they are. They took our gold, our oil and this has been at great cost to Equadoran Indians. These are our resources and must be reclaimed. 45% of our population are poor, and 35% have nothing, are excluded completely. For many years we have struggled and they still want to take our territories. We won't pay because we have no debt to the World Bank or IMF. Various organisations should join together and shout: 'We owe nothing'. It is the hope for our children which makes us say: We don't owe and we won't pay.

Other speakers from Argentina, Paraguay, Nicaragua, and Colombia gave further testimonies in Spanish, to the ecological destruction in their countries. (Due to the failure of the translation facilities, I was not able to follow it!)

This Seminar was an opportunity to explore the steps already taken and the further steps needing to be taken by those involved in various countries, in the campaign on Debt.

It began with an excellent film made by a youth group in Norway called Changemaker, on the Debt situation in the Philippines. The film highlighted some important issues:
A huge amount of foreign money was used to build a power plant beside a volcano, therefore it was too dangerous to use! One third of the country's gross national product is used to repay the debt. Since those in government were friends of Marcos, there is little interest in the search for Marcos' fortune.

In 1965 the foreign debt was 600 million US $. In 1985, it was 26 billion, when Marcos was ousted. A committee has been set up to examine these odious loans from the Marcos era. The Changemaker group is seeking the cancellation of these odious loans. Yustan, from this group, spoke of a community of 3,000 people who live under bridges. 70% are under the UN poverty line, with 30% of children suffering from malnutrition. While funds to service the debt continue to rise each year, the availability of social services continues to decline. Many workers just get 'piecemeal' work for export, and don't know who the owners of these foreign companies are. Yustan made an appeal to governments of the North to provide greater justice for the people of the South.

A panel discussion followed in which people from different contexts explored the illegitimacy of debt, with a view to seeing how there can be further development on the question. At the WSF three years ago, Joe Hanlon, researcher with Jubilee 2000 spoke of ways in which this concept could be operationalized as a means of addressing the debt crisis. It is 'do-able' and not an abstract concept. It is important to determine how much a country should pay, rather than how much they can afford to pay. It is a matter of ethics, of justice, and therefore there is nothing to pay. Where does the moral hazard lie? It is argued that the term applies to debtors, but should be applied to creditors. What is the moral hazard of creditors who make these loans to dictators?

The first panellist was Yustan, from Changemakers, Norway, which is a youth group pressuring their government about illegitimate debt as distinct from unpayable debt. They are against the injustice of the debt and seek to conscientize people on the structural causes of debt, trying to educate people to act. They work on issues of trade, HIV/Aids, militarization/debt. They have been working on the question of illegitimate debt for several years now. In 2003, they hosted a Debt Tribunal in Norway, which was the first to be held in the North, in a creditor country. This initiated a debate on illegitimate debt with their government but it didn't reach to people on the street, and was not taken seriously by the government. Then they developed a 'Dictator Campaign', wrote newspaper articles, had young people dress up as dictators and ask 'How is it possible to give money to dictators like this and expect to be paid back?'. They sent 3000 pictures to the Ministry for Development.

In 2000, the Norwegian government launched a Debt Plan. They are still critical of our arguments but now, at least, are interested in discussing the subject of illegitimate debt. There is a shift from 'this has nothing to do with us' to making it an intellectual debate. The government has introduced a study on the question of illegitimate debt and the majority of the regional panel have asked for the issue to be raised internationally. Just last week, the Minister asked the World Bank to investigate the illegitimacy of debt and the reaction was positive! While there is no confidence that the World Bank will be a credible partner to investigate the issue, yet it is the first time Parliament has asked for the issue to be raised at an international level.

Working on these issues in creditor countries is important, and may encourage the South to repudiate debt and see that campaigners on illegitimate debt have a point. Some lessons learnt in the northern context are the following:

1. It is important to mobilize ordinary people regarding the issue, otherwise research is worthless. The government of Norway understood the analysis from the start. Change only happened because they understood that the voters understood the message!

2. The question of strategy is important. It is important to focus on certain countries,

3. The work on debt is very slow work, often at high cost. It is important to show
the governments of the north that 'it is common sense'. Also it is important to engage the youth of the countries of the North in this constructive process.

THE SECOND PANELIST WAS BEVERLY KEANE, Global Trade Strategy Group, and a Jubilee South activist based in Argentina.

I will point a finger at the important concerns for Jubilee South as a whole. In the North it is a slow transition but in the South debt has been there for 500 years. We are very privileged to share a working relationship with the Campaign in Norway where the question of the illegitimacy of debt has been taken on very seriously.

The goal posts keep moving - by the IMF. Jubilee South has posed the problem of debt as illegitimate, not just the debt of dictators but debt itself as an instrument of domination. It involves a transfer of resources from the South to the North, foreign control over ecological resources etc. An example shows clearly the illegitimacy of debt.

It is said that Argentina is not paying its debt. The truth is that the Argentinian government continues paying 50% of debt to the IMF and World Bank, though they are not now paying most of the debt to private creditors. It is in a state of economic collapse recognised by the world community, with 50% of the population living in poverty. In two years, it has paid more than 10 billion US $ to the WB and IMF. Today it owes more than it did two years ago! Why is this? It is because the US $ has lost its value re the euro, and this has a great effect on debt. So this is one good reason why debt itself is illegitimate.

In terms of strategy, the first priority is to build a global movement for debt cancellation, not debt relief. This is the only relief which is good and just. Jubilee South calls for unconditional debt cancellation, because the imposing of conditions is a domination which violates our rights. With increasing pressure on creditor governments, and IMF, they look for new inventions to deal with the same problems, for example, the idea of a Debt Swop for, for example, education or the environment. Equador is calling for a swop for military spending on its border with Colombia. This notion must become part of education work. It recognises the illegitimacy of debt but shouldn't have to change for something else which is often even worse. In our Jubilee South mobilization, there was the organization of the popular Tribunals on Debt, at the second World Social Forum, to put the issue in a semi-juridical form, as a way of pointing to the illegitimacy of debt. Now, we are also proposing a North-South initiative which is to conduct audits of the debt in the North and in the South.

This is being proposed as a vehicle for moving forward at both popular and official levels. In the Philippines House of Representatives, they approved a Bill regarding an official audit, which must yet to go the Senate. This is an opportunity to uncover illegitimacy in its many facets and to advance the idea that 'we don't owe, therefore don't pay.' It is important to believe that it is we who are the creditors. The consequences of debt are that there is an accumulation of social and ecological debt which is growing fast. Therefore we say, we are the creditors, and are pressing for debt cancellation plus restitution, and reparation of the damage done. This is a basis for reconciliation and a coming together between North and South.

At the end of the panel discussion, Beverly Keane spoke of the Week of Global Action on Poverty, Debt and Trade, which is from 10th - 16th March 05. This is a very important action because the IMF and World Bank will have their Spring meeting on 16th April. It is extremely important to campaign for debt cancellation of the countries affected by the Tsunami and we should not let the opportunity pass. We also need to highlight the link between trade negotiations and debt.

THE THIRD PANELIST WAS BISHOP MANOEL FOLAM, Global Network of the Lutheran Federation. This Federation is trying to address the issue of illegitimacy in Latin America and not only in Argentina.

We see the vicious, immoral character of debt which is criminal because it leads to loss of life for so many. The question of impunity cannot be ignored as debt is an instrument of domination. It is a criminal instrument of the system. There are some problems in our being effective with our proposals, for example, the lack of understanding which exists. Also our actions have very little repercussion in civil society. We need to find convergence points in our common struggle, and the Churches can facilitate this. We are
planning an Assembly on this at present. It is time now to pass from declarations to action. It is important to conscientize people regarding the causes of their situation. While it is common sense, what is lacking is knowledge and awareness of situations, through story-telling. It is up to us to ensure that the truth is told, that people hear the human stories behind the numbers.

THE FOURTH PANELIST WAS TONY TUAJAN, Insititute of Political Economy, Manilla, chair of 'The Reality of Aid - International Network.'

It is hard to campaign of cancellation, and it puts a shudder on government officials! When Marcos was deposed, Cori Aquino met the IMF, and accepted that the Philippines would continue paying the debt, despite the fact that it was already 20 billion! She declared that the Philippines would pay every cent! She removed everyone from the Cabinet, but did not remove the Governor of the Central Bank who is 'the IMF's man'.
Debt cancellation provides the opportunity to open the way to debt audit. The government has now released details of Marcos' debt. It is still paying the World Bank more than 11 million US $ for the failed 'Green Revolution'! It is also paying over 50 million for the enforced sterilization of women. The Philippines has a fiscal crisis, therefore it is a good opportunity for the debt campaign. The service on interest payments is 50% of government revenue, therefore it borrows because the government deficit is 33% of the budget. There is a political atmosphere now regarding cancellation of debt and the notion of dictator's debts. Most debt is with bilateral agencies, not private banks who have already been paid. Approx. 50% of the debt, 600 million US $ is owed to Japan. The recent Japan Conference had a resolution to campaign against Marcos' debts. 200 million of Marcos debt is with ADB, 180 million is with the USA, 11 million with Belgium, and 1 million with CIDA. Bilateral institutions have a nice face re 'development', but they are still collecting debt. The 2004 Report regarding Government and Human Rights said that cancellation of the debt is a fundamental step necessary.

CHARLES from Zimbabwe, Research Officer, Republic of Congo.

The issue of debt is a crucial issue for Africans and global citizens. It questions our ability to take charge of our own development, our own economy, our own livelihoods. Debt remains a big issue because of the historical reasons behind it. There are links between illegitimacy, despotism, and the totalitarian regime of Mobuto. Regarding the issue of responsibility of the North in developing countries, creditors say 'we don't have responsibility'. The key to the illegitimacy of debt in the Congo is the issue of the Cold War. Mobuto was the point of contact with the West in the Cold War, when money was poured in with no accountability, and he could siphon off resources for development, into his personal account. The system was one of patrimony with no accountability for 22 years. It was a case of 'anything I say is law', 'everything belongs to me'.

Another issue regarding Congo's illegitimate debt is the question of unscrutinized projects. At least 10 such projects which he initiated were never completed. Such projects included a hydroelectric project, and steel production. Then there is the issue of nationalization, Zairization of Mobuto in the 1980s. The elite were able to benefit from money into personal accounts. What of creditors' irresponsibility? Mobuto was ruled by the administration of Lyndon Johnson. The USA financed him so that those who tried to topple him could not do so. A Report in 1982 showed that creditors' money going into the Congo was misused, yet over 600,000 US $ loan was still given by USA afterwards.
France and Belgium were very influencial, therefore it was difficult to overthrow the regime. Illegitimacy is seen in the inability to repay debts to creditors. After Mobuto, the country was deprived of resources to meet basic needs. So on the issue of the Congo and war, and Mobuto rule, one cannot talk of repaying without cutting social services.

Civil society must push for international conventions which force those who corroborated with corrupt regimes to collaborate with the repatriation of money stolen by these regimes. There is need for an International Convention to address debt cancellation in the context of money hidden in Swiss Banks, - foreign banks of creditors. There is a chance now regarding Iraq's debt. We have worked on the issue of a Fair and Transparent Arbitration Process which would apportion responsibility to creditors.

SANDRA, Jubilee Brazil.

Sandra stressed the importance of reinforcing the Campaign against the Debt especially through popular education. The area of communication is important, not only through lectures, radio etc but also the mobilization of people on the streets. Cancellation will only come about when there is action on the streets.
-There is a great need for a change of mentality, as it is not a question of a 'pardon'. That word should be removed from our discussions.
-There is a need for education to show that the work of the North on the debt is not a question of charity, or 'helping out' but a political process at an international level in which there is solidarity between North and South.
-The people of the North need to be conscientized to understand that the North is debtor to the South. There is need to reclaim the history of the relations between North and South which created the debt.
-It is important that governments and elites in the North assume their responsibilities and not just the IMF, and that they understand that the South is a creditor of the ecological and social debt.

There is the question of the criminality of debt. The debt needs to have an integrated audit, done in each country not just in the South but also in the North. This helps to highlight the actual situation. A short-term struggle now is the question of the cancellation of the debt of the Tsunami countries. There is need for international pressure that this is not just a moratorium but a cancellation. This is the same issue as exists now between Latin America and Haiti. President Lula announced an agreement with the World Bank for a loan for Haiti and this was very disappointing. Since 2001 in Brazil, we have a process of Citizens' Audit developed by the Jubilee South Campaign. This examines the contracts made between Brazil and debtor countries. It was found that of 815 contracts researched, only 238 were actually located. While there was plenty of evidence that the money was lent, there was a lack of contracts which legitimised the process, therefore there was no legal proof that many of these debts actually existed.

There is also work being done on the question of the integration of debt. There is a need for an audit of the environmental debt. The effects of debt can be seen in the budget of 2004, where 124 billion reais was paid on the interest on public debt, while just 11 million reais was allocated to education. We have seen such things as the cutting of the electricity in public schools in Brazil, and the great shortage of hospital services in the budget. It is the President of the Central Bank who dictates the policies, and he happens to be the ex-President of the Boston Bank to which Brazil owes much debt. It is like putting a fox in charge of the chicken run! We know that the FMI is pleased with Brazil's performance economically, and the World Bank also has given much praise. It is crucial that there is mobilization of people on the streets, to highlight the need for investment in education, communications media etc.

NORA CORTINA, Argentina - Madres da Plaza de Maio.

Why is this group involved in the struggle around debt? The debt has had a human cost in the people who have disappeared. Political prisoners have been tortured, disappeared, killed and all because of a lack of justice. Many people are exiled within as well as outside their countries and so the human cost of the debt is very high. When people disappeared, there was no reply from the government or the police. They struggled for a world of justice for all, and were persecuted. Our people have been dominated by hunger and by torture, therefore we are creditors. The Madres represent a huge obscene siphoning off of people at a huge human cost. Our children are hungry, sick, there is less work, less health care, therefore we say 'don't pay the debt' because of these Structural Adjustment Programmes. Its an inhuman debt. The blame lies not only with the World Bank and IMF, but also with the intermediaries, the Minister for Economy etc.

What actions are needed? A global Campaign is both desirable and possible, and this has been shown by all the presenters. The challenge is to get the truth out there, tell the human stories, undertake direct action by lobbying politicians, make the international community take it seriously. The debt is illegal, and not just illegitimate. The UN Comission on Human Rights has reported on the Structural Adjustment Programmes and Foreign Debt, and it is important for civil society to co-operate with this. It is time to link action and discussion together, so I invite each of you to come here to the panel, give your name and that of your organization, and your email address so we can continue discussing and building a community of direct action.

CONCLUSION.

At the time of writing of this Report, the final proposals from the work of the WSF 2005 on the debt question were not yet available, but they can be read on the WSF webside shortly.

I would like to take this opportunity to thank most sincerely the Debt and Coalition Ireland, who have contributed to my expenses during the Forum.

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