Wednesday, September 17, 2008

Ecaudor - A View from Jubilee Scotland...

Debt campaigners from over thirty countries in the rich and poor world met in Quito,
Ecuador, over the last week to make plans for the international fight against
illegitimate debt.

The location of Ecuador was not chosen at random, for while international delegates
made plans the country’s officials and civil society members were finishing an audit
of Ecuador’s illegitimate debt, the first time that any country has put together an
official and properly-resourced exposé of unjust debt.

It was inspiring to participate, and see how Scottish debt activism fits into a
huge and highly diverse global movement. As the week wore on campaigners from Asia, Europe and the Americas first got to understand each other’s perspectives and
strategies, then to argue with each other, and in many cases to reach powerful
agreements. And all this against the backdrop of a country which is beginning to
assert itself strongly against the gross imposition of debt.

The two final resolutions that the conference passed were in support of the Haitian
people - whose suffering is currently so exacerbated by unjust debt - and also in
support of the Ecuadorian debt commission, with a particular hope that their
findings would inspire policymakers to renounce and repudiate the country’s
illegitimate debt.

As the conference breaks up, however, this final outcome hangs in the balance: the
commission does not deliver its report until the 28th of September. And there is the
small matter of a national constitution to steer through in the meantime. One thing
is for certain - the debt campaigners of the world may be flying out of Ecuador, but
they will be watching it extremely closely over the next few weeks. A small country,
it could be about to throw a punch at international debt that is well above its

James Picardo, Jubilee Scotland

Tuesday, September 16, 2008

Day 4 (actually 6 – I lost of couple of days):

I’m sitting in the closing session of the conference. Everyone’s really tired – it’s been a marathon discussion of some really heavy subjects – but it’s clear that it’s been worth it. The international debt movement is more real than it ever has been before and the amount of collective, global actions that have been agreed are astounding – and a bit scary.

The Debt Commission has still not officially reported. President Correa has had to travel to Chile to help deal with the de-stabilisation of Bolivia which is causing real concern amongst the delegates here. We do expect the report any day though, so keep your eyes out for information on the website.

We have passed resolutions calling for immediate debt relief for Haiti, which has been rocked by storms and a severe food crisis in recent weeks, and supporting Ecuador’s Debt Commission, and urging Ecuador’s government to follow-up on this report.

The news today – about further turbulence in the financial markets – has also made clear to us what a critical time this is for the debt movement. As an irresponsible financial system again engulfs millions of people in debt, we urgently need to transform the financial architecture that has inflicted poverty and suffering on many many countries over the last 30 years.

Back to the UK to get started…


Monday, September 15, 2008

Day 3 in Ecuador

Day Three
We've spent all afternoon with the Ecuador Debt Commission, and there was a real buzz as everyone realised what an exciting time this is in the campaign to cancel illegitimate debt. This is the first time any government has commissioned a body - drawn from Ecuador and other countries - to look at it's total debt and decide what portion is illegitimate. The way the Commission worked will serve as a model for countries right across the world. Moreover, depending on what President Correa decides to do once published, it could set a radical model in motion for other Southern countries.

Ecuador's debt is massive. Like many indebted countries, Ecuador was lent large quantities of money by US banks in the 1960s and 70s. In the late 70s and early 80s the US Federal Reserve - controlled by those same banks - increased interest rates from 6% to over 20%. Debt level soared from around $1 billion in 1970 to over $14 billion in 2006. In that year only 14% of Ecuador's annual debt repayments were repaying debt on new projects - a massive 86% represented interest payments on old loans.

In order to repay these debts - and meet the conditions imposed through these loans - Ecuador has massively over-exploited its resources (like oil) and has paid enormous sums to foreign 'experts' to advise it on how to privatise elements of the state. Not only have the poor of Ecuador suffered from some of these privatisations, and indeed had their human rights violated - for example by rising health care costs pricing them out of access to health care - but the Ecuadorian people have then had to pay many times over for the privilege, through debt and interest repayments.

The Debt Commission's primary objective was to stop the ongoing payments which continue to drain capital from the Ecuadorian economy. The Commission reported how tough their job had been - having had to sort through thousands of unmarked boxes of documents and, despite strong political backing, being obstructed by some bureaucrats in the Ministries and the Central Bank. When looking at the loans they defined illegitimacy as a loan which violated Ecuador's sovereignty, which violated human rights, or which damaged the people or environment. Even hardened debt campaigners reported being shocked by some of the loans they'd investigated.

Groups from rights around the world - Bangladesh, Philippines, Nepal, India and Mali - told how they were organising their own citizen's audits of their country's debts, and how important the Commission's work would be in helping those audits, and in helping their governments recognise the process.

The Commission will report to the President on Monday, so hopefully I can give more information about the content of the report then. But there is a real feeling here that this is the first concrete step towards justice for those oppressed by illegitimate debt in the world.

(Photo taken by '
quaziephoto' - Used under Creative Commons Licence)

Friday, September 12, 2008

Day 2 from Ecuador

Yesterday afternoon we were lucky enough to have a presentation from a member of the Ecuadorian Debt Commission. The Debt Commission is in more or less permanent session at the moment, as it needs to report to the President at the weekend (the picture to the right is from the launch of the Commission last July). He told us of the challenges the Commission had faced in recent months, especially institutional challenges - many in the government system still disagreed with the purpose of the Commission.

But he posed us other challenges. While some of Ecuador's debts bore all the signs of illegitimacy (notably had been used for projects unhelpful to Ecuador's people), others had been used for projects which were helpful for the people of Ecuador. But even those good debts had had serious
impacts on the fight against poverty in Ecuador because they had been used to impose unhelpful economic and political conditions on the government and had led to the massive outflow of funds from the country in the long-term and reinforced Ecuador's dependency on Northern countries and banks.

Most people probably think of illegitimate debt as something that arises from lending to dictators. But we've heard over the last day how the situation is much more complex and widespread, and most delegates here thought the fact that loans were so often used to infringe a country's sovereignty - through economic or political conditions - should in itself be grounds for judging that debt illegitimate. Of course loans are going to have terms of mutual accountability that must be abided by - but this is quite different from using these loans to force additional and
unrelated changes on a government.

One of the delegates gave a brilliant example to understand this issue better. If I go to the bank to get a loan to buy a car, the bank will of course want proof that I actually buy that car. That's a term of the loan. But if the bank says to me that I must always wear red while driving the car or that I must always play rock music in the car - or even worse that I must never stop at red traffic lights - this is totally unacceptable and in the worst case very damaging to me. Even if the bank forces me to do sensible things like stopping at stop signs or wearing my seat belt, I'm likely to be pretty irritated because that isn't the role of the bank. By imposing even sensible conditions, the bank is usurping the role of other state actors - like the police - and making itself a more powerful player than is justified in my life and my society.

Blogging from Ecuador

Nick Dearden, Jubilee Debt Campaign's Director, is in Quito in Ecuador for an international debt campaigners conference on Illegitimate Debt. This is his blog from the mountains.

Day 1:

I'm currently at a momentous event to discuss where the debt movement is going next. Around 50 campaigners from every continent in the world (bar Antarctica) are in Quito to discuss a more coordinated and high profile campaign on illegitimate debt. Movements from the global South (developing countries) have campaigned on the debt their countries bear in terms of power and legitimacy for many years, while Northern countries have focussed more on making sure debt is not 'unpayable' for poor countries.

While we've had amazing successes in cancelling developing country debt in the last 10 years, it is still nowhere near enough and most debt campaigns across Europe, the US and Australasia are now campaigning for governments to look at the illegitimacy of debts - where loans were lent recklessly for projects which had a negative impact on that country's people or which were siphoned off in corruption or used to impose inappropriate economic conditions like trade liberalisation on countries - surely those loans should not be the responsibility of the Southern country?.

We're in Ecuador because the government of President Correa is the first in the world to conduct a Debt Audit - which is examining the debts of Ecuador and working out which are legitimate and which illegitimate. The Audit could have a massive impact in putting the issue of illegitimate debts on the agenda internationally and forcing Northern lenders (countries and banks) to cancel some of the debts they lent irresponsibly. We hope the Audit will be published at the end of the week.

Today we're getting over altitude sickness (Quito is the second highest capital city in the world) and jet lag (some people have travelled for nearly two days to get here) while discussing what we mean by illegitimate debt and how we can get our message out more widely.