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)