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The Treaties - 13 - Debt Treaty


Preamble

1. Considering that the foreign debt is the most recent mechanism of the exploitation of Southern peoples and the environment by the North, thus adding an extra burden to the historical, resource and cultural debt of the North to the South;

2. Considering the existence of a planetary ecological debt of the North; this is essentially constituted by economic and trade relations based on the indiscriminate exploitation of resources, and its ecological impacts (intensification of erosion and desertification, destruction of tropical forests, loss of biodiversity and growing disparities in lifestyles), including global environmental deterioration, most of which is the responsibility of the North;

3. Considering that the Southern countries' debt burden is a major drain on their development and ecological resources: they pay out over $50 billion more in debt service each year than they receive in new capital from the North, and yet the foreign debt continues to grow dramatically; this has rendered Southern countries totally or partially incapable of paying the debt;

4. Considering that the indebtedness of Southern countries is rooted in a development model which is not responsive to the needs of the majorities of their populations, but rather involves the harmful exploitation of people, resources and the environment of Southern countries, through adverse terms of trade, trade protectionism and the power wielded by international capital by, for example, transnational corporations;

5. Considering that the perverse logic of the debt crisis - the more Southern countries pay the debt, the more they owe - has generated massive net financial transfers from the poor to the rich, thus perpetuating a process of decapitalization, impoverishment and environmental destruction that has devastating consequences for the South; there are also negative impacts to the peoples of the North with taxpayers' money bailing out banks, growth in unemployment and an increase in drug abuse;

6. Considering that the illegal and fraudulent debts, which are characterized either by violation of national laws, capital flight or corruption, were used to finance over-priced and substandard projects and were perpetrated both by the creditors and recipients;

7. Considering that steps to reduce or cancel the debt are necessary but insufficient to overcome social inequity and environmental degradation, unless a structural transformation of development objectives, priorities and methods is undertaken; this includes a) structural transformation in the financial, commercial and technological relations between rich and poor, and b) a participatory and democratic political process;

8. Considering that the structural adjustment policies induced by the International Monetary Fund (IMF) and the World Bank and sponsored by the Southern governments ignore the roots of the problems afflicting the Southern countries, such as unequal income and knowledge distribution, increasing domestic debt, high inflation and the vicious cycle of the foreign debt; that force poor countries to adopt unsustainable patterns of export-oriented production, with perverse impacts on the value of those products in the global market, as well as on the lives of the rural and urban populations and on non-renewable resources; and that weaken the domestic economies, the purchasing power of wages and salaries, public assets, and the capacity of the State to invest, to regulate and control the private sector according to adequate domestic priorities and to protect the environment;

9. Considering that such policies result from the transfer of sovereign decisions to the realm of the creditors and interfere with the social, economic, commercial and technological policies of the Southern countries;

10. Considering that swap and buy-back mechanisms do not resolve the debt nor the environmental crisis and do not contribute to the development of policies consistent with the democratic management of resources;

11. Considering that local communities must take greater control of their own development;

12. Considering the need for peoples of Southern and Northern countries to cooperate in creating and implementing diversified, sustainable and equitable models of development;

13. Considering that sustainable and equitable development in the South can only be fully viable and effective if the North also undertakes a structural transformation, overcoming the logic of unlimited and indiscriminate growth which is responsible for a production-oriented and consumeristic economy that generates excesses, wastes and resource depletion;

14. Considering that decisive action on the debt will make resources more available for the promotion of socially just and ecologically sustainable development models;

We Pledge to:

(All pledges are meant to take into account the full participation of women and indigenous peoples)

15. Pressure governments and banks to establish a democratic process for the resolution of the debt problem by submitting to full transparency and greater accountability through freedom of access to information, public audits with definite deadlines and the participation of people's organizations and NGOs in the making of debt policies

16. Work for the recognition and compensation of the planetary ecological debt of the North with respect to the South

17. Work strategically for the effective cancellation of the debt, for the elimination of net transfers of resources from the South to North, for the generation of local technologies and for the establishment of transfers of appropriate technology to the South within this decade

18. Work tactically for massive reduction of the debt burden starting with the immediate repudiation of all illegal and fraudulent debts

19. Oppose all debt conversion measures that do not meet people's interests (including swaps tied to conditionality, sale of agricultural lands, loss of sovereignty over national territory, extraction of genetic material from areas that are rich in biodiversity, increase in inflation and public expenditure) nor undertake appropriate actions consistent with our debt-management strategies

20. Strive to replace the present global development model with sustainable, equitable and participatory models, including structural transformation in the North and global and national redistribution of income and wealth and access to resources, which place resources and decisions in the hands of local communities and organized society

21. Put pressure on Northern governments and international institutions to get fairer and just terms of trade for the South, including the dismantling of all unfair protective measures imposed by the North

22. Hold Northern governments accountable to the minimum level of Overseas Development Assistance at 0.7% of Gross National Product; while working to ensure that financial flows to the South support ecologically, socially sustainable and participatory development; with the ultimate goal of eliminating the dependence of the South on this form of assistance

23. Initiate joint campaigns for the elimination of destructive structural adjustment conditionalities, through the overall restructuring of multilateral agencies

24. Work together with key social, cultural, professional and religious institutions and the media to publicly address the ethics of the debt and structural adjustment programs

25. Work for the establishment of democratic institutions at the sub-regional, regional and international levels, independent of States, with the power to monitor, regulate and sanction global economic agents and their transactions

26. Press governments of the South to establish a collective debt resolution strategy

27. Repudiate the administration of the Global Environmental Facility (GEF) by the World Bank and work to have the GEF placed within a transparent, democratic and ecologically responsible institution

28. Put pressure on the United Nations (UN), governments and commercial banks to establish a conference on foreign debt and related issues attended by all actors in this debate - debtors, creditors, social movements and NGOs.

Strategies for Action

29. Set up a coordinating committee whose principal task is to further develop and particularize the campaigns and pledges contained in this treaty, and start a global network on debt, development and the environment.

30. Undertake joint campaigns against the debt, building on case studies from the regions of Latin America, Africa and Asia. These campaigns will be addressed at the local, provincial, national, regional and international level. The campaigns will include a policy statement on illegal and fraudulent debts that will reinforce demands for the cancellation of the debt.

31. Develop joint policy positions on the debt regarding freedom of information, transfer of resources, accountability and public participation in policy making; press for the democratization of the dialogue between creditor institutions and governments so as to include social organizations and NGOs. These policy positions will be addressed to multilateral lending agencies, creditor governments, relevant official institutions, social movements and the NGO community.

32. Put pressure on international organizations for the establishment, by the end of 1995, of a system of accounting of planet Earth in order to quantify the cumulative debt of the Northern countries which results from the resources they have levied and the destruction and waste produced in the course of the last 500 years.

33. Establish a "Global Day for Freedom from Debt" (date to be established by the coordinating committee). Actions on this day could involve pressure on creditor banks, education, demonstrations, and symbolic forms of action.

34. Work with jurists and lawyers to establish regulations and legislation on international transactions; put pressure to make them binding to nations and to corporations.

35. Put pressure for bank transparency regarding financial transfers, including those of private citizens, from South to North, such as an annual bank deposit statement by country.

36. Withdraw our funds from those banks and companies which support or implement environmentally and socially destructive activities and initiate campaigns to target them.

Tasks of The Coordinating Committee

37. Develop a comprehensive list of existing resources, actions already achieved and ongoing campaigns related to the debt. This list will also include NGOs who are working on this problem.

38. Work with the signatories to this treaty to accomplish the actions in paragraphs 29 to 36.

39. Plan a follow-up consultation on the debt within one year of the Global Forum to evaluate our progress and continue the process of collaboration.

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