05 July 2008
Debt & Public Finance
– Debt campaigners from Asian countries and other parts of the world today reiterated their challenge against the rich nations to do more than promise more aid to Africa. They demanded that the G8 governments cancel all illegitimate debts that people of developing countries are being forced to pay.
In a public forum in Sapporo, around 200 kilometres from the venue of the official G8 Summit in Lake Toyako, Hokkaido, members of Jubilee South- Asia Pacific Movement on Debt and Development stressed that debt is a global problem, affecting almost 100 countries in the world—from the regions of Africa, Latin America and the Caribbean, Asia and the Pacific. JS-APMDD said the total external debt claimed from Southern countries is about US$2.7 trillion.
Lidy Nacpil, JS-APMDD coordinator, said that illegitimate debts are those which cannot be rightfully claimed as debts of the peoples of the South.
“Illegitimate debts involve the gross violation of basic assumptions of debt contracts, as well as widely accepted ethical, social, political, economic, environmental values, standards and principles. They cause harm to the well being of the people and communities in whose name the debts were incurred and who are the ones paying for these debts,” explained Nacpil.
According to JS-APMDD, these violations can be found in any one or combination of the following: circumstances surrounding the contraction of the debt (can be immediate, can also include broader, historical context); the nature of the contracting parties themselves; the relationship between the contracting parties (and the imbalance of power which shapes the financial transactions and relationship); the terms and obligations of the contracts; the implications and impact of attendant conditionalities ; how the funds were used; and, the impacts of servicing these debts.
“The G8 governments bear part of the responsibility for much of the illegitimate debts claimed from developing countries – as lenders of bilateral debts and as major shareholders of international financial institutions like the World Bank, the International Monetary Fund and the Asian Development Bank,” stressed Nacpil.
During the forum, the San Roque Multi-Purpose and the Bohol Irrigation Projects in the Philippines and the Jamuna Bridge Project in Bangladesh were presented as concrete cases of illegitimate debts.
Milo Tanchuling, secretary general of the Freedom from Debt Coalition (FDC), said that as of 2007, the Philippines has US$6.23 billion debts claimed by G8 countries, or 45.6 per cent of the country’s total foreign debts minus the bonds. More than US$5 billion of these debts or almost 39 percent is claimed by Japan alone. -30-