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Cancel the Debt of Third World Countries

There is a connection. The Third World Debt is odious and should not have to be paid back because the Western banks *lent it realizing it would be stolen* from those countries people, leaving them having to pay, long after their corrupt leadership had flown the coop. Countries should not be left holding the bag for deals done by their kleptocrats.

The Global South Needs a Debt Write-Off

"Global South economies like Zambia’s are being battered by the coronavirus. We must write-off their debt now. As stock markets in the rich world cling on to the gains made on the back of government and central bank largesse, emerging market economies are still being battered by the pandemic." (There is a linkage between the Third World Debt and trade in services deals like the GATS. And its not a pretty one.)

Web of Debt - Ellen Brown

Ellen Brown's Web of Debt - lots of resources about financial mismanagement and even TISA but precious little about the one ring of evil, GATS, yet.

Cry for Argentina: Fiscal Mismanagement, Odious Debt or Pillage?

Fiscal mismanagement or odious debt? Besides impossibility of performance, there is another defense Argentina could raise in international court – that of “odious debt.” Also known as illegitimate debt, this legal theory holds that national debt incurred by a regime for purposes that do not serve the best interests of the nation should not be enforceable. The defence has been used successfully by a number of countries, including Ecuador in December 2008, when President Rafael Correa declared that its debt had been contracted by corrupt and despotic prior regimes. The odious-debt defence allowed Ecuador to reduce the sum owed by 70 percent. In a compelling article in Global Research in November 2006, Adrian Salbuchi made a similar case for Argentina. He traced the country’s problems back to 1976, when its foreign debt was just under six billion dollars and represented only a small portion of the country’s GDP. In that year: An illegal and de facto military-civilian regime ousted the constitutionally elected government of president María Isabel Martínez de Perón [and] named as economy minister, José Martinez de Hoz, who had close ties with, and the respect of, powerful international private banking interests. With the Junta’s full backing, he systematically implemented a series of highly destructive, speculative, illegitimate – even illegal – economic and financial policies and legislation, which increased Public Debt almost eightfold to 46 billion dollars in a few short years. This intimately tied-in to the interests of major international banking and oil circles which, at that time, needed to urgently re-cycle huge volumes of “Petrodollars” generated by the 1973 and 1979 Oil Crises. Those capital in-flows were not invested in industrial production or infrastructure, but rather were used to fuel speculation in local financial markets by local and international banks and traders who were able to take advantage of very high local interest rates in Argentine Pesos tied to stable and unrealistic medium-term U.S. dollar exchange rates. Salbuchi detailed Argentina’s fall from there into what became a 200 billion dollars debt trap. Large tranches of this debt, he maintained, were “odious debt” and should not have to be paid: “Making the Argentine State – i.e., the people of Argentina – weather the full brunt of this storm is tantamount to financial genocide and terrorism. . . . The people of Argentina are presently undergoing severe hardship with over 50% of the population submerged in poverty . . . . Basic universal law gives the Argentine people the right to legitimately defend their interests against the various multinational and supranational players which, abusing the huge power that they wield, directly and/or indirectly imposed complex actions and strategies leading to the Public Debt problem.” Of President Nestor Kirchner’s surprise 2006 payment of the full 10 billion dollars owed to the IMF, Salbuchi wrote cynically: “This key institution was instrumental in promoting and auditing the macroeconomic policies of the Argentine Government for decades. . . . Many analysts consider that . . . the IMF was to Argentina what Arthur Andersen was to Enron, the difference being that Andersen was dissolved and closed down, whilst the IMF continues preaching its misconceived doctrines and exerts leverage. . . . [T]he IMF’s primary purpose is to exert political pressure on indebted governments, acting as a veritable coercing agency on behalf of major international banks.” Sovereign bankruptcy and the “Global Economic Reset” Needless to say, the IMF was not closed down. Rather, it has gone on to become the international regulator of sovereign debt, which has reached crisis levels globally. Total debt, public and private, has grown by over 40 percent since 2007, to 100 trillion dollars. The U.S. national debt alone has grown from 10 trillion dollars in 2008 to over 17.6 trillion today. At the World Economic Forum in Davos in January 2014, IMF Managing Director Christine Lagarde spoke of the need for a global economic “reset.” National debts have to be “reset” or “readjusted” periodically so that creditors can keep collecting on their exponentially growing interest claims, in a global financial scheme based on credit created privately by banks and lent at interest. More interest-bearing debt must continually be incurred, until debt overwhelms the system and it again needs to be reset to keep the usury game going. Sovereign debt (or national) in particular needs periodic “resets,” because unlike for individuals and corporations, there is no legal mechanism for countries to go bankrupt. Individuals and corporations have assets that can be liquidated by a bankruptcy court and distributed equitably to creditors. But countries cannot be liquidated and sold off – except by IMF-style “structural readjustment,” which can force the sale of national assets at fire sale prices. A Sovereign Debt Restructuring Mechanism ( SDRM) was proposed by the IMF in the early 2000s, but it was quickly killed by Wall Street and the U.S. Treasury. The IMF is working on a new version of the SDRM, but critics say it could be more destabilising than the earlier version. Meanwhile, the IMF has backed collective action clauses (CACs) designed to allow a country to negotiate with most of its creditors in a way that generally brings all of them into the net. But CACs can be challenged, and that is what happened in the case of the latest Argentine bankruptcy. According to Harvard Professor Jeffrey Frankel: “[T]he U.S. court rulings’ indulgence of a parochial instinct to enforce written contracts will undermine the possibility of negotiated restructuring in future debt crises.” We are back, he says, to square one. Better than redesigning the sovereign bankruptcy mechanism might be to redesign the global monetary scheme in a way that avoids the continual need for a bankruptcy mechanism. A government does not need to borrow its money supply from private banks that create it as credit on their books. A sovereign government can issue its own currency, debt-free. But that interesting topic must wait for a follow-up article. Stay tuned. (Ellen Brown - Web of Debt - http://ellenbrown.com )

Reviews of World Bank Group’s accountability mechanisms too important to be done in secret

You would be forgiven if you didn’t know that the International Finance Corporation (IFC), the World Bank’s private sector lending arm, was reviewing its accountability framework, including the effectiveness of its independent accountability mechanism (IAM), the Compliance Advisor Ombudsman (CAO) (see Observer Winter 2018). Despite the importance of the process, in particular given the numerous documented cases in which IFC financing has resulted in harms to communities (see Observer Spring 2015), the only publicly available information about the review is a brief announcement made in October by the IFC and the Multilateral Investment Guarantee Agency board of directors.

The Debts of Corruption by Patricia Adams

A global movement is asking Western nations to forgive 'odious' debt extended to despotic regimes. The cause has merit, but opposition is building. Tomorrow, a coalition of Canadian churches will present the government with one of the largest petitions in Canadian history – 600,000 signatures calling to cancel the foreign debt of heavily indebted Third World countries. Using biblical language, the Jubilee 2000 coalition asks the prime minister to free the oppressed of their debts by the start of the new millennium. So do the Pope, the Dalai Lama, other top religious leaders, and Jubilee 2000 coalitions formed in 155 countries to oversee this groundswell movement, which has collected seven million signatures to date, and still counting. The petitions will be submitted to the G7 leaders at their meeting in Cologne, Germany, this June. Sensing a political nightmare – as well as an opportunity to cleanse their books of embarrassing loans – the G7 governments, the World Bank, and even the International Monetary Fund are scrambling to produce debt relief proposals to appease the activists. The U.K. believes $50-billion in debt forgiveness is feasible (all figures in U.S. dollars); the U.S. proposal, led by Bill Clinton, aims for $100-billion

Advancing the Odious Debt Doctrine

by Ashfaq Khalfan, Jeff King and Bryan Thomas. McGill University legal scholars have completed an investigation into the Doctrine of Odious Debts, and concluded that it is both "morally compelling" and "relatively well supported under international law". Centre for International Sustainable Development Law (CISDL), Montreal, March 11/2003

Odious Debt (IMF)

"Similarly, Anastasio Somoza was reported to have looted $100-500 million from Nicaragua by the time he was overthrown in 1979. Sandinista leader Daniel Ortega told the United Nations General Assembly that his government would repudiate Somoza's debt, but reconsidered when his country's allies in Cuba advised him that doing so would unwisely alienate Nicaragua from Western capitalist countries. Some countries have attempted to confiscate and restitute funds that an ex-ruler salted away abroad, but with mixed results. For example, Nigeria recently recouped money from Sani Abacha's family, but the Philippines has little to show for its protracted campaign to repatriate Ferdinand Marcos's fortune. Moreover, any money that has been squandered is gone forever."

Can’t Pay Back, Won’t Pay Back: Iceland’s Loud No

Silla Sigurgeirsdóttir and Robert H Wade – Le Monde Diplomatique The people of Iceland have now twice voted not to repay international debts incurred by banks, and bankers, for which the whole island is being held responsible. With the present turmoil in European capitals, could this be the way forward for other economies? The small island of Iceland has lessons for the world. It held a referendum in April to decide, more or less, whether ordinary people should pay for the folly of the bankers (and by extension, could governments control the corporate sector if they depended on it for finance). Sixty per cent of the population rejected an agreement negotiated between Iceland, the Netherlands and the UK to pay back the British and Dutch governments for the money they spent to recompense savers with the failed bank Icesave. That was less resistance than the first referendum last spring, when 93% voted no.

Plan B: Declaration For a Democratic Rebellion in Europe

Democratic Europeans are fighting back against state capture: "A movement to place human rights, civil, political, social, economic, cultural and democratic rights, at the heart of the european project, as an intrinsic part of democracy."