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Ong: Freeing the South from debt bondage

THE anti-debt movement will bring to the fore of the international community a range of issues that shape the massive poverty of people in the developing world or known as the South countries. These demands will be at the center of discussion in the upcoming International People's Forum versus the International Finance Institutions (IFIs) primarily the International Monetary Fund and the World Bank to be held in Batam, Indonesia.

One of the main calls is for the "immediate and 100 percent cancellation of multilateral debts as part of the total cancellation of debts claimed from the South, without externally imposed conditionality" and carried by the Jubilee South-Asia Pacific Movement on Debt and Development.

This call is hinged on the belief that the inhuman and destructive consequences of debt domination, which the IFIs play a major part in perpetuating, are evidence against the outrageously deceitful claim of these institutions that they are working for "poverty reduction" and "financing for development."

Debt relief initiatives of IFIs have to date covered only a very small part of the debt claimed from the South. Worse, these initiatives come with conditions that undermine the sovereignty of people to determine their own path of development, have proven harmful to livelihoods and the environment, and keep South economies tied to the interests of global private profit.

Cancellation of only a small part of the debt may release some funds that can be used for basic services but does not free the South from debt bondage. Debt cancellation must be 100 percent and must not be part and chained with conditions that defeat its true purpose.

And for immediate action, the debt movement in Asia-Pacific have highlight the especially urgent cases - most of Africa, Haiti, Nepal, Tsunami-hit countries and others recently devastated by natural calamities, countries ravaged by war, societies overwhelmed by HIV/Aids, and others experiencing severe social, financial and economic crisis.

Those who have been engaging in the issue of debt will agree that we must reject the international financial institutions' "debt sustainability" framework. There is no level of debt that is "sustainable" in a global economic system that is founded on domination and exploitation of the peoples, economies and resources of the South. This framework is a means by which these institutions justify maintaining the "indebtedness" of Southern countries.

The insistence on their "debt sustainability framework" is also a refusal to address the more fundamental question of the illegitimacy of the debt claimed from the South. Peoples of the South should not be made to pay for illegitimate debts -- debts they have not benefited from, debts that financed projects that have caused displacement of communities and damage to the environment, debts wasted on corruption or failed projects, debts contracted through undemocratic and fraudulent means, debts with grossly unfair terms and harmful conditions, odious debts incurred by dictatorships, debt contracted in the context of exploitative international economic relations, debts for which peoples of the South have paid many times over.

Though the financial debts claimed from the South are of staggering amounts, totaling more than US$2.3 trillion dollars, the North in fact owes the peoples of the South a far, far greater debt. It is the historical, economic, social, and ecological debt accumulated over centuries of plunder and exploitation by North with the collaboration of Southern elites.

The IMF and the World Bank should bear the costs of writing off debts owed to them by using the World Bank's loan loss provisions (valued at US$3 billion as of June 30, 2005) and retained earnings (valued at US$27 billion as of June 30, 2005) and IMF gold stocks. With the market price of gold surpassing US$600 an ounce, the IMF's 103.4 million ounces of gold are worth more than US$60 billion, rather than the US$9 billion recorded on the IMF's books.

Being a country with the kind of government that has exploited its people by means of mobilizing the financial assistance of these IFIs, I believe there is no reason that the Filipinos must not join in demanding from these institutions an unconditional debt cancellation.

There is no escape route for the Arroyo regime out of the quagmire of annual budget deficit without addressing the more pressing problem of the country's ballooning debt. These IFI's could not have amassed so much wealth and power if not for the resources that they have historically exploited from our nation. (Comments to tao.ssi@gmail.com)