International investors
have imposed their will on the world by means of a creditors cartel""embodied
in the IMF, the World Bank, the G-7/8, and their creatures and allies.
They have imposed cruel and destructive policies on the people of debtor
countries. The elites that control most debtor governments have often
cooperated with the foreign investors and enriched themselves. Now the
people of Argentina have said: Enough! As long as Argentines act alone,
the creditors cartel will have the power to impose further cruelties on
the max "and they're preparing to do so. But there's a strategy for
turning the tables on the moneylenders.
Popular organizations from all over the world are meeting at the end of
January in Porto Alegre, Brazil. They have the opportunity to fire a (non-violent)
shot that will be heard around the world: The launching of a global campaign
for a debtor's cartel. It is common knowledge among lender sâ€"but
a secret they keep from borrowers â€"that creditors are
dependent on their major debtors for their own well-being. If debtors
can't or won't service their debts, creditors are left holding the bag.
But the only way today's debtor countries can take advantage of such dependence
is to break out of the current framework in which each debtor country
approaches its problems separately, as a matter between it and the creditors
carte .Just as a worker is individually powerless before a boss but strong
in a union with other workers, so today's debtor countries need to work
together to limit their domination by international creditors. Once debtor
countries begin dealing collectively with their creditor's" summed
up in the phrase debtors cartel" the result could be a radical shift
in the global power configuration.
The threat of a collective moratorium on debt repayment provides the implicit
equivalent of a strike. It provides a way to block the kind of reprisals
by the debtors cartel that are now being threatened against Argentina.Of
course debtor governments and the elites that control them are unlikely
to pursue such a strategy on their own initiative. But the emergence of
a global justice movement, combined with the growing rejection of neoliberalism
among the people of the debtor countries, opens new possibilities for
pressuring them to do so "or for replacing them with others who will.
Here's a resolution embodying that strategy that anyone is welcome to
borrow or adapt.
RESOLVED:
1. International investors have cooperated through a united front "
the IMF, the World Bank, the G-7/8, and their minions. But they have required
debtor countries to negotiate with them one by one.
2. The effect is a drastic imbalance of power that has devastated both
poor countries ( Less Developed Countries" or LDCs ) and industrializing
ones( Newly Industrialized Countries or " NICs).
3. While debtor country governments and elites have too often cooperated
with foreign investors for their own enrichment, Argentina has shown that
popular movements can force policies to change. But governments that abandon
neoliberal policies face the threat of devastating reprisals from the
creditors cartel. The solution is debtor solidarity.
4. We demand that the creditors and those who represent them, including
the IMF, the World Bank, and the G-7/8, agree to bargain with debtor countries
collectively.
5. We will campaign for debtor governments to develop a united front with
each other and with popular movements to press this demand.
6. We will campaign for them to back this demand with the threat of a
joint moratorium on debt payments. Such a moratorium should continue until
the creditors and their representatives agree to negotiate with the debtor
nations, in consultation with popular representatives, on an agenda that
includes the following:
Capping the percentage of export earnings that can be required for debt
service. This is essentially a way of refusing to run debtor countries
economies to service their debts rather than to meet the needs of their
people. Eliminating loan conditional ties that prevent countries from
expanding domestic markets, providing credit for their farmers and businesses,
and using what resources they have to develop their own economies rather
than paying interest to the global rich.
Canceling the debt of the poorest countries.
Providing international support for nationally-imposed capital controls
that limit the flow of speculative capital into and out of countries.
Reducing the power of the IMF and other international financial institutions
and substituting a system of overlapping organizations representing particular
regions and particular functions, such as environment and health, coordinated
through the UN system.
Replacing IMF rescue operations with an insolvency mechanism for indebted
countries, with arbitration panels representing both debtors and creditors,
which would take into account the need for social safety nets to protect
a minimum of human dignity of the poor.
Implementing an international Tobin Tax on flows of speculative hot money
to reduce international financial volatility and provide resources for
poorer countries.
Such an idea is already in the wind, promoted by groups like Jubilee South,
whose South-South Summit Declaration stressed and the need for collective
action among the Southern and the formation of a strategic alliance to
unite on issues like a debt repudiation. Similarly, representatives of
popular organizations in 13 African countries meeting in Lusaka, Zambia,
called for collective repudiation of illegitimate foreign debt payment
and linking our arms across the borders to create pressure on our leaders
to establish a Debtors' Cartel.The idea has also been widely discussed
in the PT, the Brazilian party whose most visible leader, Lula, is the
current front-runner in the upcoming presidential election.
Next steps can be as simple as adding such debtor country cooperation
to local and national movement programs; including it in the demands of
mass actions opposing structural adjustment; and injecting it in to election
campaigns, demanding that parties claiming to oppose IMF policies pledge
such international cooperation.
Such an approach also provides a natural linkage to workers in the North.
IMF conditional ties forced countries such as South Korea, Brazil, and
Russia to export manufactured goods at rock-bottom prices based on depression-level
wages. This has contributed substantially to mass layoffs and unemployment,
especially in U.S. manufacturing. A joint attack on structural adjustment-style
policies and support for growth driven by domestic demand in Third World
countries could serve as the basis for a powerful alliance between First
World labor and a wide range of forces in the Third World.
Even the threat of a concerted default is a financial atom bomb; brandishing it might change the entire dynamics of global financial relations.
Jeremy Brecher, Tim Costello, and Brendan Smith are the authors of Globalization
from Below: The Power of Solidarity (South End Press) and the producers
of the video documentary Global Village or Global Pillage?