PAY AND GRADUALLY WITHDRAW

François Kamaté (Debt For Climate in the Democratic Republic of Congo) speaks at the first International Conference on Climate Actions and Just Transition, held on April 4.

The notion of "illegitimate and illegal debts of the countries of the South" refers to loans contracted by these countries under unfair, opaque or fraudulent conditions, often to the detriment of local populations. For a number of years now, our Debt For Climate movement has been taking up the challenge of denouncing this type of practice and obtaining their partial or total cancellation in order to enable vulnerable communities to cope with the effects of global warming, while highlighting fair and self-determined solutions.

Pay and gradually withdraw: what does this approach mean?

For me, the idea of "pay and gradually withdraw" means: 

Acknowledging debts while reducing dependence: Some indebted countries are choosing to honour part of their debt while putting in place strategies to avoid resorting to excessive international debt.

Controlled repayment with an audit: An audit of debts makes it possible to distinguish those that are legitimate from those that are not. Repayment could then be limited to debts deemed to be just, while negotiating a gradual exit from the oppressive debt system.

Disengagement from dominant creditors: This means developing alternative financing mechanisms (South-South cooperation, local currencies, regional banks) to reduce the influence of international financial institutions (IMF, World Bank, etc.).

Why are some debts considered illegitimate or illegal?

Loans granted to corrupt regimes: Many debts were contracted by dictators or unelected governments, often with the complicity of international creditors. As in the case of the Congolese president Mobutu Sese Seko, to whom the IMF and the World Bank lent tens of billions of US dollars. 

Lack of benefit for the population: The money borrowed was sometimes used not for development but for arms purchases, personal enrichment or useless projects.

Unfair and asymmetrical conditions: Exorbitant interest rates, leonine clauses or the obligation to adopt austerity policies in exchange for the loan make these debts unfair.

Environmental and historical debt: Some believe that the debts of the countries of the South are derisory compared to the ‘ecological debt’ and the colonial plundering suffered by these nations.

Solutions and alternatives

Cancellation of illegitimate debt: Some countries, such as Ecuador (2008), have already used an audit to refuse to pay debts deemed unjust.

Negotiation and restructuring: Reduction of amounts owed, rescheduling of payments, or conversion of debts into local investments. 

Financial autonomy: Creation of local development banks, taxation of multinationals and development of resilient economies to avoid external indebtedness. Characteristic of this problem is the fact that several West African countries continue to use the CFA franc, or the soaring US dollar rate in the DRC, for example, where one dollar is exchanged for 3,000 Congolese francs. 

This approach would enable the countries of the South to recover their economic sovereignty, while honouring only those commitments that are really justified.