Global Policy Forum

By Rici Lake

Foreign debt is a tool for the economic domination of the Third World by large corporate interests, and the corporate agenda is now entering a dangerous new phase: the exchange of territory for debt repayment.

That was the message delivered this weekend at a World Social Forum panel on corporate domination by Council of Canadians national chairperson Maude Barlow. Barlow, whose book about global corporate domination of water supply — Blue Gold – was being launched in its Portuguese translation, warned that Argentina may be the testing ground for this new strategy.

In the 1980s, she said, debtor countries were forced to privatize assets in order to repay the International Monetary Fund (IMF). More recently, the debt burden has been used to force poor countries to open their services market to multinationals. And, now, with debts still unpaid and unpayable, countries will be forced to sell off forests, crown lands and water supplies.

A handful of big water companies — "the most ruthless, the most heartless and the most greedy" of the multinationals — now control water distribution in much of Latin America, she said. "In the guise of delivering water to the poor, they are building an enormous water cartel."

"The multinationals are moving in like vultures," Barlow said, and not just in water supply but in the provision of other basic services such as health care. She cited a World Bank study that estimated the potential value of privatized health care systems worldwide could reach $5 trillion (U.S.).

Sharing the panel with Barlow were Lidy Nacpil of the Phillipines, representing the southern anti-debt movement Jubilee 2000; Cuban economist Osvaldo Martinez; and Susan George of the French anti-globalisation coalition ATTAC. Their message was consistent: so-called developing countries are being crushed by the imposition of artificially inflated and illegitimate debt repayments.

"We assert that the debt is illegitimate," said Nacpil. While the IMF asserts that the debt crisis is the result of "inefficient economies and corrupt governments," she said, the debt burden has actually been maintained by debt restructuring and relief schemes which serve to force countries to continue to borrow more and is used by the World Bank and the IMF to impose neoliberal economic policies on third world countries. The latest of these schemes, the so-called Sovereign Debt Restructuring Mechanism (SDRM), "actually protects the interest of private creditors and gives the IMF more power over economies."

The debt has actually been repaid many times over, she said, although it remains on the books as a result of enormous debt servicing charges. "The so-called creditors actually owe the South, and must be made to pay restitution and retribution."

Martinez, the president of Cuba's economic council, described the world financial system as a "weapon of mass destruction which is no subject to any form of international inspection," responsible for "provoking more deaths, disease and hunger than many wars."

He pointed out that the world's largest debtor nation is the United States, whose debt burden is so huge "that it should be first in line for the IMF's Structural Adjustment Programs." In addition, he said, the majority of the mandatory financial reserves which debtor countries must maintain to continue to qualify for IMF loans are actually deposited in U.S. banks, where they are used, in part, to finance U.S. corporate loans. Consequently, he said, third world countries are actually providing economic development assistance to the United States.

"It is not enough to reform the IMF," Martinez said. "It must be disappeared." He called for a new international organization with the mandate to regulate the international financial market through such measures as a tax on speculation, control over hedge funds and other speculative instruments, and the guarantee that countries would be free to establish their own exchange rates. He also suggested the formation of an international association to receive and hold Third World financial reserves, which could allow for the use of some of this money as the basis for loans within the Third World.

Martinez challenged rich countries to spend less on luxuries and more on human needs. The amount spent annually in the North on pet food, cosmetics and jewellery, he said, is more than three times that which is necessary to guarantee education, clean water and reproductive health care to all those who currently lack these services.

The panel was closed by Susan George, who delivered a passionate call to action against the global corporate system. "They [multinationals] are saying ‘we can regulate ourselves.' We say the opposite. They are very good at getting what they want,... and they want everything."

George warned participants that the struggle was not going to be easy. "Persuasion is not going to get us anywhere," she said. "Wealth and power never willingly share." However, she said, the strength of the new global movement is its unity and its commitment to a non-violent strategy. She urged participants to continue to make new alliances, to avoid traditional power structures, and to "resist provocation at all cost, and never reproduce the violence of our adversaries."

Despite the dangers and difficulties ahead, she said, there is much room for hope. In only four years since the first big anti-globalisation protest in Seattle, the movement has grown and matured to an amazing extent. "The ambition to build a truly global social movement is present for the first time," she said. "I am more optimistic than I have been in thirty years."

George ended her speech, and the discussion, on a very personal note. "In 2004, much to my surprise, I will be seventy," she said, "and I don't know how much longer I can continue to contribute to this movement." However, she said, the movement has grown and solidified itself to the point where no individual or group is essential. Almost breaking into tears, and to a standing ovation, she affirmed her faith that "another world is possible."

Rici Lake is a Canadian activist currently living in Perú where he works for an international NGO. Watch for more rabble in Brazil — voices from Porto Alegre, this week on rabble.

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