Debt activists demand radical change

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EJN joined some 50 South and North debt activists from 35 countries in Collevecchio, Italy, in June 2009 to develop consensus on a Global Platform on Responsible Financing. Hosted by CRBM, the meeting took place against the backdrop of the G8 Finance Ministers’ Meeting in Lecce, Italy. The Platform is part of the wider agenda of southern and northern groups to end debt domination and build new financial and economic systems nationally and internationally.

Read MoreIt takes into cognisance that the establishment of sovereign, democratic, and responsible financial relations entails redressing the historically unjust and inequitable power relations between countries, and between elites and the majority, that for centuries have marked the lives of peoples, countries, and the environment.

This clearly implies reversing the autonomy, privileges and corresponding legal standing that have been ceded to capital.

It was acknowledged by participants that the current economic and financial crisis, along with the debt crisis that has plagued southern countries for decades, has its roots in colonial rule and a fundamentally flawed system that is driven by capital accumulation. This system gives primacy to the pursuit of profit and is based on the exploitation of people and environment.

Economic and political power relations between northern and southern countries, between global institutions of capital and the people of the South has given rise to illegitimate debt. It also involves the collusion and collaboration of southern elites and asymmetrical relations among southern countries. It also stems from the conflict between the dominant economic system and ecological justice and environmental rights.

The financial system – in its international and national articulations – has evolved into a complex architecture riddled with its own internal, inhuman, irrational and unjust logic, policies and practices. It was proposed, therefore, that this must be completely transformed.

Financial institutions should be regulated and subject to strict controls and public accountability. All aspects of banks’ operations should be regulated. Banks and financial institutions should be prohibited from making short-term speculative and damaging investments. The financial system, finance flows, and financial transactions and processes, should not lead to or reinforce exploitation and marginalization of the poor, violation of basic human rights, waste public resources, promote fraud and corruption and subvert people's sovereignty and right to self-determination.

The financial system must support and contribute to the development of the domestic capacity of economies to generate financial resources, moving away from “dependence” on aid and borrowings, and pursuing alternative sources of financing. The financial system should not lead to the creation and accumulation of illegitimate debt.

There should be public scrutiny of financial institutions and activities should be based on the above principles.

At the end of the meeting activists came up with a list of demands through a Declaration that covered the responsible and democratic financing standards to guard against a new wave of harmful lending to developing countries that is full of loopholes and flaws, and agreed that the announcements of official moves to fix them are inadequate and not to be trusted.

Transforming the financial system and establishing an alternative economic order should begin with preventing further damage, redressing the injustices that it has spawned, reversing the massive net outflow of financial resources from the South to the North, stopping loan-pushing by governments and financial institutions as a means for pursuing their economic, geopolitical and military interests, and ending the reliance and “dependence” of South governments on borrowing and aid.


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