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Resisting Debt

For years, southern movements have been resisting debt and the imposition of economic adjustment policies (SAPs) linked to external debt burdens and new credit agreements. Jubilee work in the south comes out of many of those struggles.

As the developing world declared its independence from colonial rule, newly emerging countries found themselves enticed into the debt trap with offers of big loans at very low rates of interest. Many countries in Latin America took up the offer and soon found that with interest rate rises and commodity price decreases they couldn't keep up the repayments.

Warnings
Countries in Africa, which proclaimed independence later, were forewarned about the pitfalls of the debt trap but were powerless to avoid it. Still lacking control over their own resources, they were desperate for credit to match the high expectations of their people and inevitably took the loans eagerly offered by governments, the World Bank and IMF. Before long the conditions attached to these loans became onerous to the people, who found they were not benefiting from this secret international lending process.

Riots
From Argentina to Zambia, initial resistance took the form of strikes and demonstrations when the first price rises for basic goods followed the implementation of various programs based on the adjustment models of the IMF and World Bank. One of the most bloody IMF riots took place in 1984 in the Dominican Republic when the price of basic foodstuffs doubled and the price of medicines increased fourfold. Four days of rioting left 112 dead and 500 wounded. In Caracas, Venezuela, riots broke out following the adoption of an adjustment program in 1989 which caused wages to collapse to less than half their 1980 level and prices to shoot up as subsidies were cut. Hundreds died (estimates vary widely from 300 to 1,500). Demonstrations, strikes and riots continued intermittently across various countries, highlighting the divisive and destabilizing effects of these policies.

As debt and adjustment have continued, a more co-ordinated people's response has emerged. Campaigning groups have formed in debtor countries and regions to raise awareness of how debt and structural adjustment underpin many of the economic and social problems people are facing. These groups campaign for debt cancellation, for radical changes in SAPs and the involvement of civil society - especially local non-governmental organizations - in dialogue on these policies.

Alternatives
In response to this mass opposition, policy-makers in the developing world have been putting forward various alternatives to the IMF's SAPs. For example, the African Alternative Framework to SAPs (AAF-SAP) was put forward in 1989 by the United Nations Economic Commission for Africa (UNECA) under the leadership of Professor Adebayo Adedeji who later became an Under General Secretary of the UN. Later adopted by the Organization of African Unity (OAU) and receiving the support of the UN General Assembly, debt cancellation was a key factor underlying the strategic approach of AAF-SAP. But the plan was ignored by the WB and IMF and Western leaders.

Demonstrations
With the belittling of international opposition to the IMF programs, by the 1990s they had been enforced upon most countries of the impoverished world. This triggered another wave of angry demonstrations against the imposition of VAT and cuts in health and education. These demonstrations were often violently crushed with the military arsenals of local and foreign governments.

The struggle continues in the developing world and there are positive signs, with some governments beginning to take notice of calls from civil society for default under the banner 'Can't pay, won't pay'. Only with increased links and solidarity between peoples in developed and developing countries can we break the stronghold the IMF-imposed blueprint, and implement real alternative strategies for the third world.

Around the Globe
In Africa, Asia and Latin America, people's movements are a growing force for change. They include Chimurenga, the African Network on Debt and Development, the Third World Network, the International Movement for a Just World, the Sao Paulo Forum and the Philippine Freedom from Debt Coalition. - the longest established and the most visible campaign in the developing world.

Women's organizations are also tackling structural adjustment and debt, uniting their efforts through groups such as Moyo Wa Taifa, the Pan-African Women's Grassroots Network - which aims to ensure that women understand how debt and structural adjustment underpin many of the problems they are facing and to develop ways to influence the government, IMF and the World Bank.

For more information on international groups working on debt go to: www.jubileesouth.org or www.jubileeplus.org.


NEXT > Bringing It All Back Home The debt crisis not only affects the poor. It also affects us.

PREVIOUS > Too Little, Too Late Since 1982 when the debt crisis broke, there have been various political initiatives to deal with the debt crisis.

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