Number 349, May 7, 1999.
Visit our home page: http://www.oneworld.org/sejup/
Dear Sejup readers,
Two weeks ago, two members of the Sejup staff attended a mock trial on
Brazil's external debt. The organizers of the forum invited economists,
lawyers, judges, human rights activists, politicians, indigenous, union
leaders, and unemployed people to give and hear depositions on the effects
of debt here in Brazil and in other countries. The jury then rendered
their verdict. This past week, the organizers forwarded a translation of
the verdict which we submit to you below. We also want to draw your
attention to an Action Alert forwarded to us this week from Global
Exchange. It follows the verdict from the Tribunal.
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FOREIGN DEBT TRIBUNAL
- VERDICT -
The FOREIGN DEBT TRIBUNAL met from April 26th to 28th , 1999, at the João
Caetano Theater in Rio de Janeiro, Brazil, the site where the Independence
hero and martyr, Tiradentes, was hanged. Some one thousand two hundred
people from various parts of Brazil and other countries around the world
attended and participated in the event. Organized by the National
Conference of Bishops of Brazil (CNBB) and Caritas, the National Council of
Christian Churches (CONIC), the Ecumenical Service Coordination Bureau
(CESE), the Popular Movements Center (CMP) and the Movement of Landless
Rural Workers (MST), and the Institute of Brazilian Lawyers (IAB), with the
support of CORECON/RJ, SENGE/RJ, SINDECON/RJ, IERJ, Koinonia and PACS, the
Tribunal convened to hear the case of Brazil's foreign debt and to
reinforce the Jubilee 2000 Campaign to cancel the debt of the most heavily
indebted, lowest income countries.
Brazil, along with other Latin American and Caribbean countries, is
considered an "emerging" nation with a medium income level. Its income
distribution profile, however, is among the worst in the world, with one
quarter of its population - that is, 40 million people - below the poverty
line. The Tribunal was thus called on to identify the relationship between
Brazil's foreign debt and this situation of injustice and misery. In
addition to pinpointing the factors that lead to and constitute the foreign
debt, and then cause it to grow out of all proportion, and to identifying
those responsible for it, the purpose of the Tribunal was to define
alternative policies and strategies of action for sustainable means to
surmount the crisis of foreign indebtedness and its social and
environmental consequences.
After four sessions, in which an extensive and diverse body of documented
material was submitted and testimony and declarations heard from Brazilians
and specialists from other countries - on the international financial
system, on Brazil's indebtedness, on illustrative cases of indebtedness in
other countries, and on prospects for action to confront and overcome the
Brazilian debt crisis - this People's Tribunal, constituted by
representatives of various sectors of the Brazilian public, reached the
following verdict:
WHEREAS
1. According to the studies and figures submitted to the Tribunal, the debt
of the poorest, most heavily indebted countries has already been paid, and
in current accounting terms, cannot be paid;
2. Since last rescheduled five years ago, Brazil's debt has increased from
US$ 148 billion at year end 1994 to US$ 270 billion in March 1999, while in
the same period, around US$ 126 billion was paid to foreign creditors. This
rate of borrowing is unsustainable to the point that almost all new
contracts are tied to servicing the existing debt, thus closing a vicious>
circle of indebtedness;
3. The USA's unilateral decision at the end of the 70s to raise interest
rates from their historic levels of between 4 and 6 percent to more than 20
percent, in only a few months, constituted a betrayal of good faith in the
contracts and, in addition to forcing debtor countries to take out new
loans in order to pay interest, entailed additional payments which meant
losses of US$ 106 billion for Latin America;
4. The fact that creditors impose a risk premium on debtors so as to cover
themselves against possible inability to pay entitles the latter to declare
themselves insolvent without onus;
5. Governments aligned with major corporations and banks with foreign debts
have made a practice of nationalizing private foreign debt and socializing
the related costs, thus committing public funds still further to servicing
the foreign debt;
6. Strategic public enterprises have been used as instruments for excessive
borrowing, thus compromising their financial health and capacity for
investment, which has served as a pretext for later privatization;
7. There exists a clear connection among foreign debt, excessive internal
public borrowing and efforts to attract short-term foreign capital, which
is subjecting Brazil to a policy of extremely high interest rates;
8. As the Brazilian government regards the financial system as an absolute
and an end in itself, it has sacrificed the part of the budget earmarked
for social policy spending and for invigorating the domestic economy in
order to keep financial debt payments up to date. As a result it has
abandoned health, education, policies for employment, for the demarcation
of indigenous lands and to ensure conditions for the survival of indigenous
peoples, to give due value to the elderly and children, to carry out
agrarian reform, and to conserve and restore the environment;
9. The IMF's economic and adjustment policies have proven disastrous for
countries subjected to them and serve to increase still further those
countries' debt and other foreign liabilities, thus constituting a
moratorium without end on the social and environmental debts, whose
creditors are our children, working women and men of the cities and
countryside, blacks, indigenous peoples and Nature;
10. The USA manipulates the UN, WTO, IMF, World Bank and NATO to suit its
strategies to dominate and control the peoples of the world;
11. Brazilian public borrowing has always favored the interests and
privileges of the dominant elites;
12. Brazil's excessive indebtedness was generated particularly in the last
three decades, which were marked by 21 years of dictatorship and by a
transition to civil governments which completed and connived with the
surrender of economic policy to financial capital;
13. This indebtedness was constituted by dictatorial - and thus
illegitimate and anti-popular - governments, and their creditors, besides
serving as their accomplices, were aware of the risks attendant on these
loans;
14. The expansion of the debt is connected with these élites' connivance
with foreign private, governmental and multilateral financial institutions;
15. The foreign debt constitutes an ongoing violation of the International
Covenant on Economic, Social and Cultural Rights drawn up by the UN on
December 16, 1966, which calls for recognition of each nations' right to
self-determination, to freely pursue its economic development and dispose
freely of its natural wealth and resources, and also requires that in no
case may a people be deprived of its own means of subsistence;
THE MEMBERS OF THE FOREIGN DEBT TRIBUNAL HEREBY FIND UNANIMOUSLY THAT:
Brazil's foreign debt was constituted in breach of Brazilian and
international law, and without consulting the Brazilian public. It has
favored the élites almost exclusively to the detriment of the majority of
the population and is prejudicial to national sovereignty. It is therefore
ethically, legally and politically unjust and unsustainable. In real terms
it has already been paid and persists only as a mechanism for subjecting
and enslaving society to the financial power of usurers and globalized
capital, and for transferring wealth to the creditors. For these reasons,
this Tribunal condemns the Brazilian debt process, which entails
subordination to the interests of international financial capital and the
wealthy countries, backed by the multilateral organizations, as grossly
unjust and illegitimate. It holds the dominant élites responsible for the
excessive borrowing and for having abdicated from any development plan of
Brazil's own. It holds responsible the governments and politicians who
support and further plans to assign Brazil a subordinate position in the
globalized economy. It holds responsible those economists, jurists, artists
and intellectuals who provide them with technical and ideological
underpinning. It holds responsible the dictatorship of the major media that
endeavor to legitimize the debt and stifle debate over alternatives.
It also hereby resolves to communicate this decision to Brazil's
legislative, executive and judiciary authorities at the federal, state and
municipal levels, that they respect it for the legitimacy of this
Tribunal's structure and social function.
Taking upon itself the hope embodied in peoples' struggles for alternatives
in their livelihoods, social relations, and economic and social
organization, this Tribunal proposes to all the women and men of Brazil the
following commitments and strategies for action:
* The union of all peoples in favor of a general and unrestricted canceling
of the foreign debts of the most heavily indebted poor countries, the
return of the wealth pillaged from them, with no conditions attached other
than that the resources so saved be applied to paying off the social debts
under the oversight of society itself, and that the human rights of all
citizens be respected in full.
* An audit of the public foreign debt and of the whole process of Brazil's
indebtedness, with the active participation of civil society, so as to
ascertain in accounting and legal terms whether there is still debt to be
paid, from whom it should be collected, and to establish democratic rules
for overseeing borrowing.
* A sovereign moratorium, denunciation of the Agreement with the IMF and
redefinition of the debts in line with the audit results and with
strengthening national sovereignty.
* A development policy centered on the rights of the person and society,
built chiefly on Brazil's own material and human resources, and going
beyond the current logic and practice of irresponsible borrowing.
* Firm exchange controls, which equip the government to restrain
speculation and re-encourage investment in production, including effective
mechanisms to control and inspect all the illegal forms in which Brazilian
and foreign currencies, and goods in general, enter and leave the country.
* The re-nationalization and democratization of strategic enterprises.
* The rescheduling of state and municipal debts, with the resources so
saved tied to repayment of social and environmental debts, and the
refounding of Brazil's federative pact on a democratic, participatory basis.
* Reinforcement of mobilizations and campaigns such as ATTAC, which demand
that mechanisms be set up to regulate and tax the circulation of
international speculative capital, with a view of creating a fund earmarked
for restoring those most impoverished to a decent life.
* The union of Latin America and the Caribbean peoples in support of common
alternative policies and strategies for the continent, in order to confront
together the vicious circle of indebtedness and the other factors of
impoverishment and subordination that afflict the whole continent.
* Participation of the Jubilee 2000 Campaign, the World Council of Churches
and other Brazilian and international institutions, in a mobilization that
will lead democratic States to propose to the UN General Assembly a joint
suit be brought before the International Court of Justice at The Hague to
judge both the processes that gave rise to and hypertrophied the foreign
debt of the heavily indebted impoverished countries, and those responsible.
This Tribunal is a symbolic milestone on a long march. It therefore calls
on all Brazilian men and women to join, in hope and without fear, in the
initiatives that will grow out of this judgement and to continue to take
their stand, in the streets and public places, until we manage to make
Brazil truly a motherland for us all, one that offers to all the means to
live a life of dignity and full citizenship.
This is our decision. Let it be published and proclaimed. Subscription is
hereby authorized to none but all men and women of good faith.
Rio de Janeiro, Tiradentes Gallows, April 28th, 1999
ACTION ALERT
World Bank Project Will Subvert Brazilian Constitutional Land Reform
Five million families of landless workers in Brazil are entitled to land
under the existing land reform measures of the Brazilian constitution.
Through a popular movement known as the MST (Movimento de Trabalhadores
Rurais Sem Terra -- Movement of Rural Landless Workers) over 200,000
families have organized and occupied idle land, receiving legal ownership
and subsidized government loans. The Brazilian government and the wealthy
land owners are not happy about this!
The World Bank plans to provide $1 billion to create a "land bank" (Banco
da Terra) that, while claiming to support land reform, actually subverts
it. The terms of the WB-sponsored plan are far worse for those receiving
the land and offer a windfall for large estate owners.
In an attempt to dismantle successful resistance, the World Bank and
Brazilian government are offering up this alternative mechanism. They are
offering $1 billion and are beginning with a pilot project called Cedula da
Terra. They hope to draw in landless families, pay cash to large landowners
and then strap the families with high credit terms and no subsidies to fund
their productive activies (seeds, farm equipment, etc.) They reward the
landowners and penalize the poor.
The MST, the Workers Party and others in Brazil are asking U.S. groups for
support.
What You Can Do:
Write letter to WB President James Wolfensohn demanding that the
inspection panel judiciously inspect the Cedula da Terra pilot project and
stop this subversion of the Brazilian constitutional land reform.
Fill out the sample letter on our web page (www.globalexchange.org) to
automatically send a fax to World Bank President James Wolfensohn.
Sample Letter
James Wolfensohn
President, The World Bank
1818 H Street, N.W.
Washington, DC 20433
Dear Mr. Wolfensohn,
We are extremely concerned about the impact that the World Bank's
project "Cedula da Terra" will have on the living conditions of
landless rural workers in Brazil. It is fundamental to the success
of such projects to include the participation of affected people and
organizations in the design of the project.
The Brazilian farm workers were never consulted about the creation
of the Cedula da Terra project. The negotiations only included
World Bank representatives and the Brazilian government. As a result,
we believe the project will be extremely prejudicial to the agrarian
reform process in Brazil. It does not seem that it was designed to
create the "World Free of Poverty" that the World Bank claims to
promote.
The Cedula da Terra project relieves the Brazilian government
from its responsibility to implement massive agrarian reform. At
the same time, it replaces the current mechanisms that landless
farmers have to acquire land, hurting the organizing efforts of
these workers in their struggle for democracy. The conditions
offered by the World Bank--such as high interest rates--will make
it impossible for landless farmers to pay back their loans. As a
consequence, these farmers will lose their land.
In reality, the program will only benefit the large landowners,
especially the ones who do not contribute to improving social
conditions in the countryside--those who do not protect the
environment, who use their land for speculative purposes instead
of production, and who do not respect labor rights. In sum, the ones
who do not fulfill their social function as established by the
Brazilian Constitution.
If the World Bank is concern with the welfare of low-income
Brazilians and wants to promote sustainable development in that
country, it should conduct an evaluation of the project, as
recommended by its Inspection Panel and the most important farm
workers organizations in Brazil.
In solidarity with Brazilian landless farmers, we fully support the
implementation of the agrarian reform project as mandated by the
Brazilian Constitution as a way to promote sustainable development
and to improve living conditions in that country.
We ask the World Bank to suspend the "Cedula da Terra" project
and allow for the Inspection Panel to evaluate its impact. We
believe the project contradicts the regulations imposed by Brazilian
law and does not allow for the complete realization of an effective
agrarian reform in Brazil.
Sincerely,
The reproduction of this material is permitted as long as the source is
cited.
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