Debt, reparations and a new form of power

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How do we move from economies of indebtedness towards financing sustainable and socially just development? The United Nations has argued that US$80 billion per year for 10 years would: "guarantee to every human being living on this planet access to basic education, basic health care, adequate food, drinking water and sanitation, and for women, gynecological and obstetric care." This proposal is significant in a world where -- according to the Canadian International Development Agency -- nearly 800 million people do not have sufficient food, and approximately 500 million suffer from chronic malnutrition; roughly 130 million children of primary school age and 275 million of secondary-school age do not attend school; and in developing countries, the maternal mortality rate, at more than 350 per 100,000 live births, is nine times as high as in OECD countries. The challenge that debt activists face is that Northern, neoliberal, funding regulations have not produced a financially solvent form of development.

One strand of the global justice movements -- perhaps the largest -- emphasizes anti-imperialism: for this cohort, neoliberal globalization is simply the latest manifestation of the Global North's (North America and Western Europe) perpetual desire to colonize the Global South (Asia, Africa, Latin America). Anti-imperialist groups -- such as the Committee for the Abolition of Third World Debt -- claim that under the current system, capital does not serve Southern social needs; instead, the South serves Northern economic needs. An example of this is that the South sends $200-250 billion a year in debt repayments to the North. This is an astounding figure in light of the UN's point that US$80 billion a year would be enough to fund a financially solvent basic-needs strategy. Many social movements believe that the "developed regions" have exacerbated global destitution by depriving developing countries of the funds they need to finance development.

Activists believe that the international financial institutions have assaulted Southern states: Structural Adjustment Programs (SAPs) have been "an imperial policy instrument" implemented by the World Bank and the International Monetary Fund (IMF). These programs have privatized key areas of the economy such as natural resources, health and education. In response, many call for the return of these privatized areas to the public sector. As well, social movements want to ensure democratic control over both external indebtedness and new sources of funding. The anti-imperialists participating in the Latin American Left in Brazil, Bolivia, Ecuador, Argentina and Venezuela call for a new kind of Southern state that will not only regulate Northern countries, but itself ideally be democratically regulated by the public.

In order to curtail Northern states' economic domination of the global economy, anti-imperialists emphasize regional economies that encourage South-South relations to emerge. They aim for a polycentric world-system that is comprised of powerful Southern political-economic blocs. Examples of these would be regional organizations such as the Union of South American Nations (UNASUR) or progressive versions of the Association of South East Asian Nations (ASEAN).

Above all, the movements demand debt cancellation as the prerequisite for genuine Southern empowerment: if the debt were cancelled, funds would be available to finance the basic need requirements of the Global South. What is specific to the anti-imperialist viewpoint -- and not necessarily so with Northern progressives -- is that they believe that debt should first be annulled for historical rather than contemporary reasons. Many anti-neoliberal activists argue that debt cancellation policies should be aimed first at the poorest countries rather than waiting for all debt to be canceled. In contrast, anti-imperialists assert that international debt should be repudiated: all payments to the North should be stopped and any mention of Southern debt liability must include a discussion of reparations for colonialism's historic social, ecological and economic appropriation. The anti-imperialists note that we always discuss the debt but rarely the loot, that is, we should consider the reparations owed by Northern imperialists to the South -- which far outweighs the money owed by the latter to the former.

The challenge of debt is inhibited by how it is imagined: the language by which we define a problem shapes the outcome of the debate. The discourse around debt cancellation is often framed as an issue of charity from the North to the South. This "debt forgiveness" framework -- emanating especially from religiously inspired organizations in the North -- may obscure the history of imperialism by unintentionally implying that responsibility for Southern underdevelopment lies solely on the shoulders of Asians, Africans and Latin Americans. Instead many argue that the North owes the South: debt cancellation is partial economic and ethical compensation for centuries of robbery.

One point we can add to the anti-imperialist framework is that over the past generation we have witnessed an emerging "North" within the South and a growing "South" within the North. The austerity agenda that the International Monetary Fund and its proponents are attempting to impose on Greece is one example of a new form of authority that extends the previous one onto potentially ripe internal terrain.

Thomas Ponniah was a Lecturer on Social Studies and Assistant Director of Studies at Harvard University from 2003-2011. He remains an affiliate of Harvard's David Rockefeller Center for Latin American Studies and an Associate of the Department of African and African-American Studies.

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