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End odious debt, right now!

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This excerpt is taken from the interview «The Meaning of Seattle» with Noam Chomsky done by David Barsamian, probably published in July Y2K:

Q: Why do you say the debt crisis is an ideological construction?
A: There is a debt, but who owes it and who's responsible for it is an ideological question, not an economic question. For example, there's a capitalist principle that nobody wants to pay any attention to, which says that if I borrow money from you, let's say, I'm the borrower, so it's my responsibility to pay it back and you're the lender, so it's your risk if I don't pay it back. That's the capitalist principle. The borrower has the responsibility and the lender takes the risk. But suppose we were to follow that. Take, say, Indonesia, for example. Right now its economy is crushed by the fact that the debt is something like 140 percent of GDP. You trace that debt back, it turns out that the borrowers, were something like 100 to 200 people around the military dictatorship, that we supported, and their cronies. The lenders were international banks.
A lot of that debt has been socialized through the IMF, which means Northern taxpayers are responsible. What happened to the money? They enriched themselves. There was some capital export and some development. But the people who borrowed the money aren't held responsible for it, it's the people of Indonesia who have to pay it off. That means living under crushing austerity programs, severe poverty, and suffering. In fact it's a hopeless task to pay off the debt that they didn't borrow. What about the lenders? The lenders are protected from risk. That's one of the main functions of the IMF, to provide free risk insurance to people who lend and invest in risky loans. That's why they get high yields, because there's a lot of risk. They don't have to take the risk, because it's socialized. It's transferred in various ways to Northern taxpayers through the IMF and other devices, like Brady bonds. The whole system is one in which the borrowers are released from the responsibility. That's transferred to the impoverished mass of the population in their own countries.
These are ideological choices, not economic ones. It even goes beyond that. There's a principle of international law, which was devised by the U.S. over 100 years ago when it «liberated» Cuba, which means conquered Cuba to prevent it from liberating itself from Spain in 1898. At that time, when the U.S. took over Cuba, it cancelled Cuba's debt to Spain on the quite reasonable grounds that that debt was invalid since it had been imposed on the people of Cuba without their consent, by force, under a power relationship. That principle was later recognized in international law, again under U.S. initiative, as the principle of what's called «odious debt.» Debt is not valid if it's essentially imposed by force. The Third World debt is odious debt. That's even been recognized by the U.S. representative at the IMF, Karen Lissaker, an international economist, who pointed out a couple of years ago that if we were to apply the principles of odious debt, most of the Third World debt would disappear.

I have nothing to add but: End odious debt, right now!


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