Press release

Pakistan. Political parties call for Pakistan’s foreign debt cancellation, launch anti-debt movement

2 September 2010 by CADTM Pakistan , Labour Relief Campaign Pakistan


A Multiple Party Conference held in Lahore on 29th August resolved to launch a campaign against repayment of Pakistan’s foreign debts and organize protest rallies across the country. 28 political parties, trade unions, women groups and civil society organizations joined the conference. It was decided to initiate the campaign by rallies in Lahore, Karachi and Islamabad. The first rally will be organized on 2nd September in Islamabad. Senator Hasil Bezinjo, central leader of National Party pledged to raise the issue in Senate and present a resolution to demand government must refuse to pay the foreign debt.

The conference was chaired by Aman Kariaper and Ammar Ali Jan, general secretary LPP Lahore. In his opening remarks Ammar said the country has suffered a loss of Rs250 billion only in the agriculture and livestock sectors and the flood recovery cost may run into billions of dollar.

The conference began with presentation of Abdul Khaliq, focal person of the Campaign for the Abolition of Third World Debt (CADTM) Pakistan who argued that there are strong legal, ethical and political arguments for immediate suspension of debt servicing and refusal of further loans. He also presented historical precedents from Latina America and Africa to support his argument. Debt, in his view, is not merely a financial matter but also a political issue. He pointed out that debt incurred by dictators is considered under international law to be illegitimate debt and its burden should not be borne by future generations.

According to some estimates, he claimed, Pakistan’s debt has already been paid back at least eight times over. Hence, debt is an integral part of the system of re-colonization prevalent in the Third World. Pakistan is passing through the worst disaster, which hit millions of people amid destruction to agriculture and communications infrastructure besides 1,500 causalities and economic losses worth billions. “We think this is the time to announce the unilateral suspension of repayments of foreign debts instead of begging more aid for relief and rehabilitation.” He said Pakistan was paying about $3 billion as interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. on its $54 billion foreign debt. “Under the prevailing situations we have to think over coping with this severe debt domination, as various laws.

The Pakistani state is no more able to meet the fundamental human needs of its 20 million flood-hit population facing shortage of food, clothing, shelter and medicines, CADTM focal person told the audience. The country is unable to repay its debt responsibilities, international financial institutions and creditors should not expect from Pakistan to continue its debt repayments at the cost of its people already without adequate food supplies, shelters, schools, hospitals, courts and other public services, he asserted.

Aasim Sajjad Akhtar, academic, writer and activist of the Workers Party Pakistan, pointed out that the debt re-scheduling touted by the previous dictator as his big success in 2008 are going to fall due in 2015 and this risked taking our debt as a percentage of GDP GDP
Gross Domestic Product
Gross Domestic Product is an aggregate measure of total production within a given territory equal to the sum of the gross values added. The measure is notoriously incomplete; for example it does not take into account any activity that does not enter into a commercial exchange. The GDP takes into account both the production of goods and the production of services. Economic growth is defined as the variation of the GDP from one period to another.
to more than 70%, thus approaching the 80% limit recognized by the World Bank World Bank
WB
The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

as being unsustainable. He remarked that his group’s research indicated that up to 80% of Pakistan’s debt was incurred during dictatorial regimes. Elaborating on the political aspects of the campaign, Akhtar suggested questioning the rationale of the heavy military budget, which, even in this time of acute crisis, is not being reviewed. 

In the open discussion that followed, the debt issue and its political ramifications were debated all the delegates present. Jamil Omar, president of the Awami Jamhoori Forum, suggested setting up a monitoring mechanism staffed and run by the network of activist organized represented in the conference, to ensure transparency and accountability in the spending of the funds freed up from debt servicing. He was of the view that such an effort was an ethical imperative subsequent to the cancelation of the debt. 

Senator Hasil Bizenjo of the National Party fully supported the idea of debt cancelation as a means of challenging the prevalent political order and offered to present a motion in the Senate to discuss the matter. 

Director Human Rights Commission of Pakistan, IA Rehman urged the government not to get fresh loans to meet its flood-related needs. He said if someone wanted to help Pakistan, they should assist the country in donations or grants. “It is not just an issue of debt. The state is going to collapse as it is the need of the hour to restructure the entire state,” he said.

Abid Hassan Minto, renowned lawyer and president of the Workers Party Pakistan, presented a detailed analysis of the current socio-economic situation and suggested the formation of a committee composed of like-minded political and social organizations that would build a political movement based on the demands emerging from the conference. Instead of accepting new loan offers, Pakistan must stand for the total and unconditional repudiation of its foreign debt.  Time and again, countries facing tragedies, like Pakistan’s catastrophic flooding, are forced by International Financial Institutions and donor countries to mortgage Mortgage A loan made against property collateral. There are two sorts of mortgages:
1) the most common form where the property that the loan is used to purchase is used as the collateral;
2) a broader use of property to guarantee any loan: it is sufficient that the borrower possesses and engages the property as collateral.
their future as they borrow for relief and recovery efforts.  Thus, the tragedy is magnified for years to come. 

Speakers said that the recent floods represent the worst disaster in Pakistan’s history. The country has been devastated from the Northern Areas to its Southern tip. The State, stripped of its capacity to meet peoples’ needs by neoliberalism and militarism alike, has been found wanting—both in its longstanding failure to maintain existing infrastructure, and in its response to the calamity. 

Those who spoke at the conference include Raja Zulqernain advocate general secretary Supreme Court Bar Association, Khurshid Ahmad general secretary Pakistan Workers Confederation, Nasir Mansoor deputy secretary National Trade Union Federation, Nazar Mengal of Pakistan Trade Unions Defense Campaign, Karamat Ali director PILER, Lal Khan editor Asian Marxist Review, Ihsan Wain advocate general secretary Awami National Party, Former Senator Tariq Choudry of Tehreek Insaaf, Niasr Shah general secretary Labour Party Pakistan, M A Bhutta senior vice president Saraiki National Party, Ilyas Khan secretary Peoples Lawyers Forum, Manzoor Gilani president Istiqlal Party, Syeda Deep of IPSS, I A Rehman general secretary Human Rights Commission of Pakistan, Farooq Tariq coordinator Labour Relief Campaign, and Asad rehman of Sungi Development Foundation.  

The following points were included in the conference resolution: 
- Immediate suspension of repayment of external debt 
- Countries and donor institutions wishing to help Pakistan may do so in the
- forms of grants, not loans. No more new loans. 
- Military budget needs to be reviewed. 
- Setting up of an audit commission to conduct a public enquiry into Pakistan’s external debt. The commission should have constitutional cover. 
- Climate change reparations to be paid to Pakistan by industrialized countries 
Federal flood relief commission to be set up to oversee all relief, rehabilitation and reconstruction work in the wake of the floods.
- To contact SAARC secretariat for assistance and acceptance of Indian support without any conditions

Labour Relief Campaign Pakistan is comprised of 8 organizations; they include National Trade Union Federation, Women Workers Help Line, CADTM Pakistan, Labour Party Pakistan, Progressive Youth Front, Pakistan For Palestine, Labour Education Foundation and Pakistan Kissan Rabita Committee. LRC has been busy in organizing and raising funds for the flood victims and also launching a national campaign against payments of debts. 




CADTM

COMMITTEE FOR THE ABOLITION OF ILLEGITIMATE DEBT

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