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Representatives of social movements and civil society networks and organizations from Latin America and the Caribbean met in Quito - Ecuador’s capital - in the past month of August, to participate in two important events related to the issue of illegitimate debt. The hopeful atmosphere prevailing in Ecuador since the set-up of the Commission for a Comprehensive Audit of Public Debt (CAIC, in Spanish) by the government of president Rafael Correa, was the main fuel for both meetings.

Representatives of social movements and civil society networks and organizations from Latin America and the Caribbean met in Quito - Ecuador’s capital - in the past month of August, to participate in two important events related to the issue of illegitimate debt: the workshop ‘Resistance and Alternatives to Illegitimate Debt’ organized by the Jubilee South/Americas network and the first ‘Latin American and Caribbean Gathering of the Southern Peoples’ Alliance of Creditors of Historical, Social and Ecological Debts’. The hopeful atmosphere prevailing in Ecuador since the set-up of the Commission for a Comprehensive Audit of Public Debt (CAIC in Spanish) by the government of president Rafael Correa, was the main fuel for both meetings. Such measure, which evidences the determination of president Correa to lay sovereign foundations for the country’s economic and social development, is aimed at establishing the illegitimacy of public debt, both with regards to its legal and financial aspects as well as by evidencing the economic, social and ecological impact related to Ecuador’s high debt levels.

The workshop ‘Resistance and Alternatives to Illegitimate Debt’, which was organized on the basis of a working group, started with the presentation of case studies, showing the way illegitimate debt is defined in the different places and the metholodgy used in each case to prove the concept of illegitimacy. It was possible to account for the similar roled played by debt in the different countries, that is, as a pressure tool to impose liberalizing economic policies, such as programmes for the privatization of public goods and services, negotiation of treaties and free trade agreements, the execution of the so-called large development projects, among others. In this context, the aspects of illegitimacy related to the hegemonic development model stem from the contradiction of comparing the private ownership of benefits resulting from these policies and the socialization of costs and socio-environmental impacts caused by them. The Brazilian experience regarding Citizen Auditing, which has accumulated work and the development of a methodology for the analysis of debt official documents – letters of intent signed by the Brazilian government, loan agreements, etc. – was also presented during this workshop.

In view of progress made in the discussions on criteria and methodology to prove the illegitimacy of debt, it was also possible to advance in the discussion on the development of indicators that will contribute to show debt as an instrument of oppression and looting of Southern peoples. In this sense, the conclusion reached was that the work carried out during the workshop allowed to have a more practical approach to the discussion on the concept of illegitimate debt, which is necessary taking into account the urgent character imposed by the demands of the Ecuadorean Audit Commission – which besides was the focal point of most debates taking place during the workshop. Among the main obstacles faced by the Ecuadorean process, it is worth highlighting those related to methodological differences and, above all, to the hostile political atmosphere created by the reactions of sectors that are linked to the interests affected by the work of the commission.

On the other hand, the ‘Latin American and Caribbean Gathering of the Southern Peoples’ Alliance of Creditors of Historical, Social and Ecological Debts’, that took place after the workshop, was aimed at creating a political unit among social movements, networks and organizations within the region, by strengthening the notion that we, Southern peoples, are the real debt creditors, if we take into account all the looting, contamination and destruction of our nations, territories and cultures during centuries of relationship with the North.

Studies on the environmental impacts resulting from the execution of large projects were presented, such as the construction of hydroelectric plants, and the increase of predatory economic activities, like mining and oil extraction – emblems of the (under)development project underway in the region, since these are aimed at the external market rather than at the development of nations. The case of oil is emblematic of Ecuador: for the sake of generating foreign currency to be allocated to external debt payment, great pressure is exerted on the country to further the exploitation of its resources – a situation which is aggravated by the high level of oil prices in the international market. As a result of this, the exploitation in Ecuador’s Amazon basin keeps advancing, thus leaving huge socio-environmental losses, aggravated by the lack of stiff environmental regulations, which allows oil multinational companies to do in Ecuador that which is forbidden in their countries of origin.

The Ecuadorean Minister of Foreign Affairs, María Fernanda Espinosa, made a presentation at the event, highlighting the need to also audit the ecological debt owed to the country and reasserting the determination of the government of Ecuador to prevent such debt from increasing, by putting forward a proposal for the preservation of Yasuní Park, which implies the preservation of its underground oil reserves. The idea is to encourage the Ecuadorean society and the international community to contribute to the purchase of Ecuadorean bonds in order to preserve underground oil and protect the Yasuní National Park in exchange for at least 50 per cent of the amount that would be collected for oil extraction.

Finally, most people taking part in the two events shared the feeling that it had been an honour to discuss conceptual and practical issues on debt illegitimacy, in a country where the government is giving consistent signals as to the fact that it is indeed facing them. All those taking part in activities undertook the commitment to leave Quito with the mission to take the reports on the Ecuadorean case to their countries and promote a mobilization that would force the other governments in the region to adopt the same bold position as Ecuador, starting by the Global Week of Action against Debt to take place next October 14-21.

Gabriel Strautman is an economist at PACS – Institute for Alternative Policies for the Southern Cone, and member of Rede Brazil on Multilateral Financial Institutions.

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