#41 / september 2000

La Lettre

FIDH Newsletter

Editorial

Chile: The historical decision of the Supreme Court

Santiago, September 1973. Who would have thought that 27 years later Augusto Pinochet, who had just seized power following a military coup d'etat, would have to account for his actions before Chilean Justice for the crimes committed during the 17 years of his dictatorship? Certainly not the thousands of people held and tortured in the Santiago Stadium, the corpses floating in the Rio Mapocho which flows through the Chilean capital or Victor Jara the singer whose hands were cut off. So many images came back to us when the Supreme Court of Chile made an historical decision by confirming the terms of the order of the Santiago Court of Appeal which lifted parliamentary immunity of Augusto Pinochet. This decision was in some way a form of posthumous judicial homage to these thousands of victims, which was made possible principally as a result of the persistent and tireless work of the Chilean organisations for the protection of human rights, to which due praise must be given. These organisations were accompanied in their fight by the international community for the protection of the rights of Man.

Consequently, a new particularly encouraging page can be written in the history of the legal fight against impunity, the result of complementarity between international criminal justice and Chilean justice. It was after a decision by the UK House of Lords - an essential stage in the affirmation of the principal of universal competence and the fight against impunity at international level - that at the beginning of 1999 Chilean judges were considered authorised to initiate the national judicial process of arresting, detaining and trying many senior officers and Chilean servicemen responsible for crimes, assassinations and torture. Since this judicial process has been initiated in this way, it was no longer possible for Chilean justice to exempt Augusto Pinochet, the principle person responsible, as the decision of the Supreme Court of Santiago testified.

Finally, the judgement of the highest Court in the land constitutes further proof of maturity of Chilean society in its delicate transition to democracy. However, the democratic evolution of Chile must no longer be limited to a simple compromise between the military and civil authorities as was the case after 1989 and today's leaders should be encouraged to pursue this work of democratisation by drawing up a new constitution replacing the current one prepared by Augusto Pinochet in 1980 with the sole object of perpetuating his dictatorship.

Claude Katz
FIDH Secretary General


Contents

CURRENT EVENTS
>>The Democratic Republic of the Congo
Russian puppets à la Congolese

SPECIAL SUPPLEMENT
>>Reforming the International Financial Institutions

CURRENT AFFAIRS

>> The Democratic Republic of the Congo

It is not easy to unravel the tangled threads of the Congolese problem. The Congo, the underbelly of the African continent, is a country with immense mineral and forest wealth and a geographical situation which should have made it one of the driving forces of the continent. The former Zaire has been ravaged by independence achieved through violence and asphyxiated by 32 years of totalitarian rule by Mobutu, followed by three years of dictatorship under Laurent Désiré Kabila. The Democratic Republic of the Congo (RDC) is today a badly leaking ship which every day sinks further into the abysses of poverty and strife.

Kabila came to power in 1997 as a result of the largely armed support from the Rwandan and Ugandan authorities. Today he is supported by the Zimbabwean, Angolan and Namibian forces but on his eastern flank is an armed rebellion led by his former allies. These movements are however themselves divided. The Rwandans are now opposed to Kabila and to the Ugandans, while at the same time they are still fighting their own opponents; they control approximately the South East part of the country. The Ugandans themselves control the North East part of the RDC and now support three armed movements. The objective of one is to "overturn" Kabila, another is to protect the Ugandan frontiers from armed movements opposed to Museveni - and against certain threats from Rwanda -, and the third to appropriate the wealth of the region. Finally, each of these rebel groups is threatened by partition. To this confused situation should be added a "transverse" movement by traditional fighters -- the Mau Mau . Although at present the last are still isolated, they must without doubt be reckoned with in the near future.

Report prepared by Gregoire Lechat

Russian puppets à la Congolese

The former Zaire is breaking up more every day. Since 1998 2 rebellions, one an armed uprising by Rwanda, the other by Uganda, have divided up more than half the country. The territories which they occupy are however themselves divided. The Congolese Group for Democracy (Goma RCD), which is supplied with arms by Rwanda, only has real control over the principal towns in the east of the RDC. In the case of the three movements supplied with arms by Uganda, in the North and the North-East of the Democratic Republic of the Congo, each apparently has different objectives. The Congolese Liberation Movement (MLC) of Jean-Pierre Bemba, the headquarters of which are based on Gbadolite in the north of the RDC, is the only one of the three which is still fighting the loyalist army of President Kabila. The young National RCD of Roger Lumbala, which has been in the Bafwasende region for two months, apparently allows Uganda to claim the town of Kisangani and to mine diamonds. Finally, the RCD Liberation Movement of Wamba dia Wamba, which occupies the North-East, now appears to serve as the buffer area to the Ugandan frontier. Since the Goma RCD took Kisangani two months ago, the leaders of the principal rival rebel movement, the RCD Liberation Movement, have felt somewhat isolated in the North-East of the Democratic Republic of the Congo. By losing Kisangani they had in fact also lost the possibility of influencing the future of the country. Hemmed in between the regions held by Rwanda and those held in the North by the Congolese Liberation Movement of Jean-Pierre Bemba, the RCD ML is now more concerned with ensuring the safety of its Ugandan neighbour than fighting the Kinshasa regime. With the support of the Ugandan forces, it forestalls the threats of attack by the Goma RCD and fights the movements opposed to the Museveni regime which are based in the Mountains of the Moon to the east of Butembo. One of the most important military RCD ML positions is consequently at the frontier between the two rebel movements in North Kivu 15 km to the South of Kanya-Bayunga where, fearing an invasion by the Rwandan Army, two months ago the Ugandans brought up tanks, anti-aircraft batteries and a considerable amount of heavy artillery.

A fragmented rebellion

The loss of credibility by the RCD Liberation Movement at national level resulting from the military support by Uganda has been further accentuated by the division which has increased within this movement. Thus, on 10 August last Professor Wamba dia Wamba dismissed two of his principal assistants, Mbusa Nyamwisi and John Tibasima Mbongemu accusing them of having organised a mutiny of an ethnic nature at Bunia. Later Mbusa Nyamwisi considered withdrawing with Tibasima into his own stronghold in North Kivu where he had an army but at the same time appealed for calm; "I think we will find solutions to our problems which will enable everyone to come together", he explained. "Not only Professor Wamba, Tibasima and me but many other units which have fought to bring this Movement to the forefront so that we can consider the possibility of coordinating our efforts with other liberation movements fighting in the Congo at the same time as we are. It is not desirable for a rebel faction to arrive at Kinshasa on its own. What would the other factions do then? Those who want to free the Congolese people must first understand."

It is not easy to get Mbusa Nyamwisi's message to North Kivu; its citizens are so hostile to the Rwandan and Ugandan armies that they are considered to be forces of occupation. Mbusa Nyamwisi is therefore making every effort to convince his fellow citizens that unification between the three armed movements opposed to Kabila is essential to make the latter abide by the Lusaka agreements again and find a national solution in a Democratic Congo Republic. The reason is that isolation of Wamba dia Wamba finally threatens to lead to a further division of the territories occupied by Uganda to the East of the RDC. Wamba dia Wamba has no other army apart from the Ugandan Army. Contrary to most Congolese politicians he has no followers. Apart from his Bunia headquarters, the territories under his control have been transformed into an enormous no man's land in the hands of the militia, his rivals and bands of deserters.

And it is changing however...

In spite of the de facto partition of the Democratic Republic of the Congo, some institutions such as education and justice continue to function as if the former Zaire were still a unified country with its capital Kinshasa at the centre and at the top. As a result the two sectors are still ultimately the responsibility of the Kinshasa administration, therefore of Laurent Désiré Kabila and appear to ignore the rebel movements in the territories they control. Consequently, a judgement given in Butembo is appealed against in Goma, where the headquarters of the branch of the RCD armed by Rwanda is based. In the case of Supreme Court judgements, these can only be given in Kinshasa. Dieudonné Kahasa, Prosecutor for the Republic of Bunia in the East of the Democratic Republic of the Congo explains: "we have no political problems over the functioning of the judicial system. Those who have benefited from a decision in any one of the territories may obtain from the court of jurisdiction or even from the Public Prosecutor's Office the documents necessary, which may be executed in other territories without posing any problems since judicial cooperation is good." It has however become very difficult for a member of the public or a student to travel from the East of the Democratic Republic of the Congo to Kinshasa as there are no direct flights. In addition, in the regions held by the Goma RCD many Congolese prisoners are quietly taken to prison in Rwanda or disappear into fictitious dungeons. In that case Kinshasa can of course do nothing.

G.K.

The Mau Mau control the countryside

Among the factions in league, the Mau Mau must also be reckoned with. They are classified as undesirable forces under the Lusaka agreements and as such are deprived by the signatories of these agreements of any legitimacy to participate in the future direction of the Democratic Republic of the Congo. However, Mau Mau fighters who were formerly dispersed have been restructured with the object of driving out the Ugandan Army which holds a quarter of the Congolese territory and of supporting democracy in the future. Kibancha Louairé, who has been encountered in Kampala then in Béni in North Kivu, is spokesman for Padire, one of the principal Mau Mau chiefs: "We have informers in Europe, here in Africa and even in America. Military action is threatened by Padire, the chief of staff, and he has installed informers everywhere in the country. We occupy a large part of North Kivu and South Kivu. We will also soon be in Kisingani." Contrary to the other armed movements in the RDC, the Mau Mau resistance movement does not have international support. It therefore does not have sufficient funds to purchase arms. Some Congolese resistance groups have decided to ally themselves with the RCD Liberation Movement which has set up a training camp at Lubero in North Kivu for them and has already trained a thousand Mau Mau guerillas. In order to drive out the foreign armies occupying their territories, the Mau Mau state that they are prepared for new alliances, with the exception of members of the Goma RCD which they consider to be those "who bring foreigners (to them) who are engaged in killing people on the spot."

Congolese resistance expressed within the Mau Mau movement has become an essential force in the negotiations in progress between the three movements armed by Uganda and Rwanda in order to unify them military against Kabila. Without the Mau Mau, who are said to number some 30,000 men, none of these movements can attempt to control anything other than the principal towns.

Extract from articles by Gabriel Kahn,
Radio France International correspondent in the Grands Lacs region

"The international community must intervene as a matter of urgency"

Eric Plouvier is a lawyer in charge of the FIDA Mission. He recently went to the Grand Lacs region in this capacity. On his return to Kisingani he gave his first impressions to The Letter.

How can the presence of Rwandans and Ugandans in the east of the RDC be explained?
The East of the RDC is clearly occupied by Ugandan and Rwandan armies, ostensibly to support the rebel movements. In addition, the withdrawal of these foreign armies from Congolese territory is one of the points both of the Lusaka agreements and the position of Laurent Désiré Kabila or of the requirements of both. The Uganda authorities officially reply that their presence in the RDC is to protect their frontiers in view of problems of rebellion in the Mountains of the Moon at the Ugandan frontier. In fact, senior Ugandan officers are training Congolese in the Béni region. They form a buffer zone against the Rwandis at the Rwindi side and provide protection for Congolese participants in the rebellion. It is therefore true support, although the reasons are perhaps other than political. In fact, it is extremely difficult to establish what really is happening in this complex situation. It is however clear that the real motives are not only to seek support for the movements which want to overturn Kabila and his anti-democratic regime. The immense wealth of gold or diamonds in the Congo, especially in this region, is an attraction which is not ignored. In the case of Rwanda, for historical reasons it is also to respond to a desire to expand.

What is the human cost of these two years of war?
It is horrific. There have been thousands, even tens of thousands, of deaths among the civil population. People are still dying as a direct or indirect result of the conflict, either in massacres or because of the precarious situation associated with the displacement of people and the resultant health problems. Since 2 June this year at least 50,000 people have fled from the village of Kibirizi and the surrounding countryside and have gone principally to the villages of Kirumba, Kayna and Kanya-Bayunga. Witnesses speak of pillaging and massacres committed that day by "men in uniform speaking Rwandi". Those who finally returned to harvest their crops in their villages in the area controlled by Rwandan forces (Goma RCD) reported that they had again been driven out. Today in the town of Kanya-Bayunga alone tens of thousands of people are in urgent need of humanitarian aid, i.e. they lack food and, in particular, there is a cholera epidemic. On 5 August officials from the province of North Kivu reported that out of this population displaced by war 10 people were dying every day from cholera. However only two vehicle loads of provisions for displaced people have arrived safely during June and five lorries are still being held by armed forces at Rwindi. The international community must intervene as a matter of urgency. It is astonishing that an alarming report published on 7 July by OCHA (UNO East RDC Humanitarian Coordination Bureau) has not been followed up by action and that today there are still 50,000 to 70,000 people who have not received any international aid. It is unfortunately a conflict which is taking place behind closed doors and the humanitarian organisations which could come to the aid of the peoples of the Congo cannot go since their safety does not appear to be really assured.

Finally, among the disastrous consequences of this conflict are the child soldiers armed and trained by the rebel movements. Children from 10 to 15 can be seen carrying arms. And when those responsible are asked the reason for their presence, the reply is: "when a child is seen with a gun nobody asks his age; if he has a weapon it is because he is old enough to carry it!"

 

SPECIAL SUPPLEMENT:

Reforming the International Financial Institutions

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Presentation

The Bretton Woods System

The International Bank for Reconstruction and Development (IBRD) and the International Monetary Fund (IMF) sprang from the Bretton Woods international conference in 1944 and form the hard core of the international financial institutions (IFI)

CONTACT
Agir ici for a united world
AGIR ICI was launched in 1988. With French and foreign associations for inter-
national solidarity, the defence of human rights, the protection of the environment and organisations working for peace and disarmament, Agir Ici initiates campaigns to form public opinion. These campaigns reach between 25,000 and 200,000 people. They generally involve sending letters to political and economic decision makers.

Contact: Agir Ici, 14 passage Dubail, 75010 Paris, France.
Tel: (33-1) 40 35 07 00
Fax: (33-1) 40 35 06 20
e-mail: agirici@globenet.org internet site: www.globenet.org.agirici

According to its statues, the role of the IMF is to insure the stability of international monetary relations. With the end of the fixed exchange system based on the convertibility of the American dollar into gold (1971), the IMF was forced to redefine its mission. Since the beginning of the 1980's it has played a leading role in the restructuring of the foreign debts of countries experiencing difficulty paying, and with which it negotiates the setting up of structural adjustment programmes. As for the IBRD, in 1960 it was amalgamated with the International Development Association (IDA?) and together they form what is now known as the World Bank. Its president is appointed by the United States (Mr. Wolfensohn at present). According to its latest annual report, the Bank's fundamental objective, complementing that of the IMF,is
Ôto help borrowers to reduce poverty. By contributing to the strengthening of economies and the expansion of markets, it seeks to improve the living conditions in all the countries of the world, especially the poorest'. Whereas in the first instance they were initially designed to facilitate the reconstruction of industrialised countries after the war, the Bretton Woods institutions rapidly abandoned this role to become the economic and financial policeman of the developing countries.

The World Bank System: the IBRD and the IDA
The IBRD began its activities in 1946 but is role has gradually evolved over the years. Indeed its operations have spread to underwriting the provision of facilities in devel-
oping countries which, at the moment, are the main beneficiaries of its aid. At the same time the IBRD was amalgamated with four complementary structures with which it forms the World Bank group today: the International Financial Society(IFS)
launched in 1956 to stimulate growth in the private sector in developing countries; the International Development Association (IDA) created in 1960 to grant credit to countries which did not have access to loans from the IBRD; the International Centre for settling disagreements (arbitration) over investments founded in 1966; and the Multilateral Agency for Investment Guarantees (MAIG) established in 1988 to promote direct foreign investment.

The IBRD's funds come from the international capitals market. It borrows at advant- ageous rates because the loans are guaranteed by the stability of governments which are shareholders in the IBRD, and then redistributes the money to its members, while deriving a profit which allows it to cover the administrative charges and build up reserves. So the countries benefiting from its assistance have access to more advantageous rates than they would have if borrowing directly on the market.

However, functioning in the same way as a normal bank, the IBRD only selects suf- ficiently profitable projects. It only grants loans to middle-income countries as the fixed interest rates are too high for low-income States.

KNOWLEDGE
The IFI's recipe for a successful adjustment

The aim of the structural adjustment programmes is to help restore the economic and financial balance between the States. They add up to a raft of measures which vary little from one country to another and are characterised by the emphasis laid on economic and financial rather than humanitarian and environmental criteria:
- reduction in State spending (especially social services)
- devaluation of local currency
- privatisation of national companies
- promotion of exports to obtain currency
- elimination of commercial barriers (for imports among other things) and opening up of the interior market
- elimination of subsidies in agriculture and the health system
- deregulation in the jobs market, radical cutbacks in wages
- a rise in interest rates to curb inflation
The changing roles of the World Bank and the IMF
Originally the role of the IMF was to advise and grant loans to countries with a commercial deficit (including Northern countries) so that they could protect their financial parity. After the collapse of the system of exchange rates fixed in 1972, the IMF's role has remained uncertain. The institution found a new vocation in the 80's as a source of loans to developing countries asking for a rescheduling of their debts, and even more importantly, in the forming of policies to adopt and the supervision of stabilisation and structural adjustment programmes which the countries in question wee obliged to accept.
The original role of the World Bank was to provide loans intended to finance development projects. In the 80's the Bank began to take on additional functions granting loans to indebted countries, but on condition that they undertook structural adjustment programmes. The two institutions exert a considerable influence because the commercial banks base themselves on their advice when deciding the rescheduling of current loans and granting more credit to the developing world. In this way, in the context of the world-wide economic counter-revolution of the Reagan years, the two institutions have become debt collecting organisations on behalf of the commercial banks.
Taken from a report by the independent expert on structural adjustment of UNO's Commission on Human Rights.

At present (1988) the IBRD has 181 member States which, in accordance with its statutes, must all belong to the International Monetary Fund. It is run by a Board of governors and administrators.

Theoretically the Board of governors is the supreme authority. Its general assembly meets once a year.
Each member State is represented by a governor (often the Chancellor of the Exchequer or the manager of the member country's central bank), with a deputy. The division of power within the IBRD is allocated in proportion to each member's wealth and not in an egalitarian fashion between the States: in fact, each governor has 250 votes plus one vote per tranche of capital held, this being proportionate to the economic level of the country. Among other tasks, it is the Board's job to define conditions of admission for the States, to admit new members, to increase or decrease the capital, to conclude collaborative agreements with other international organisations.

In reality, the IBRD's most influential authority is the Administrative Board. In fact the Board of Governors delegates most of its powers to the Administrative Board whose 24 participants are permanently in session in Washington. They deal with the daily running of the Bank, ratify the loans and policies, control the operation and per-
formance of the portfolio of shares as well as the Ôstrategies for aid to countries'. They meet Ôas often as required to manage the Bank's affairs' and are assisted by various committees in charge of studying specific subjects. The administrators also elect a president who is appointed for five years. In point of fact, the president is appointed by the United States and the approval of the Administrative Board is a mere formality. Since June 1995 the post has been held by James Wolfensohn. Seats on the Administrative Board are allocated as follows: 5 countries (Germany, United States, France, Japan and the United Kingdom) those possessing the largest share, are entitled to a permanent seat. Three further seats are granted to Saudi Arabia, China and Russia The 16 remaining seats are taken by elected administrators, for two years, by the 173 other countries in 16 groups (there can be from 4 to 24 countries in a group). Each administrator has the number of votes attributed to the member country or group of countries which he represents.

Officially IDA is a structure legally and financially independent of the IBRD. However, it is pretty obvious that the two institutions overlap considerably. The IDA is designed in a way enabling it to be administered by the IBRD. They have the same president (James Wolfensohn), share the same employees and, by and large, bring together the same countries: 160 countries belong to the IBRD have, to date, belonged to the IDA. That is why they are grouped together today under the name World Bank, a term which originally only applied to the IBRD.

As an association the IDA has no capital realised from shares but it does benefit from sources of finance: transfers of disposable income from the IBRD, repayments of credit made (low profit margin) and voluntary contributions form the member States. Its vocation is the financing of programmes to fight against poverty by granting long term credit (35 to 40 years), at a very low interest rate and where the repayments may be made in local currency. Mainly, for States benefiting from loans in 1998, this concerns countries whose revenue did not exceed 925$ per head per annum in 1996 (about 80 States in all). Certain countries receive loans from the IBRD as well as the IDA. Whereas the latter grants credit with less rigorous conditions that those of the IBRD, nevertheless the projects must be economically viable.

ACTION

IMF: getting out of the impass (can't translate that as it is a play on words which in English would be sap) In order to allow populations affected by the structural adjustment programmes to make their voices heard within the IMF, Agir Ici along with AITEC and CRID has launched a campaign called IMF: getting out of the impasse' to ask the French government to support publicly the setting up of an appeal mechanism, which would permit populations to lodge complaints when their fundamental rights or their envir- onments are threatened by the policies dictated by the IMF. To be effective, this appeal mechanism must be provided with Ð impact studies predating the setting up of the structural adjustments programmes the creating of a truly independent assessment unit To learn more about this campaign as well as the initiative For the reform of inter- national financial institutions consult internet site:www.globenet.org/ifi

The International Monetary Fund
Just like the IBRD, the IMF has been forced to redefine its role by changes in the international situation. In fact, with the advent of the oil crises and the end to fixed parity between the dollar and gold Ð which signalled the collapse of the system put in place at the end of the war Ð its original assignation came to an end.

As the commercial banks had become distrustful with regard to the developing countries because of the debt crisis, from now on the IMF undertakes to function as lender of last resort and sees its vocation as bailing out economies in difficulty in order to restore confidence in the private sector. Conditions are attached to the loans which are subject to the setting up of structural adjustment programmes (SAP), or more recently to strategic frameworks for the fight against poverty (SPFP), which impose the easing of economic restrictions. The International Monetary Fund - which has 182 member States Ð is organised around three principal structures: the Board of Governors, the acting Committee and the Administrative Board.

Theoretically the Board of Governors is the supreme authority. The general assembly meets once a year, two consecutive years in Washington and the third year on a mem- ber country's territory. Each member country has its representative (most often the Chancellor of the Exchequer or the manager of the central bank, as with the IBRD).
It is part of the remit of the Board of Governors to decide on the administration of the States and to adopt the budget.

In 1974 the Board voted to set up an acting committee. This committee, made up of 24 members (with the same distribution criteria as the Administrative Board), meets twice a year, oversees the management and functioning of the international monetary system and advises the Board of governors.

The Administrative Board is chaired by a General Director, elected for 5 years and without a vote except in the case of a tie. He has always been European; at the moment it is Horst Kohler. Within the Administrative Board, which meets several times a week, the seats are allocated according to the same criteria as for the IBRD.

Article taken from Agir Ici's internet site

The financial predominance of the rich countries and the United States
The number of votes held on the Administrative Board of the World Bank and the IMF is a function of the capital shares held and therefore depends on the economic level of each State. In other words, the rich decide on the policies to follow and impose them on the poor.
It is particularly blatant in the case of the IMF which dictates the policies of the poorest countries but does not interfere with the rich. For instance, the United States have more debts than any other country in the world, a fact which helps to destabilise the international monetary and financial system. However, this situation does not embarrass the IMF. What would happen if the IMF demanded of the USA Ð or any other rich country Ð what it requires of other States?

Decisions have to be taken with an 85% majority of the votes, so a 15% minority is sufficient to block a measure. Now, in the IMF and the World Bank the Americans hold more than 16% of the votes which, in fact, gives them the right of veto.

At the IBRD the seven richest countries on the planet total 43.66% of the votes, the 29 countries of the OCDE together only add up to 61.43% while the 88 poorest countries each have less than 0.1%.

 

Analysis

Analysis - We need to listen more carefully to walls

Statistics

In 1980, there were 136 million people living in poverty in Latin America; this number reached 183 million on 1997, and more than 200 million in 1999.

There are currently nearly 90 million Latin Americans living in extreme poverty, unable to provide for their most basic needs.

According to the Pan American Health Organisation (PAHO), 105 million people in Latin America do not receive regular access to health care, and in many countries access to education is still dependent on the population's income.

Studies carried out by CEDAL show that at least 5 Latin American countries today are not able to provide primary education for all.

If governments spent more time walking around the suburbs where their citizens live, they would have a better perception of the new tendencies which are becoming firmly established in the lives of those who have not reaped the fruits of globilisation. They would see a lot of walls on which the poor, with nothing left to lose, have started writing, in graffiti, the preamble to a new Declaration of Independence for Latin America: "When hunger is law, rebellion is justice".

The protest is justified since, in spite of the progress made in macro-economics in the 1990s which lead to recovery in Latin America after a decade of stagnation, poverty remains a characteristic trait of the region. Thus, at the end of the 1990s and despite several years of economic growth, the level of poverty in the region still peaks at an average of 35%. In real terms, the number of poor is growing steadily. More than a third of Latin Americans live in poverty. Official statistics highlight a reduction in the number of poor in urban areas in percentage terms, but are discreet about the increase in real terms of poor people living in urban and rural areas.

The general level of poverty that prevails today in the region can be explained by the worsening trading terms for our main export products, by the increasing burden of our external debt which cannot be paid, as well as by the effects of deregulated investments. We also need to point out the deep impact on economic, social and cultural rights (ESCR) of the Structural Adjustment Programs (SAPs) imposed by multilateral financial bodies such as the International Monetary Fund (IMF) and the World Bank (WB) to ensure our economies become subordinated into an international division of labour, dominated by the interests of financial capital and transnational organisations. The measures that have been taken over the last 25 years for liberation, under the aegis of the SAPs, have led to radical changes in economic and social policies in the region. Free market economy, although not eliminating it, has minimised the state's role as regulator and distributor of revenue; it has privatised state companies and deregulated almost all the markets. The policies on structural adjustment imposed by the IMF and WB have thus set new conditions to encourage foreign investment, which in turn has generated substantial profits at the expense of our countries' human and natural resources.

The rise in trade and foreign investment coincided with the increasing gap in income between rich and poor, to such an extent that Latin America now has the worst structure of income distribution in the world. This phenomenon can be seen not only in the countries of Latin America that were the most willing to undergo this process of liberalisation, but also at the heart of the industrialised economies of the United States and Canada. Even though the multilateral financial bodies assured us that things would improve after a period of lean years, the results have not confirmed the predictions of the bureaucrats working for the international financial investors. They have neither resolved the problem of external debt, nor improved the population's living standards by opening up the economy.

The more we pay, the more we become debtors. Between 1980 and 1990, we have transferred in interest and redemption payments to rich countries 415 billion dollars. However, the debt has not stopped growing, from 443 billion in 1990 to more than 660 billion today. The situation strongly contravenes both the Universal Declaration of Human Rights, which aims to promote and protect human rights and basic freedoms, and the various international tools related to the protection of economic and social rights.

There is a direct correlation between the state of social deprivation in which most of the population lives and the Structural Adjustment Programs (SAPs) which are meant to guarantee the repayment of external debt. This is why SAPs must take account, both at national and at international level, of the framework and consultation mechanisms in place to ensure all sectors of society effectively participate in policy elaboration, planning and evaluation. The same applies for economic and social development policies and programmes, as well as for monitoring and overseeing the SAPs.

The IMF and WB policies must also adapt to the international standards on protection and promotion of human rights, democratise its structures, and be subjected to the Economic and Social Council's control and direction as well as to the United Nations General Assembly's orders.

The situation indebted countries is in calls for an urgent radical transformation from the current international economic disorder to an orderliness with a need to respect international human rights' standards. Furthermore, this forces us to acknowledge that there is a state of need in indebted countries, to be able to justify non-payment of external debt: in the same light, we have to consider the duty to compensate the victims of "bad management" of the debt crisis by the rich countries and the intergovernmental financial bodies.

The Bretton Woods institutions need to be shaken down to the roots. A substantial reform in economic relations and international policies encouraged by these institutions as much as by the World Trade Organisation (WTO) needs to be undertaken.

As was stressed during the Permanent Peoples' Tribunal on external debt and structural adjustment (Berlin 1989) and the recent international conference "a continent against debt" (Quito 2000), all initiatives that aim to cancel debt must be seriously considered. We must not forget that many situations in the past when industrialised countries were in debt were resolved by cancelling unsustainable debts. All these cases were based on the postulation that a State is exempt of its international responsibility if it defers on repaying its financial obligations when the well-being of its people is severely affected by having to strictly fulfil these obligations.

The strategy and measures adopted for external debt, which aim to regulate the actions of states and other international bodies, must adapt to international legal standards on human rights and development.

If we refer to these standards the IMF and the World Bank are guilty of severe violations of international law, especially in terms of non-conformance to their respective constitutions. Thus, for example, Article 1 of the IMF's Articles on Agreement states the institution's objective to be: "To give confidence to members by making the general resources of the Fund temporarily available to them under adequate safeguards, thus

providing them with opportunity to correct maladjustements in their balance of payments without resorting to measures destructive of national and international prosperity". As for the World Bank, Article 1 iii of its Charter states that one of its objectives is "to help increase

Contact

CEDAL

CEDAL (Centro de Asesoria Laboral del Peru, a member of FIDH) was founded in 1997 to fight for the development of basic social security organisations and civil society. Its main aim is to promote sustainable, democratic and egalitarian development in Peru.

It does this by promoting work "as the main axis in human development". In addition to its important activities in economic analysis, promotion of and education in human rights, it also provides a service to assist, advise, train and reinstate.

Contact:
CEDAL
Jr Talara n. 769
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productivity, raise the standard of living and improve working conditions in Member states". But the reality is that the policies put into practice hinder the very achievement of these objectives.

The IMF and World Bank strongly undermine international law when they impose SAPs on our countries which force them to blatantly contradict other international obligations fulfilled in other areas within the United Nations' system (ILO, UNICEF, OAA, WTO, etc), the regional system to which they belong (Optional Protocol to the American Convention on Human Rights) or originating from other international human rights' tools.

It is a recognised fact that these policies have negative repercussions on the indebted countries' capacities to adjust their behaviour to fulfil human rights' requirements set by international standards and usual international laws. On the strength of this, both the United Nations General Assembly and the specialist bodies within it could appeal to the International Court of Justice (ICJ) for consultative advice, in accordance with Article 96 of the Charter. This would determine whether the IMF and the World Bank are under the obligation of adapting their policies to Article 1.3 of the Charter and, if this is the case,

whether the IMF's and WB's policies meet these requirements. There is also a need to determine whether United Nations member States are under the obligation of not applying the structural policies that are in breach of Article 1.3 of the Charter and, if this is possible, in line with international law, whether the various specialised bodies within the UN system are allowed to promote and apply these contradictory policies. In order to avoid SAPs and the never ending external debt leading to hunger as the norm, let's listen carefully to what the walls painted by the people in the street have to say.

Javier Mujica Petit CEDAL (Peru)

Analysis

"A hundred billion dollars for the South's dignity"

General knowledge

Article 55 of the United Nations' Charter

With a view to the creation of conditions of stability and well-being which are necessary for peaceful and friendly relations among nations based on respect for the principle of equal rights and self-determination of peoples, the United Nations shall provide:

a. higher standards of living, full employment, and conditions of economic and social progress and development;
b. solutions of international economic, social, health and related problems; and international cultural and educational cooperation; and
c. universal respect for, and observance of, human rights and fundamental freedoms for all without distinction as to race, sex, language, or religion.

 

General knowledge

Extract from the common report of the Independent Expert on Structural Adjustment Programs and of the UN Human Rights' Commission Special Rapporteur on the issue of the effects of external debt (E/CN.4/2000/51)

"Basically, you could say that the only result of the Cologne Initiative was to give false hopes, and the last act of the tragedy on third world debt has not yet been written. Many observers have strong doubts that Western financing countries and the multilateral development banks are really prepared to break the chains of servitude of the HIPC's debt, or even that financing the initiative will be enough to wipe the board clean. The conditions and external controls are still the main drivers of the HIPC initiative, even though the structure of the plan claims that its true objective is eliminating debt."

>> Tres Cruces, a village in the Bolivian Altiplano, altitude 3400 metres, July 2000. A representative of a governmental programme for rural development by decentralisation is talking in Quechuan to peasants gathered on the village square. He is explaining to them that the reduction in external debt that the country is benefiting from is going to directly improve their living standards. He is not at all sure that these peasants, mainly illiterate, who chew coca leaves all day long, understand the subtleties of the Debt Initiative for Heavily Indebted Poor Countries (HIPC), but at least the will is there. In Bolivia, in the same way as in Tres Cruces, there is a significant strengthening in dialogue between the public and the government. Maybe this is the direct impact of the HIPC initiative: to emphasise the transparency of public action, good governance, to take into account the (true) interests of the poorest, etc.

And as good things always come in pairs, the Bretton Woods institutions - the IMF and the World Bank - have, since November 1999, been wanting to link the HIPC initiative to the fight against poverty. The idea is to allocate resources freed up by debt reduction to fighting poverty as a first priority. Whenever a country applies for debt relief, they must draft a strategic framework document on fighting poverty (SFDFP).

We can sum up this global agenda on debt / poverty as two principles: dignity and dialogue. The dignity of countries in the South, by cancelling the burden of debt and their underlying dependency on the donors. The dignity also of the citizens, by drawing attention to the fight against poverty and the billion people who are living on less than a dollar a day. And a dialogue because the paradigm of development aid is being seen more and more frequently in the dialogue between all the parties active in development. Beneficiary governments, donors and society are invited to the rounds of discussion to put an end to the "dictator" cliché of the international financial institutions, with the IMF at the lead.

An initiative as alibi?

But even if the intention is a good one, and speeches point towards this, the link between debt and poverty reduction is very ambitious, to the extent that we could doubt the true efficiency of the HIPC initiative and its corollary SFDFP. The capacity for parties involved to run both initiatives simultaneously is not assured, far from it.

First of all, for those with a short memory, the very "social" U-turn the BWIs have done over the last two years seems very overrated. Put in the context of the WTO conference in Seattle and the Jubilee 2000 campaign to cancel debt, this change could be seen as a concession on the part of the BWIs to help us swallow the structural adjustment pill. Furthermore, splitting the roles of the two BWIs goes back to the old tactic of the carrot and stick. The World Bank takes on the role of "goody-goody", admitting its guilt over the disastrous management of the 1997 Asian Crisis, bending over backwards for society and recruiting staff from international NGOs. The IMF takes on the role of "goody-bady", a behind-the-scenes guarantor of the dogma of macro-economic stabiliser, towing the American Treasury's line.

Evidently, some people have failed in this subtle tango. John Stiglitz, former World Bank Chief Economist, was the first one to question the primacy of the macro-economic stabilisation - and was replaced by the painless Stern. Recently, the editor of the Development Bank's 2000 Annual Report, Ravi Kanbur, suddenly resigned following pressure from the IMF and the American Treasury over the contents of one of the Report's chapters on market globilisation. The differences of opinion that could discredit the BWIs' mission statement are also of an external nature. Even though the Bank's staff has sensibly been renewed since the revolution in President Wolfensohn's palace, there is some elasticity in the air regarding the kind words that are said at international conferences and the footnotes of the letters of intention and the conditions of agreement. According to Wolfensohn himself, institutional change is difficult. When you are a senior international official in charge of 100 billion dollars of credit, you could be forgiven for being conservative in your decisions.

Insufficient means

Secondly, we should not expect committed amounts. The proposed alleviation, approximately 100 billion dollars, is not exactly a dizzying amount compared to the total external debt of the countries of the South, more than 1600 billion dollars. The procedures for grants are long and complex: out of the 41 eligible HIPCs, only five have been successful with their alleviation procedure. Furthermore, the process is spread over at least six years, which, seeing the urgency of the situation in some countries, could be seen as a slow way to act.

Neither does the initiative address the causes of over-indebtedness. It is not accompanied by consideration of funds to reform the international financial markets and the States' financing mechanisms. In fact, there are no indications that once part of the debt has been soaked up, the countries will not fall back into the vicious circle of financing debt with debt. A report by Congress shows uneasiness regarding this, in terms of the neutralising effect of the link between debt reduction / fighting poverty. By allocating funds that were ear-marked for debt repayment to social programmes, there is precisely a risk of not reducing the need for external financing, penalising economic growth, and, ultimately, the fight against poverty.

Financing by donors also has its problem. Apart from the IMF, the multilateral donors are far from having finalised their finances. To date (June 2000) the World Bank has collected 2.1 billion dollars of its share of 6.3 billion, the Inter-American Bank 180 million out of a total of 900 million, and the African Regional Bank only 320 million out of a total of 2.2 billion dollars … On the part of the G7 countries, which provide practically a quarter of the alleviation, financing the operation could even be detrimental to public aid for development (which is already weak) by acting as a link. France and Japan, for example, are not strictly speaking cancelling the debt, but are financing its settlement 100%. Incidentally, this method allows them to integrate the cost of the initiative in calculating their respective GDPs.

Last but not least, the countries of the South are not capable of absorbing such sophisticated development strategies. Like a young driver who is pressurised into taking part in the Paris-Dakar race, the governments of the poorest countries are being asked to be masters in public policies that are technically very complex and very expensive in terms of human resources. Naturally, the BWIs are quick to offer any technical assistance they may require. But this approach does not really fit in with the national will to appropriate, which the SFDFP claims.

On its part, the public is facing a double challenge. Like its own government, it does not necessarily have the institutional capacity to carry out its participating role. And it is often a prisoner of a culture that either favours governments or systematically opposes it politically, and which, whichever way, is little in line with the consensual approach that the HIPC initiative and SFDFP demand.

Pierre Habbard
Researcher at Solagral

Footnotes:

1. See Kanbur's declarations on the site www.brettonwoodsproject.org
2. Extract from an interview published in Liberation, 10/07/00:
"[…] there is a natural tendency to resist change in all organisations. At the Bank, there are 140 nationalities, people […] who have a good life, who live in Virginia, their children go to American schools… A lot of them do not want to risk loosing their jobs, and by implication their visa to the United States, and go back to their native countries. All organisations are victims of this conservatism."
3. "Developing countries: Debt Relief Initiative for Poor Countries Faces Challenges", US General Counting Office, June 2000.

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