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Aid, Debt & Development

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The International Context of Global Outrage
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The future of the Arab spring and the Indignados and Occupy Wall Street movements is very difficult to foresee, but one thing is certain: the fight to break the infernal cycle of debt is a vital one. If it is not energetically pursued, there is little chance of overcoming the next neo-liberal offensive, writes Éric Toussaint.


25th January 2012 - Published by Committee for the Abolition of Third World Debt (CADTM)

Part 1: Looking back on the movements that preceded the Arab Spring, the Indignados, and Occupy Wall Street

In 2011, social and political rebellion has re-emerged in the streets and on squares all over the world. It has appeared in new forms and been given new names: the Arab Spring, the Indignados, the Occupy Wall Street (OWS) movement. The main regions affected are North Africa and the Middle East (including Israel), Europe and North America. Not all countries in those areas have been equally affected by this new wave of mobilizations and new forms of organization, but everybody has heard about the movement. In the countries in which it has not been massive, active minorities have attempted to give it wider legitimacy with varying results |1|. In the Southern hemisphere, only Chile has experienced a movement that can be compared to that of the Indignados in 2011 |2|.

If we try to sum up what has been achieved by the alterglobalist movement over the past two decades, we can distinguish between different phases related to the overall developments in the world.

From 1999 to 2005, in response to a heightening of the neoliberal offensive in Northern countries, large-scale mobilizations occurred against the WTO (Seattle in November 1999), the World Bank, the IMF, and the G8 (Washington in April 2000, Prague in September 2000, Genoa in July 2001). The World Social Forum emerged in that context in Porto Alegre in January 2001. Over the following years the movement spread to several continents (Latin America, Europe, Africa, South Asia, and North America). New international networks were created: Jubilee South (on the issue of debt), ATTAC (against the dictatorship of financial markets), the World March of Women, Our World Is Not for Sale, and others. Older networks (dating back to the first half of the 1990s) such as Via Campesina, CADTM (North/South network that focuses on the debt, the WB and the IMF) were strengthened. The antiglobalization movement developed in these years, mainly within the context of the WSF.

[See orginal article for box on Key dates in the creation of the alterglobalist movement]

After 20 years of neoliberal domination in South America, massive uprisings in several countries proved to be successful: the water war in Bolivia in 2000, the Indian uprising in Ecuador that overturned the neoliberal president (2000), the rebellion that overruled Argentine’s neoliberal president (end of 2001) and opened onto a prerevolutionary crisis in December 2001 and on into 2002, the popular uprising in Venezuela in April 2002 to bring Hugo Chavez back to the presidency after a coup (11-13 April 2002), the gas war in Bolivia in 2003 with the pro-Washington neoliberal president being overruled, and similarly the overruling of the pro-US neoliberal president in Ecuador in 2005… In the wake of such mobilizations, governments that at least partly broke off with neoliberalism and opposed the US domination, launched political reforms and partly restored public control over natural resources (Venezuela from 1999, Bolivia in 2006, Ecuador in 2007). Yielding to popular pressure, the Argentine government, which was not particularly left-wing, implemented heterodox measures that contrasted with those taken by the PT government in Brazil and by the Uruguayan Broad Front, which paradoxically carried on with the same policies of their neoliberal predecessors while adding a significant amount of ‘assistancialism’ that improved the condition of the poorer classes and thus consolidated their voter base. The free trade area of the Americas that Washington wanted to set up was abandoned in 2005 thanks to the opposition of a majority of South American governments and social mobilization.

Meanwhile 9/11 2001 led to a new US war offensive in Afghanistan and Iraq that reeked of oil grabbing and military positioning. The offensive was accompanied by a restriction of democratic liberties, especially in the US and the UK: war on terror was the perfect excuse. Faced with such hard-line imperialism, the alterglobalization movement managed to bring out 12 to 13 million people to march against war all over the world in February 2003, but was unable to prevent the invasion of Iraq one month later. The decline of the WSF started in 2005. One of the reasons was the International Council’s refusal to allow the forum to develop from a forum where activists could meet and exchange ideas to an open and democratic instrument for political action. We should add the institutionalization of the process, dominated as it was by NGOs and leaders of social movements that were all too closely aligned with social liberal governments, such as the Lula government in Brazil and Prodi’s in Italy.

After 2004 there were no more large-scale international mobilizations against the IMF, the WB, the G8, NATO, the WTO, or imperialist wars. The alterglobalization movement was obviously losing momentum though WSFs may have been quite successful, as in Belém (Brazil) in 2009, and to a lesser extent in Dakar in February 2011.
In 2005, when they adopted the EU constitutional treaty against the will of the people, the European ruling classes and governments reinforced the neoliberal capitalist orientation of an integrated Europe within the context of the EU and the euro zone that gradually extended to 17 countries. Industrialized capitalist countries as well as China and commodity exporting countries still seemed quite healthy. The ruling classes led their offensive by imposing more precarious working conditions and greater imbalance in the distribution of wealth, but consumption sustained through credit and the real estate bubble produced a misleading sense of abundance and well-being in countries such as the US, the UK, Spain, Ireland, Greece, and several central European countries that were new EU members. On the other hand, the perceptible effects of climate change triggered a growing awareness of the deleterious consequences of productivist capitalism.

Footnotes:

|1| In sub-Saharan Africa, there were student’s mobilizations in Burkina Faso in March-April 2011, in Togo in May-June 2011, and a movement called Y’en a marre (Fed up) against the authoritarian rule of President A. Wade in Senegal in June 2011. They made explicit reference to the Arab spring. In Senegal, the World Social Forum, which convened in February 2011, ten years after its first meeting, was greatly successful particularly because of the uprisings taking place in Tunisia and Egypt at that time (see Olivier Bonfond http://www.cadtm.org/Dakar-2011-WSF...).

|2| See Franck Gaudichaud, ‘When triumphant liberalism begins to crack. Reflexions on the awakening of social movements and the Chilian May’ http://www.europe-solidaire.org/spi...

[Translated by Christine Pagnoulle in collaboration with Charles La Via.]

Link to original source


Part 2: The global crisis that preceded the Arab Spring, the Indignados, and the Occupy Wall Street movement

In 2007, the capitalist sky started to darken: the biggest crisis of capitalism since the 1930s had erupted. The different crises that ensued were interconnected: the banking and financial crisis, real estate crisis, and economic crisis in the most industrialized countries, and the food crises in the Southern countries, particularly in Africa and certain Asian countries (Latin America was less significantly affected), which mainly resulted from the economic policies practiced in the most industrialized countries, in particular: 1. the shift away from real estate speculation (when the housing bubble broke) towards the grains futures markets; 2. support for biofuel production. In 2008, the food crisis caused hunger riots in more than 15 countries, as the number of starving people increased from 850 million to more than one billion |1|. The economic health of China, which is the workshop of the world, led to workers’ strikes in the former Middle Kingdom that resulted in wage increases (which were at that point very low). The worldwide crisis in governance is obvious, as the following three examples show:

1. The process to further deregulate trade, defined in Doha in November 2001, is at a standstill, and the WTO is simply spinning its wheels.

2. Between 2002 and 2008, the IMF experienced a radical crisis: two Managing Directors in a row did not finish their term of office; emerging countries reimbursed their debt to the IMF in advance in order to escape from its direct supervision and to follow partly heterodox economic policies;

3. The G7 (the United States, Germany, the United Kingdom, Japan, France, Italy, and Canada), where the financial and economic crisis originated, cannot pretend once again to find and impose solutions, because the emerging economies are in good economic shape, have substantial currency reserves, and have reduced their debt (at least their external debt). The leaders of the most industrialized countries convened the G20 in 2009, and asked the emerging countries to help them get out of the economic quagmire in which they were stuck. Great promises were made: the capitalist system will be reformed or even rebuilt on new foundations, the international finance system will be cleaned up by regulating the tax havens, bankers and their traders will be forced to stop their extravagant behavior, speculation on foodstuffs will be limited, major institutions like the IMF and the World Bank will be reformed to give a little more voice to emerging countries, solutions will be found to mitigate climate change…

In the final analysis, none of these promises have been put into practice. Meanwhile, the IMF has returned to the center stage. Whereas it had to take the pressure off emerging countries and was on the brink of financial suffocation (to such an extent that it had to lay off staff), it decided to attack again, but this time the Northern countries. In 2008-2009, it imposed its neoliberal prescriptions in Iceland and in several countries in Central and Eastern Europe (former members of the Soviet bloc which became members of the European Union or candidates for accession |2|). In 2010, it was Greece and Ireland’s turn. In 2011, Portugal was once again submitted to some brutal financial waterboarding. The G20 decided to bailout the IMF even if the process was complicated to enact since the major powers were reluctant to give the emerging powers the role they deserved, even though they had asked them for financial support |3| . At a European summit in December 2011, the EU, without the help of the United Kingdom, decided to channel 150 billion euros to the IMF.

In 2008-2009, the crisis in the most industrialized countries adversely affected the Chinese economy, where the authorities reacted by launching a vast economic stimulus package financed by the State (which the IMF had always refused to do when Southern countries were facing such a crisis).

In 2007-2008, the dominant classes and governments in power in the most industrialized countries became frightened: the capitalist mirage was quickly evaporating, capitalism was caught up in its own contradictions and starting to appear to be the very cause of the crisis. To avoid massive protests, which might become quite radical or even anticapitalistic, at the end of 2008 and in 2009, Washington (where Barack Obama had arrived in January 2009), the European Commission, and the capitals of the Old continent created social shock absorbers, except in European periphery countries such as the Baltic Republics, Hungary, and the Ukraine. The shock doctrine really started being implemented in 2010. In 2011, it was applied more violently. The attacks against what remained of the rights acquired by workers after World War II were brutal, particularly in the periphery countries, within or outside of the European Union.

Meanwhile, in 2008-2009, the epicenter of the crisis, which had been in the United States moved to the European Union for three reasons:

1. The organization of the European Union accentuated the crisis because the instruments for aid and for transferring funds to the most fragile countries were progressively disappearing;

2. Private European banks threatened to collapse and to cause a new financial cataclysm similar to the one created by the bankruptcy of Lehman Brothers. Saved by the States, they continued taking tremendous risks with the money lent to them for almost nothing by the Fed, the ECB, Bank of England, and Swiss National Bank;

3. Instead of adopting an economic stimulus policy and imposing strict rules on the banks, the European commission and national governments imposed severe austerity measures, which reduced demand and resulted in depressed economic activity. As a consequence, public debt, which was much lower than the debt held by private corporations, exploded. In several European countries, including Spain, Ireland, the United Kingdom, and Hungary, when the housing bubble broke hundreds of thousands of heavily indebted families lost their homes or apartments creating dramatic situations for them. Hundreds of thousands of construction jobs were also eliminated. In 2010-2011, the European governance crisis took on major proportions. Increasingly frequent crisis summits were held to concoct bailout plans, which have not yet been able to solve anything. Banks are once again on the brink of disaster, and if they have not yet fallen off the cliff, it is only thanks to the additional support provided by national governments.

Footnotes:

|1| See Jean Ziegler, Destruction massive : géopolitique de la faim (Massive Destruction: the Geopolitics of Hunger), Le Seuil, 2011, and Eric Toussaint, A Diagnosis of emerging global crisis and alternatives, Vak, Mumbai-India, 2010, chapter 6. See also : Eric Toussaint, “Getting to the root causes of the food crisis” http://www.internationalviewpoint.o...

|2| See Damien Millet and Eric Toussaint (editors), La dette ou la vie (Debt or life), Aden-CADTM, 2011 http://www.cadtm.org/La-Dette-ou-la-Vie

|3| At the G20 held in Cannes in November 2011, the BRICs (Brazil, Russia, India, and China) did not agree to provide more funds unless they were given much more power in the international governing bodies

[Translated by Charles La Via] 

Link to original source


Part 3: From the Arab Spring to the Indignados movement to Occupy Wall Street

Living conditions in Tunisia and Egypt, neither of which export raw materials, or only marginally, have worsened over recent years. The resulting civil protest has been met with brutal repression. In Tunisia first, this led to a mass reaction, which quickly took on a political dimension. People gathered in the streets and squares to face the forces of repression, which left 300 dead, and demanded the departure of the dictator, Ben Ali. He was forced to step down on 14 January 2011. From 25 January 2011 on, the movement spread to Egypt where the population had been subjected to decades of neoliberal counter-reforms dictated by the World Bank and the IMF, with a dictatorial regime allied, like Tunisia’s, to the major Western powers — as well as being totally compromised by an alliance with the Israeli government. On 11 February 2011, less than a month after Ben Ali’s demise, Moubarak too was obliged to resign from office. Repression clamped down on other countries in the region as civic unrest spread like wildfire. The process of struggle throughout the region is far from over. In Tunisia and Egypt, the ruling classes, helped by the major Western powers, are trying to control the situation to prevent the movement from becoming a full-blown social revolution.

The wind of rebellion has swept across the Mediterranean from North Africa towards southern Europe. In Portugal, on 12 March 2011, hundreds of thousands of temporary workers demonstrated in the streets but the movement did not last. On 15 May, the protest reached Spain and carried on until 23 July, before escalating to a global level on 15 October 2011. Meanwhile, the movement had reached Greece from 24 May 2011. Puerta del Sol Square in Madrid, Catalunya Square in Barcelona, Syntagma Square in Athens and hundreds of other squares in Spain and Greece vibrated to the same rythms in June 2011. In July and August, social protest also shook Israel: the Rothschild Boulevard in Tel Aviv was occupied but with no threat to the government and without seeking to connect with the Palestinian cause. In September, the movement crossed the Atlantic. From the East Coast of the United States, where it started in New York and Wall Street, it spread over a large part of U.S. territory to the West Coast where Oakland was the site of the most radical action. On 15 October 2011, the date fixed by the Indignados movement in Spain, over a million people were demonstrating around the world, from Japan to the West Coast of the United States, mainly in the highly industrialised countries.

The most imposing of the 15 October demonstrations were those in Madrid, Barcelona, Valencia, Athens and Rome. In Spain, where the action started, almost half a million demonstrators marched through the streets of about 80 different towns, including at least 200,000 in Madrid. Demonstrations took place in the planet’s main two finance centres, New York and London, as part of this vast movement. In over 80 countries and nearly a thousand different cities, hundreds of thousands of people, young and old, marched in protest against the way governments were dealing with the international economic crisis. Governments had rushed to the aid of the private institutions who were responsible for the collapse and who were taking advantage of the crisis to enforce neoliberal policies such as massive redundancies in the public sector, drastic cuts in social spending, massive privatization, measures undermining collective solidarity (cutting retirement pensions and unemployment benefits, sabotaging negotiated agreements between employers and workers, and so on.) Everywhere the need to repay the public debt is the pretext invoked to justify increased austerity measures. Everywhere demonstrators condemn the banks.

There is no permanent organization behind this movement and it has not sought to establish any kind of international coordination; nevertheless, communication is clearly functioning well.

[Translated by Vicki Briault in collaboration with Christine Pagnoulle]

Link to original source


Part 4: Common features of the various 2011 mobilizations

In 2011 we come across several common features when looking at the Arab Spring, Occupy Wall Street or the Indignados movements in various countries.

1. Demonstrators reclaimed public space, they even settled there, they organized many marches. In the past radical actions have often started at places of work or study and involved their occupation. Although strikes and factory or school occupations did take place in some countries such as Egypt or Greece, the most common form of action consisted of reclaiming public space. For a significant number of protesters it was impossible to organize anything at their workplace, mainly because of repression and the dispersal of workers. Many are unemployed (this is one of the reasons for their involvement) or have to make do with some casual part-time job. In some countries we find many unemployed graduates among the demonstrators. In countries such as Spain, which was badly hit by the real estate crisis, or Israel, where there is a severe shortage of low-rent housing, many are the victims of the real estate crisis. Beyond these reasons, the determination to occupy city squares expresses the will to get together, to muster up forces in a show of strength to governments that are perceived in Tunisia, Spain, Greece, Egypt, or even in the US, as completely impervious to the needs and demands of the majority of their citizens. The demand for genuine democracy (democracia real) is at the very heart of those movements.

2. In several countries communication and mobilization partly relied on social networks such as facebook or twitter, though this should not be over-emphasized.

3. The reliance on ‘meetings’ has been another common feature. In the same vein we notice reticence or downright refusal to elect representatives. There is a call for direct participative democracy.

4. In many cases, civil disobedience has been systematically used as an act of resistance in the face of totalitarian governments (as in Tunisia or Egypt) or of a government that is so cut off from the people that is uses repression to evacuate public squares or prevent meetings (as is regularly the case in the US). This is a far remove from traditional demonstrations, that were more like processions than to protest marches. In some respects the movement is the expression of a qualitative leap. Until now, the dominant ideology and repression had succeeded in splitting people up and making them feel isolated through fear of repression, fear of losing their jobs, lodgings, retirement benefits, savings, etc. But the depth of the crisis and the critical number of demonstrators have made it possible for many to break out of their isolation, feeling that there was not much left to lose. For many demonstrators this is the first time they have been part of a collective protest with a political dimension.

5. In most cases no list of demands was drafted, though the Indignados’ working committees did produce proposals and declarations. In this respect we ought to underline the significance of the joint declaration of protesters on Puerta del Sol and on Syntagma Square (Sol-Syntagma): ‘No to the payment of illegitimate debt. This is not our debt. We owe nothing, we sell nothing, we will pay nothing |1|.’ In the case of Tunisia and Egypt, they agreed on a central demand, namely that the dictator should step down fast: ‘Dégage!’.

6. Protesters did not come together on any community basis, whether political, generational, religious, social, or ethnic. There is a real medley, even if some of the categories that are the most exploited are sometimes under-represented. The Occupy Wall Street slogan was soon adopted all over the world: ‘We are the 99%’.

We could add a seventh common feature: nowhere have the World Social Forum, the European Social Forum, or the Social Forum of the Americas served as reference. Nor is there any reference to an antiglobalization or global justice movement. In this respect the cycle that opened with the creation of the WSF in 2001 seems to be completely over, another cycle has started, we will see what it opens onto. What matters is to be part of it.

As well as these common features, there are glaringly obvious differences. In North Africa and the Middle East the main targets are dictatorial regimes (though the social issue is indeed present and even a triggering element). In more industrialized countries the targets are banks and lackey governments. Defending public goods is a demand they share. The social issue is voiced by refusing precarious jobs, rejecting the privatization of public services (education, health care, etc.), demanding a solution to the housing and mortgage crisis (particularly in Spain and in the US, where students also have to take out loans that amount to USD 1,000 billion), and more generally by refusing to pay for a crisis that was caused by 1% of very rich people…

Among industrialized countries there is also a marked difference between the radical Greek movement, with its similarities to the pre-revolutionary crisis seen in Argentina in 2001-2002, and the situation in Spain, not to mention the US. The diverging histories of the social movements in these countries and the different degrees of recognition of hard left political parties (the Greek radical left with the Communist Party amounts to 25 to 30% of voters and can thus have a significant influence on trade unions, as indeed in Portugal, while the situation is completely different in the States) have not been erased by the movement that emerged in 2011.

Footnotes:

|1| See http://www.cadtm.org/The-citizens-o...

[Translated by Christine Pagnoulle in collaboration with Vicki Briault]

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Part 5: Indignadas and Indignados of the World, Unite !

The future of the Arab spring and the Indignados and Occupy Wall Street movements is very difficult to foresee.

The Tunisian and Egyptian uprisings are likely to lead to a transition similar to those that ensued in Latin America, the Philippines and Korea with the end of dictatorships in the 1980s, or in South Africa in the 1990s and in several sub-Saharan African States: with the stabilization of a neo-liberal bourgeois regime. Today is a different era, the Muslim world presents very specific characteristics, and the geo-strategic stakes are significant (especially as regards Egypt and the Middle East, less so Tunisia): history is an open process. The capacity of the oppressed to organization will be decisive.

For the Occupy Wall Street movement – OWS – and its counterparts in the rest of United States territory, will the current phase of repression and the rigours of winter take its toll on the movement’s impetus? Will attempts by the Democrats to appropriate the OWS for the purposes of the 2012 election campaign succeed in dividing it?

In the case of the Indignados in Europe, apart from Greece where it directly opposes the government, we shall see if it manages to consolidate in Spain, gather new strength in Portugal, take hold in Italy, and whether it will eventually affect Ireland and other European countries. In the case of Greece, Spain and Portugal, the movement was born when the Socialists were in power and applying their neo-liberal policies to the benefit of the bankers responsible for the crisis. Since then, elections have brought back the right, which is intent on imposing an even harsher austerity cure. In Greece, the return of the right came without an election with the forming of a national unity government between the Pasok, the right and the extreme right. With the political context thus modified, will the Indignados Movement recover its strength and come into direct conflict with these governments? The outcome will be decisive for the country’s capacity to weather the worsening crisis. Will the Irish people shake off its present torpor? Will there be an Outraged Irish movement?

Italian social movements played a decisive role in the early 2000s during the rise of the anti-globalization movement and the European and World Social Forum. This was followed by a certain ebb, by a period of adaptation to the social liberal policy of Romano Prodi’s government and of demoralization following the return of Silvio Berlusconi. What will happen with the big-business government of Mario Monti and the partial placing under guardianship of Italy by the European Commission and the IMF? Will the Indignados movement take on a specifically Italian colouration in 2012, or will resistance be mainly pursued through other channels? As for France, which saw a powerful social movement in 2010 for the defence of pension rights and which remained on the fringe of the Indignados movement in 2011, will this movement finally take root when the new austerity measures come into full force, whether under Nicolas Sarkozy or François Hollande? And what of the United Kingdom, Germany and Belgium, for instance? If the private banking crisis brings new bankruptcies in the wake of the collapse of the Franco-Belgian Dexia in October 2011, what will be the effect on the populations concerned?

Whatever the various outcomes, it is clear that thanks to the Arab spring, the Indignados movements and Occupy Wall Street, the bottom line for the year 2011 is a positive one for the struggle of social movements. The people have rid themselves of dictatorships in North Africa, and in the United States, Occupy Wall Street has upstaged the Tea Party, while in several European countries resistance is being organized on a large scale and through new channels.

One thing is certain: the issue of the debt will increasingly be the cornerstone of the fight to resist austerity programmes and the wanton destruction of social benefits. Repayment of the public debt is both a pretext for imposing austerity measures and a powerful mechanism for the transfer of revenues from those low down on the scale to those at the top (from the 99% to the 1%). The fight to break the infernal cycle of debt is a vital one. If it is not energetically pursued, there is little chance of overcoming the next neo-liberal offensive. In addition, in countries like Spain and Ireland where the bursting of the real estate bubble affected hundreds of thousands of families, cancellation of the mortgage debt and the guarantee of a right to decent housing are becoming key issues.

In a number of countries (Greece, France, Portugal, Spain, Italy, Ireland, etc.) the creation of citizen debt audit collectives is a significant step towards reinforcing the Indignados movement dynamic wherever it is operating and for mounting a counter-offensive on a European scale.

Indignadas and Indignados of the World, Unite !

[Translated by Judith Harris in collaboration with Christine Pagnoulle]

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Éric Toussaint, PhD in political science, President of CADTM Belgium, member of the International Council of the World Social Forum since it was created, and of the Scientific Committee of ATTAC France. Author with Damien Millet of Debt, the IMF, and the World Bank, Sixty Questions, Sixty Answers, Montly Review Press, New-York, 2010; editor (with Damien Millet) of La Dette ou la Vie (Debt or Life), Aden-CADTM, 2011. Contributor to Le piège de la dette publique. Comment s’en sortir (How to escape from the of public debt trap), Paris: Les liens qui libèrent, 2011.