Interview: Lidy Nacpil, Freedom from Debt Coalition, Philippines

Debt Relief Is Not Enough

By Dionne Jackson Miller

Lidy Nacpil, Secretary-General of the Freedom from Debt Coalition, an organisation created in 1988 at the height of the debt crisis to change the debt policies of the Philippine government and to join the international campaign to cancel the debt of developing countries, was a panellist at yesterday's conference on external debt. Nacpil spoke with TerraViva about why the people should not have to pay debts incurred by their governments, debts often tainted by corruption and illegitimacy.

How much progress has the debt relief movement made so far?

I think the progress has largely been in building the strength of people, people's movements and people's organisations, in addressing this and other economic issues. Fifteen years ago, there were hardly any major grassroots based movements that were addressing this kind of economic issue, because most often they are portrayed as very complex and far removed from the day to day lives of people, but that is really not the reality. They are very relevant to our day-to-day lives.
There has also been progress in educating opinion-makers in our country, and along the way we have had some victories in changing certain policies regarding the debt, but some of these victories are only half way. For instance, in 1993 we were able to get the Parliament to pass a law declaring a limit on debt payments, and later a ceiling on borrowing. Unfortunately, the president at that time, Corazón Aquino, decided to veto the law because she had a policy of paying all debts.

We've traditionally heard calls for debt relief, but coming out of conferences like this, we're hearing more and more about debt cancellation. What's the real difference?

The difference is that debt relief does not necessarily mean cancelling the principal. Debt relief involves a variety of schemes that are supposed to ease somewhat the burden of debt payment. However, we have become very wary of that word, because we have had all kinds of debt relief schemes but they have not really brought relief to those who are indebted, only relief to the creditors, so we look at it as creditor relief.
Theoretically, we can appreciate some measure of easing the pain, but what has happened historically, is that we have seen that even if there were some kind of relief it was very quickly overcome by an exacerbation of the problem. We believe it's high time not to simply be content with a few minor improvements, but for us to develop a worldwide movement that really addresses the roots of the issue.

There has been the attempt to portray debt payment as a moral obligation, saying that the developing countries incurred this debt and must repay it. How do you respond to that?

This is precisely why a very important goal of our movement is to educate people, make them change their way of thinking about it, because the dominant approach - which is promoted by the creditors themselves - is that the South is poor, it borrowed money, now it cannot pay and this is a warped view of reality.
It's really a view meant to keep us helpless and even make us grateful for the creditors to continue to lend us money and make us even have to bow down to whatever they impose on us as conditions for continuing to lend us money. Internationally, the terms of the debate assume pretty much that there's nothing wrong with the debt, these are really debts, and assume that it's simply a question of the South being too poor to pay, or worse, wondering who among the South is too poor to pay.

How do you justify calling some of the debt illegitimate?

There are many aspects to this. The debts were incurred without the participation of our people, without their consent, so why should they pay? They did not benefit from this debt, other people benefited, and these debts were even used against the people. Debts are tainted with bribery, fraud, debts contracted by unconstitutional and illegitimate parties like dictatorships, military governments.

If there is debt cancellation, how do you ensure that development is achieved in the South?

It's truly important for this to be seen as a process of empowering the people of the South so they can exercise their will for their lives, societies and economies. So short of changing the governments in the South - which should be done - we should have very strong people's movements, social movements to be able to force governments to listen and make use of the money to promote the welfare of the people.

The nations of the North are very powerful. How realistic is it to hope for cancellation of the South's debt?

We are not actually just basing our hopes on cancelling. That's why we are saying that there should be a consciousness of our right not to pay if they do not cancel. In fact we shouldn't wait forever for them to cancel before we consider stopping payment. But there has to be a tremendous political movement and organisation of people, in order for this to be a realistic option.

Do you see the South reaching that point?

If we don't have hope for that we shouldn't even be here. So I guess the fact that people are here says that there's a lot of hope for changing the world.

How does Argentina's situation fit into this perspective?

The Argentinean situation is a very good example showing that it's not enough to have debt relief. Argentina, the Philippines, Mexico, Brazil were under a debt relief programme in the early 1090s - the Brady Plan. And it just proves that the problem did not end there. The creditors simply wanted us to have a 'sustainable level of debt' so they could lend to us again.