Alecks Pabico, Inside PCIJ
October 9, 2006

Norway’s decision earlier this month to cancel some of its Third World debt claims after implicitly acknowledging them as illegitimate has inspired debt activists around the world: campaigners in the Philippines have since called on the Arroyo administration to stop paying back suspect loans incurred under former president Ferdinand Marcos, reports Alecks Pabico for Inside PCIJ (Philippine Center for Investigative Journalism).

The Philippines’ debt watchdog Freedom from Debt Coalition (FDC) welcomed Norway’s decision as a step in the right direction. “It can be done!” said Ana Maira R. Nemenzo, FDC president.

“Without doubt, this is a momentous victory not only to the resilient debt movement but more importantly, to the peoples of the world greatly suffering from the burden of illegitimate debts. This development clearly registered our concept and perspectives
regarding illegitimate debts and the accountability many creditors must concede too in helping plunge many poor countries in the deadly cycle of debt.”

While lauding the efforts of the different debt movements – particularly the anti-debt advocates in Norway – FDC also heaped praise on the Norwegian government and its civil society counterparts “not only for doing the right thing but also because of their political
courage amid strong opposition from the international creditor community.”

Aside from highlighting the issue of illegitimate debts, Nemenzo said Norway’s debt cancellation has also debunked the firm assertion by the global creditor community that poor countries must repay all their debts at all costs.

“At the same time, it sets a historic precedence for lenders to admit responsibility and liability for plunging many poor nations into the spiral crisis of debt due to their unjust, irresponsible and flawed loans,” she said.

In this light, the FDC challenged the Arroyo government to stop pursuing a “dim-witted policy of religiously paying all our debts down to the last centavo, of which many are illegitimate,” particularly [in regard to] appropriations for interest and principal payments [as of late 2005, US$783 million in outstanding debt incurred by former president Marcos].

The group also called on Arroyo to immediately investigate and review all compromise
deals [PDF] entered into by the Presidential Commission on Good Government (PCGG) and other government agencies. It also dared the Senate to pass Joint Resolution No. 1 which calls for the creation of a  Congressional Debt Audit Commission that will be responsible for the investigation and audit process of all public debt.