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For an integral audit of public indebtedness

Ecuador at the cross-roads


15 August 2007

This collective work was carried out in July 2007 at the request of AFRODAD by a team at the CADTM composed of Benoît Bouchat, Virginie de Romanet, Stéphanie Jacquemont, Cécile Lamarque and Eric Toussaint.

It was revised by Myriam Bourgy, Damien Millet and Renaud Vivien.

The English translation was done by Elizabeth Anne, Vicki Briault, Judith Harris and Christine Pagnoulle.


Chapter 1: Ecuador’s Illegitimate Debt

- A. Financial and economic crime against human development
- B. Rafael correa’s government: towards a sovereign debt policy
- C. The doctrine of illegitimate debt

  • 1. Odious debt
  • 2.Illegitimate debt

- D. The origins of Ecuador’s debts

  • 1. The process of indebtedness in Ecuador
  • 2. The illegitimacy of debts and payments in Ecuador

Chapter 2 : Legal and institutional issues concerning illegitimate debt

- A. The context
- B. Ecuador’s illegitimate debt
- C. The non-respect of legal provisions
- D. Textbook cases

  • Odious loans to the dictatorship
  • Unacceptable loans
  • Inappropriate loans
  • Unacceptable conditions
  • Conditions violating internal law

Chapter 3: Information and statistics in Ecuador

- A. Debts and creditors

  • Loans from other Countries
  • Loans from private credit organisations
  • Loans from multilateral credit organisations

- B. Objectives and results

Chapter 4: The socio-economic impact of the debt

- A. An unsustainable debt burden imposed by the creditors
- B. Economic policies imposed by the creditors
- C. The social and economic consequences

  • Increasing poverty, rising inequalities and worsening living conditions
  • Mass emigration
  • Destruction of the environment
  • Non respect of commitments

Chapter 5: Renegotiating the debt

- A. Moratoria: wasted opportunities
- B. Exchanges and rescheduling

  • The Brady Plan
  • Global Bonds
  • Restructuring the bilateral debt with the Paris Club

- C. Debt cancellations

  • The HIPC initiative and Ecuador
  • The decision of the Norwegian government in October 2006: an unprecedented acknowledgement by a creditor State of its responsibility in bad lendings

    Chapter 6: Conclusions and recommendations

- A.Identifying Ecuador’s illegitimate debt as a prelude to political sovereignty
- B. The right of governments to determine the illegitimacy of a debt
- C. The World Bank and the IMF are legally responsible!
- D. Actions by creditors of the North
- E. Actions by the United Nations
- F. Alternatives defended by social movements and some Latin-American governments against the debt

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