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Campaigns (5)

Castries Declaration on Debt Sustainability and Financing for Development

PSI affiliates in the Caribbean sub-region have committed to developing both a national, sub-regional and global response on debt sustainability focusing on capacity building, advocacy and coalition-building to audit sovereign debt; propose alternative solutions to re-structure debt in combination with progressive tax reforms and economic development plans.

Sounding the alarm on dangerous public-private partnerships (PPP’s).

Public Services International, EURODAD and other CSO partners jointly urge all those concerned with justice, equality, sustainability and human rights to resist the encroachment of PPPs and to push instead for high-quality, publicly-funded, democratically-controlled, accountable public services. The well-being of our communities and societies depends on it!

Education is not a tradable good

Among different type of private actors involved in education, commercial schools raise specific challenges. Commercial schools have been defined as schools “whose one of the main objectives (though not necessarily unique) is to develop commercial activities out of education services and to defend their own interest to the detriment of the general interest. They consider education as a tradable good, which involves in particular that they intend to extend their activities and model by entering in competition with other education establishments, to increase their turnover, and to increase their profit.” The following page is meant as a monitoring resource page to critically reflect on the development of this type of schools against human rights standards.

Taking back control

Governments must ensure that they act in the best interest of their communities by providing quality public services. The provision of essential services should be their highest priority. Privatisation should only be considered if it has been demonstrated to be in the best interest of communities and the best use of taxpayer funding.

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Castries Declaration on Debt Sustainability and Financing for Development

PSI affiliates in the Caribbean sub-region have committed to developing both a national, sub-regional and global response on debt sustainability focusing on capacity building, advocacy and coalition-building to audit sovereign debt; propose alternative solutions to re-structure debt in combination with progressive tax reforms and economic development plans.

PSI affiliates in the Caribbean sub-region have committed to developing both a national, sub-regional and global response on debt sustainability focusing on capacity building, advocacy and coalition-building to audit sovereign debt; propose alternative solutions to re-structure debt in combination with progressive tax reforms and economic development plans.

PSI organized a workshop on debt sustainability in St Lucia, 3 July 2018, with the participation of Jubilee USA network and Jubilee Caribbean. Participants examined case studies and discussed the impact of the recent hurricane season.

PSI affiliates in the Caribbean then adopted a joint declaration on Debt Sustainability and Financing for Development committing to developing both a national, sub-regional and global response on debt sustainability which will focus on capacity building, advocacy and coalition-building to audit sovereign debt; propose alternative solutions to re-structure debt in combination with progressive tax reforms and economic development plans.

Debt sustainability packages must include legislation to ensure budget responsibility and accountability, reduction of debt to private and hold-out creditors, plans to prevent austerity and curbing of professional and corporate tax avoidance to protect public sector jobs. PSI affiliates in the Caribbean aim for a significant involvement in IMF and government negotiations, through lobbying Caribbean ambassadors, finance ministers and prime ministers.

Projections are that, on its present course, by 2020, debt will remain unsustainable in 11 Caribbean small states, and there will be no change in 2030 when the UN’s Agenda for Sustainable Development will have run its course.

Public Services International

Castries Declaration on Debt Sustainability and Financing for Development

Adopted by PSI’s Sub-regional Committee for the Caribbean, St Lucia, 4-5 July 2018 

INTRODUCTION // Projections are that, on its present course, by 2020, debt will remain unsustainable in eleven Caribbean states which are among the twenty most indebted states in the world, and there will be no change by 2030 when the UN’s Agenda for Sustainable Development will have run its course.

The consequences of sovereign debt crises are devastating. They usually include cuts to health, education and other social services, privatisation, unemployment, cuts to workers’ real wages and conditions, cuts to pensions, raising regressive taxes on labour and consumers and undermining democracy as sovereign governments become dependent on financial institutions such as the World Bank and IMF (IFI’s) and their conditions.

The rhetoric that countries are undisciplined and that people have been living beyond their means is rarely true. More often, sovereign debt is due to political incompetence and/or corruption of governments and to their protection of the interests of domestic and global elites. Creditors also are co-responsible for creating unsustainable debt levels. Additionally, governments of the richest countries fail to impose international rules that would force their Multi-national Enterprises (MNEs) to pay tax where they operate.

Tragically, austerity measures prescribed by the IFI’s and creditors worsen the problems. The lessons learned from Africa, the Americas, and more recently Greece and Puerto Rico, show how austerity undermines long-term stability and growth. The International Monetary Fund (IMF) notes the chief reason for inequality and rising poverty rates is unsustainable debt. Caribbean states and territories face austerity policies, additional joblessness and growing poverty rates as they try to prevent defaults and renegotiate high debts.

DISCUSSION // During the meeting on debt sustainability and financing for development, we heard intense testimonials from PSI affiliates in the region, making it very clear that debt restructuring is at the heart of the concerns of the trade union movement. When debt default is looming, it sways like a sword of Damocles above public services and proper funding of public goods. It was noted that the immense sovereign debt many Caribbean countries are faced with is the consequence of bad old credit agreements, high interest rates and recent policy choices that only aggravate the situation through the proliferation of public-private partnerships, both in infrastructure and service-provision.

Recurring natural disasters have deepened the debt crisis substantially, making it even more difficult to weather future hurricanes and other emergencies. Due to decades of de-funding public services and lack of investment in infrastructure these have been weakened, reducing the capacity of Caribbean states to respond to the challenges climate change generates, while making it also ever more costly to recover from these devastating events. A further cycle of de-funding, reducing public services and worsening working conditions are the immediate result of debt restructuring packages as proposed by the IFIs. While the last hurricane season was recorded as one of the most violent in recent history, according to experts the next one will be no less terrifying.

Some islands, like Dominica and Barbuda, have suffered massive damage, while others have been less affected. What all states have in common is the threat to public services and a need to respond to the neo-liberal mantra of privatization and the empty promises of PPPs. Caribbean states are mostly middle and high-income countries, which therefore have no access to concessional funding. Servicing high debt in combination with low growth, narrow fiscal space and foreign exchange deficits have a negative impact on sustainable development.

PSI and its affiliates have another vision for the future. We need a policy shift to be able to deliver a human-rights based agenda, with a key role for public services, putting people over profit and ensuring people-first development. Governments need to take the commitment made in the global compacts seriously and step up to the plate, instead of giving way to the interests of the few.

Resisting pressure from a handful of multinationals in each sector, looking at their track record in other countries and regions, analyzing the driving forces behind privatization and PPPs are at the heart of such a strategy. We need to closely monitor and analyze existing PPP agreements on water, airports, prisons and other sectors, which also means evaluating the social and budgetary impact of such arrangements. We need to have a holistic vision of the financial, taxation and trade policies required to defend and promote public services for all, provided by public actors – and that includes promoting progressive taxation systems and making sure that all economic actors pay their fair share, as clearly stated in PSI’s Programme of Action adopted at Congress in November 2017.

PSI affiliates recognize the constructive contribution made to the meeting by Jubilee USA Network and Jubilee Caribbean, and their proposal on debt relief as a crisis response. Debt relief has the potential to provide immediate access to resources, which are already in the hands of the authorities and thus do not have to be mobilized through lengthy pledging exercises. They will normally have been earmarked for debt service in the national budgets. And they would be mobilized for emergency relief and reconstruction only in cases of obvious and undeniable need.

The process would imply two debt relief operations, which would respond to two dimensions of the crisis: a debt payment moratorium which would make any resource from the government to external creditors immediately available for emergency relief, and a pre-designed framework for restructuring the entire stock of existing public external debt in a way which provides enough fiscal space for medium-term reconstruction under the premise that the country should not find itself in another debt distress situation when confronting the next crisis within the statistically average timeframe.

CONCLUSION // Therefore, PSI affiliates declare that we are committed to developing both a national, sub-regional and global response on debt sustainability, that will focus on capacity building, advocacy and coalition-building to: audit sovereign debt; propose alternative solutions to re-structure debt; in combination with progressive tax reforms and economic development plans. This requires developing skills, building partnerships with like-minded organizations and strengthening young workers’ groups in unions.

Debt sustainability packages must include legislation to ensure budget responsibility and accountability, reduction of debt to private and hold-out creditors, plans to prevent austerity and curbing of professional and corporate tax avoidance to protect public sector jobs. We aim for a significant involvement in IMF and government negotiations, through lobbying Caribbean ambassadors, finance ministers and prime ministers.

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News (5)

article

Enclosure, Dispossession and Disaster Capitalism in Antigua and Barbuda

As recovery efforts from Hurricane Irma proceed in Barbuda, concerns are being heard about the privatization of land ownership. “The new law does this by granting private property deeds to the Barbudans. But also by enclosing them in their historical village, Codrington, and undermining their historical use of commonly held land for farming, grazing of animals, and restricting their use of beautiful pink sand beaches.”

article

Prime Minister pushes to privatize land ownership to attract tourism-oriented foreign investment

After more than 150 years and the Category 5 Irma Hurricane that devastated most of the island infrastructure, “the president* of the two-island nation, Gaston Browne. is pushing to end the traditional customs of Barbuda and privatize land ownership to attract tourism-oriented foreign investment.” Annette Henry, manager of a Barbudan social media group, says “selling the island as a commodity will just be the end of our utopia—what we know as paradise.” *Correction: Gaston Browne is Antigua and Barbuda's Prime Minister.

Videos (3)

Interview: Crisis Narratives and Debt in the Caribbean (Don Marshall, Tetteh Hormeku-Ajei)

In this 7-minute video, Third World Network-Africa's Tetteh Hormeku-Ajei interviews Dr. Don D. Marshall, Director of the Sir Arthur Lewis Institute for Social and Economic Studies at University of the West Indies: Cave Hill. Don shares his views on heterodox and feminist approaches to questions of debt and development, in the context of normative frameworks set by credit rating agencies and the IMF and their regional implications in the Caribbean.

Source: YouTube

RESEARCH (4)

Focus: Evolution of the Caribbean Debt

Like many other countries, the Caribbean territories have struggled to emerge from the global financial crisis of 2008. These small island economies have since been posting meagre growth and a considerable debt burden, which threatens macroeconomic stability and programs aimed at social protection. As is to be generally expected, the financial crisis created an adverse impact on debt sustainability of many of the economies in the sub-region. These challenges however, did not begin with the crisis but are a reflection of more fundamental structural weaknesses in the economics of the region.

Source: pop-umbrella.s3.amazonaws.com

Caribbean development report: A perusal of public debt in the Caribbean and its impact on economic growth

This paper examines the genesis and evolution of debt and debt overhang in the Caribbean with individual case studies, to extract lessons and make broad recommendations with regard to appropriate mechanisms and policy measures that can be implemented to reduce the debt burden of the subregion. The econometric model utilized in the paper has shown that a one percent increase on debt to GDP ratio causes a 0.015decline in real GDP growth for the countries in the Caribbean panel, suggesting that debt has a pernicious effect on growth on Caribbean economies. What is even more worrisome was that Caribbean economies did not demonstrate the traditional non-linear (bell-shaped) effect of debt on growth, where there is a range in which a positive relation between debt and growth exists. Traditionally, as debt increases, so does economic growth, up to a point. After this maximum point is passed, the relationship turns negative, where increases in debt cause a decrease in economic growth. In contrast, using the Caribbean countries selected in the panel over the period 2000-2015, it was empirically found that, at all levels, increases in debt resulted in a decline in economic growth for Caribbean economies. It was also shown that the financial crisis negatively affected growth in the Caribbean, lending credence to the view that Caribbean economies are exceedingly vulnerable to exogenous economic shocks.

Source: repositorio.cepal.org

Reimagining regionalism Heterodox and Feminist Policy Proposals from Africa and the Caribbean

Reimagining Regionalism is a compilation of five policy papers that present heterodox and feminist policy proposals around fundamental questions of economic policy and sustainable development: trade, climate change, fiscal governance, agriculture, and debt. Each paper addresses separate but related policy areas fundamental to the Caribbean, the African continent, and the overlaps between them to elaborate regional specificity and analytical clarity to bolster and refine ongoing work in these contexts.

Source: library.fes.de

Financing for Development and the SDGs: An analysis of financial flows, systemic issues and interlinkages

The Sustainable Development Goals (SDGs) are ambitious objectives: not only do they all for an end to poverty and hunger, they also recognise the need to fight inequality, including gender inequality, protect the environment, provide decent work, ensure sustainable consumption and production and achieve global peace. Unlike the Millennium Development Goals that preceded them, they apply equally to all nations. This paper ends by making recommendations aimed at policymakers in developed countries on how they can support changes at the international level and change their own policies, in order to enhance the policy space for developing countries to chart their own paths to prosperity.

Source: pop-umbrella.s3.amazonaws.com

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