The Foreign Debt Tribunal gathered 1200 people from April 26th to 28th, 1999, in Rio de Janeiro, Brazil. Organized by the National Conference of Bishops of Brazil, Caritas, the National Council of Christian Churches, the Ecumenical Service Coordination Bureau, the Popular Movements Center, the Movement of Landless Rural Workers and the Institute of Brazilian Lawyers, with the support of Corecon/RJ, Senge/RJ, Sindecon/RJ, IERJ, Koinonia and PACS, the Tribunal convened to hear the case of Brazil's foreign debt and to reinforce the Jubilee 2000 Campaign to cancel the debt of the most heavily indebted, lowest income countries.

Brazil is considered an "emerging" nation with a medium income level. Its income distribution profile, however, is among the worst in the world, with one quarter of its population - that is, 40 million people - below the poverty line. The Tribunal was thus called on to identify the relationship between Brazil's foreign debt and this situation of injustice and misery. In addition to pinpointing the factors that lead to and constitute the foreign debt, and then cause it to grow out of all proportion, and to identifying those responsible for it, the purpose of the Tribunal was to define alternative policies and strategies of action for sustainable means to surmount the crisis of foreign indebtedness and its social and environmental consequences.

After four sessions, in which an extensive and diverse body of documented material was submitted and testimony and declarations heard from Brazilians and specialists from other countries, [...] this People's Tribunal, constituted by representatives of various sectors of the Brazilian public, reached the following verdict:

Whereas:

1. According to the studies and figures submitted to the Tribunal, the debt of the poorest, most heavily indebted countries has already been paid, and in current accounting terms, cannot be paid;

2. Since last rescheduled five years ago, Brazil's debt has increased from US$ 148 billion at year end 1994 to US$ 270 billion in March 1999, while in the same period, around US$ 126 billion was paid to foreign creditors. This rate of borrowing is unsustainable to the point that almost all new contracts are tied to servicing the existing debt, thus closing a vicious circle of indebtedness;

3. The USA's unilateral decision at the end of the 70s to raise interest rates from their historic levels of between 4 and 6 percent to more than 20 percent, in only a few months, constituted a betrayal of good faith in the contracts and, in addition to forcing debtor countries to take out new loans in order to pay interest, entailed additional payments which meant losses of US$ 106 billion for Latin America;

4. The fact that creditors impose a risk premium on debtors so as to cover themselves against possible inability to pay entitles the latter to declare themselves insolvent without onus;

5. Governments aligned with major corporations and banks with foreign debts have made a practice of nationalizing private foreign debt and socializing the related costs, thus committing public funds still further to servicing the foreign debt;

6. Strategic public enterprises have been used as instruments for excessive borrowing, thus compromising their financial health and capacity for investment, which has served as a pretext for later privatization;

7. There exists a clear connection among foreign debt, excessive internal public borrowing and efforts to attract short-term foreign capital, which is subjecting Brazil to a policy of extremely high interest rates;

8. As the Brazilian government regards the financial system as an absolute and an end in itself, it has sacrificed the part of the budget earmarked for social policy spending and for invigorating the domestic economy in order to keep financial debt payments up to date. As a result it has abandoned health, education, policies for employment, for the demarcation of indigenous lands and to ensure conditions for the survival of indigenous peoples, to give due value to the elderly and children, to carry out agrarian reform, and to conserve and restore the environment;

9. The IMF's economic and adjustment policies have proven disastrous for countries subjected to them and serve to increase still further those countries' debt and other foreign liabilities, thus constituting a moratorium without end on the social and environmental debts, whose creditors are our children, working women and men of the cities and countryside, blacks, indigenous peoples and Nature;

10. The USA manipulates the UN, WTO, IMF, World Bank and NATO to suit its strategies to dominate and control the peoples of the world;

11. Brazilian public borrowing has always favored the interests and privileges of the dominant élites;

12. Brazil's excessive indebtedness was generated particularly in the last three decades, which were marked by 21 years of dictatorship and by a transition to civil governments which completed and connived with the surrender of economic policy to financial capital;

13. This indebtedness was constituted by dictatorial - and thus illegitimate and anti-popular - governments, and their creditors, besides serving as their accomplices, were aware of the risks attendant on these loans;

14. The expansion of the debt is connected with these élites' connivance with foreign private, governmental and multilateral financial institutions;

15. The foreign debt constitutes an ongoing violation of the International Covenant on Economic, Social and Cultural Rights drawn up by the UN on December 16, 1966, which calls for recognition of each nations' right to self-determination, to freely pursue its economic development and dispose freely of its natural wealth and resources, and also requires that in no case may a people be deprived of its own means of subsistence;

The members of the foreign debt tribunal hereby find unanimously that:

Brazil's foreign debt was constituted in breach of Brazilian and international law, and without consulting the Brazilian public. It has favored the élites almost exclusively to the detriment of the majority of the population and is prejudicial to national sovereignty. It is therefore ethically, legally and politically unjust and unsustainable. In real terms it has already been paid and persists only as a mechanism for subjecting and enslaving society to the financial power of usurers and globalized capital, and for transferring wealth to the creditors. For these reasons, this Tribunal condemns the Brazilian debt process, which entails subordination to the interests of international financial capital and the wealthy countries, backed by the multilateral organizations, as grossly unjust and illegitimate. It holds the dominant élites responsible for the excessive borrowing and for having abdicated from any development plan of Brazil's own. It holds responsible the governments and politicians who support and further plans to assign Brazil a subordinate position in the globalized economy. It holds responsible those economists, jurists, artists and intellectuals who provide them with technical and ideological underpinning. It holds responsible the dictatorship of the major media that endeavor to legitimize the debt and stifle debate over alternatives.

It also hereby resolves to communicate this decision to Brazil's legislative, executive and judiciary authorities at the federal, state and municipal levels, that they respect it for the legitimacy of this Tribunal's structure and social function.

Taking upon itself the hope embodied in peoples' struggles for alternatives in their livelihoods, social relations, and economic and social organization, this Tribunal proposes to all the women and men of Brazil the following commitments and strategies for action:

• The union of all peoples in favor of a general and unrestricted canceling of the foreign debts of the most heavily indebted poor countries, the return of the wealth pillaged from them, with no conditions attached other than that the resources so saved be applied to paying off the social debts under the oversight of society itself, and that the human rights of all citizens be respected in full.

• An audit of the public foreign debt and of the whole process of Brazil's indebtedness, with the active participation of civil society, so as to ascertain in accounting and legal terms whether there is still debt to be paid, from whom it should be collected, and to establish democratic rules for overseeing borrowing.

• A sovereign moratorium, denunciation of the Agreement with the IMF and redefinition of the debts in line with the audit results and with strengthening national sovereignty.

• A development policy centered on the rights of the person and society, built chiefly on Brazil's own material and human resources, and going beyond the current logic and practice of irresponsible borrowing.

• Firm exchange controls, which equip the government to restrain speculation and re-encourage investment in production, including effective mechanisms to control and inspect all the illegal forms in which Brazilian and foreign currencies, and goods in general, enter and leave the country.

• The re-nationalization and democratization of strategic enterprises.

• The rescheduling of state and municipal debts, with the resources so saved tied to repayment of social and environmental debts, and the refounding of Brazil's federative pact on a democratic, participatory basis.

• Reinforcement of mobilizations and campaigns such as ATTAC, which demand that mechanisms be set up to regulate and tax the circulation of international speculative capital, with a view of creating a fund earmarked for restoring those most impoverished to a decent life.

• The union of Latin America and the Caribbean peoples in support of common alternative policies and strategies for the continent, in order to confront together the vicious circle of indebtedness and the other factors of impoverishment and subordination that afflict the whole continent.

Participation of the Jubilee 2000 Campaign, the World Council of Churches and other Brazilian and international institutions, in a mobilization that will lead democratic States to propose to the UN General Assembly a joint suit be brought before the International Court of Justice at The Hague to judge both the processes that gave rise to and hypertrophied the foreign debt of the heavily indebted impoverished countries, and those responsible.

This Tribunal is a symbolic milestone on a long march. It therefore calls on all Brazilian men and women to join, in hope and without fear, in the initiatives that will grow out of this judgement and to continue to take their stand, in the streets and public places, until we manage to make Brazil truly a motherland for us all, one that offers to all the means to live a life of dignity and full citizenship.

This is our decision. Let it be published and proclaimed. Subscription is hereby authorized to none but all men and women of good faith.

* A national plebiscite on the external debt is planned from 2 to 7 September, 2000

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