NOT IN OUR NAME

Further indebting Africa is not the way to save the Spanish economy.

The campaign "Who Owes WhoM?" wishes to express its strong rejection of the Spanish government's latest plan to reassign 100 million Euros from the Development Aid Fund (FAD) to finance infrastructure projects in Africa that favour Spanish exporters.

This plan, whose aim is to help Spanish companies internationally, will act to further indebt the recipient countries. FAD credit has become a tool of the Spanish state to generate foreign debt in third world countries. These credits are granted to the recipient countries with better financial conditions than those available on the market, making them more attractive than commercial credit.

However, the recipient country takes on this debt without the freedom to award its own contracts to carry out the projects. FAD credits are granted only on the condition that Spanish goods and services are used.

In addition to increasing their national debt and forcing these countries to neglect their own internal needs (some countries assign more than 30 per cent of their budget to debt repayment), this situation is destroying the ability of local people to develop their own industrial base. As Spanish companies are carrying out the projects financed by these credits, the Spanish economy benefits rather than the economy of the poor countries. This is inappropriate for a programme whose main aim should be overseas development.

The Spanish government justifies this policy as helping to diversify and increase Spanish export activity, improving the image and position of the country in the international markets and providing a spearhead in the fight against the financial crisis. We believe it is completely unreasonable to use development aid in this way. Furthermore, we don't believe that further indebting African countries is the correct way for us to overcome a downturn that is affecting these countries as well.

The "Who Owes Who?" campaign would also like to speak out against the plan of the Spanish government to add increased flexibility to the guarantees made at public expense that are managed by the Spanish Export Credit Guarantee Company (CESCE). This is another tool used to increase the debt of developing countries.

The campaign believes that instead of promoting these instruments for generating third world debt the Spanish government should without further delay legislate to reform FAD and CESCE, as it is obliged to by various articles of the law 38/2006 of 7 December 2006, which regulates the management of foreign debt.

We demand that the reforms give priority to the human, economic, social, cultural and ecological rights of the recipient countries of these funds, ahead of Spanish commercial interests, and the elimination of credit instruments such as FAD from the budget of overseas development aid (AOD). In addition, we call on the Government to ensure that the law establishes the same legal responsibilities for companies benefiting from these programmes as are currently in force in Spain.