WE ARE NO DEBTORS! WE ARE CREDITORS OF A HISTORICAL, SOCIAL AND ECOLOGICAL DEBT!
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PARAGUAY - Interview with the economic and political analyst Eric Toussaint |
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Wednesday, 07 January 2009 |
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Interview with the economic and political analyst Eric Toussaint
Sunday December 28th 2008
Belgian analyst Eric Toussaint argues that Paraguay could request the
invalidity of the treaty on the grounds of the principles included in
the Vienna Convention. He suggested to Lugo that a comprehensive
auditing of the country’s debts should be carried out, just as Ecuador did.
By Roberto Irrazábal
http://www.ultimahora.com/notas/183220--El-Tratado-de-Itaip%C3%BA-firmado-en--1973-podr%C3%ADa-ser-declarado-nulo-
A few days ago, the chairman of the Committee for the Abolition of Third
World Debt Eric Toussaint visited the country. He was invited by
President Fernando Lugo, who asked him to be his adviser on important
subjects such as the Itaipu Treaty, the global economic crisis, the
review of external debt and the integration processes.
The Belgian expert says that in case Paraguay does not obtain the
renegotiation, it could request the nullity of the Itaipu Treaty
invoking the Vienna Convention, which regulates all international treaties.
- How do you see the Paraguayan claims towards Brazil regarding Itaipu?
-I have studied the 1973 Itaipu Treaty and in my opinion, it could be
declared void by both parties, or by Paraguay alone if Brazil does not
agree. International law allows a State to make a sovereign act of
repudiation or abrogation of a treaty. In my view, this option does not
mean leading to a confrontation with Brazil, but renegotiating another
treaty, which would be fair and comply with international law. Paraguay
does have this right, but what is important is first to seek a friendly
settlement.
- How can Paraguay obtain nullity?
-This treaty was signed between two dictatorships and it includes
several articles which infringe the Vienna Convention, a pact that all
countries must respect and that was signed in 1963 to regulate
international treaties. The respect for the equality of the parties,
among other aspects, is one of the arguments.
- What do you suggest about Paraguay’s debts?
- We talked with President Fernando Lugo about a comprehensive audit of
the debts claimed from Paraguay, the binational debts related to Itaipu
and Yacyreta, the external public debt which amounts to around 2 billion
dollars and the internal public debt. This is what I recommend drawing
from various experiments, among which the Ecuadorian one.
- How was the experiment in Ecuador?
-Ecuador organised, following a decision of the Presidency of the
Republic, a national and international commission, with twelve delegates
for the former and six for the latter. Four State bodies also
participated: the National Audit Office, the State Prosecution Service,
the Anti-Corruption Commission and the Ministry of Economy and Finance.
- Did you take part in the commission?
-I was a member of this commission and for 14 months we have been
analysing the contracts in order to identify the legitimate and
illegitimate debts, so as to make recommendations to the government,
which took the decisions.
- What could happen here?
-Paraguay could use the experiment in Ecuador and adapt it to its own
situation and needs, and set up a commission. In this case, I would be
willing to bring my technical support.
-Venezuela and Bolivia also announced they would take this measure. Is
it becoming a regional tendency?
-It is a tendency. Even in Brazil fifteen days ago a parliamentary
commission was set up in Congress to investigate the debt. The audit has
historical roots since in the 1930s Getulio Vargas’s government in
Brazil carried out an audit which revealed many breaches of the law and
as a result, Brazil obtained a reduction of more than 50 per cent on its
debts.
- How do you see the integration process in the region?
-When we talked with President Lugo we discussed the role of Paraguay,
and what I pointed out is that it would be very interesting to build a
common axis between the small countries that are part of the integration
process, namely Bolivia, Ecuador, Paraguay and Uruguay.
- What is the objective?
-There are various initiatives of regional integration and also the plan
to form a Bank of the South with 7 countries, and the voice of the small
countries is not audible enough against the giants such as Brazil,
Venezuela and Argentina. Paraguay needs to find a way to determine
common criteria between the small countries so as to reach a balance of
power within the block and have the small countries’ interests respected.
- What are the threats coming from the big countries?
- The great regional powers tend to give priority to their commercial
and economic interests, at the expenses of their small counterparts.
This is the case with Itaipu, Yacyreta. Thus there must be mechanisms
that reduce asymmetries between the countries of the block so that
integration works.
- How was the European experiment in this respect?
- In the European construction, the stronger countries such as England,
Germany and France transferred money to Greece, Portugal, Spain and
other member countries with weaker economies to reach integration by
reducing those asymmetries.
- What should be given priority in this process?
-It is fundamental in any integration process to have mechanisms of
transfer, to have a common architecture, a Bank of the South to finance
projects that encourage integration. In my opinion, these projects
should aim at food sovereignty, agrarian reform, providing the region
with a pharmaceutical industry that could produce high quality generic
medicines, improving the rail connections between countries, and also
common programmes related to education, communication, housing and
environment.
- And how would investments be made secure?
- I would propose the region should set up an ICSID of the South. The
ICSID is the World Bank’s Court that arbitrates in disputes between
transnational companies, private companies and governments. The problem
is that in most cases judgments are favourable to Northern transnational
companies; the ICSID is not an impartial judge, it does not take into
account the Southern countries’ priorities.
- How the system would be like?
- Latin American countries, when signing investment contracts with
transnational companies, could include in the contracts that, in case of
dispute, the complaint has to be lodged with a Latin American organ. For
me, it would mean going back to something Latin America inaugurated at
the beginning of last century, which is the doctrine of Carlos Calvo, an
Argentinean lawyer specialized in international law who said that the
jurisdiction for economic activities must be that of the region and not
that of the United States or Great Britain.
Translated by Stephanie Jacquemont
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