June 4, 2008

TEGUCIGALPA, Honduras/GENEVA – "As Christian brothers and sisters, we must fight for our vision of human development without descending into extremes of affluence and poverty." Ecuadorian Minister of State Ricardo Patino made these remarks at the 2008 conference of church leaders from the Lutheran World Federation (LWF) member churches in Latin America. Illegitimate foreign debt was one of the major discussion topics of the 31 March to 4 April gathering in Tegucigalpa, Honduras.

"We have discovered errant clauses in a number of treaties that have strongly impaired previous Ecuadoran governments with regard to legitimate legal rights," said Patino, who is also president of the national Commission for the Complete Auditing of Public Debt (Comision para la Auditoria Integral del Crédito Publico – CAIC). Ecuador's President Rafael Correa founded CAIC in July 2007 to look into the legitimacy of the country's public debt between 1976 and 2006.

As an example, Patino pointed to a treaty clause signed by the government, in which it relinquished its claims to any legal rights irrespective of whether or not the law would be in its favor. "There are treaties that stipulate that even if the Ecuadoran government were to overpay its creditor banks, the banks would have no obligation to return these funds." When asked whether Ecuador had refused to repay any of its foreign debt, Patino replied: "If illegitimate actions can be proven in the course of investigating the treaties or the treaty negotiations, we will not repay such debts. However, the Ecuadoran government will repay its foreign debt in cases where transactions have taken place legally and legitimately."

Patino expressed his appreciation to the LWF and Latin American Council of Churches (Consejo Latinoamericano de Iglesias-CLAI) for their support in the process of reviewing Ecuador's foreign debt. "We received your support when we were but a small office in a university. Now that we are part of the government, we hope to realize that which we demanded from the government back then. We are grateful that you continue to support us in this effort," he added.

Rev. Martin Junge, area secretary for Latin America and the Caribbean in the LWF Department for Mission and Development (DMD), described Patino's participation in the regional church leadership conference as significant. "We are pleased that the minister accepted our invitation to come and report to the region's church leaders on Ecuador's foreign debt review," said Junge. The Latin American theologian noted that the Ecuadorian government invited the direct participation of the LWF, which currently chairs CAIC's working group on the legal aspects of foreign debt.

The LWF member churches in the region started the advocacy program on illegitimate foreign debt in 2004. Supported by DMD, the program's goal is to raise awareness at various levels of the church about the illegitimacy of foreign debt, both in the developing countries and industrialized world.

Delegates to the 2003 LWF Tenth Assembly said in a public statement that the debt burden was "a major barrier against eradication of poverty and fulfillment of basic human rights for all." The representatives of LWF member churches urged international financial institutions and "the dominant nations in the world" to accept responsibility for the bad policies, decisions and practices, which had led to the debt crisis. They underscored "an urgent need to develop mechanisms at an international level in order to find ways" to introduce justice-oriented debt management.

Lutheran World Information