INTRODUCTION/9
from the South; restrictions on the travel and migration of
citizens from the South to the countries of the North (Chapter 8).
- Repayment of the public debt by the governments of industri
alised countries is analogous to Third World repayment of
foreign debt. The terms are different, however, since this is
largely debt contracted within the same country. Public debt
instruments are mainly bought by holders of capital. This debt
is paid back by states for whom such payments eat up an
increasing part of tax revenues, which largely come from
working people. This is another mechanism for transferring
surplus wealth (see glossary) created by workers towards
holders of capital (Chapter 8).
- Internal public debt in the South has grown enormously,
especially in Latin America and Asia. Repayment is another
mechanism for transferring a part of surplus wealth to holders
of capital (Chapter 14).
3 0. The World B ank and the IMF are controlled by the main powers
of the capitalist centre. These institutions intervene daily in the
political life of debtor countries to decide the main orientation of
policies pursued by governments of the South and of Eastern
Europe (Chapters 9, 11, 12, 14, 15 and 16).
- These institutions have a very powerful weapon for blackmail.
If the governments in question do not make payments on their
debts in line with the conditions dictated by the IMF, the World
Bank and the Paris and London Clubs, their line of credit will be
cut off. In such cases, there is a serious threat that all sources of
foreign financing will be closed off (Chapters 11,12 and 16).
- Much of the debt in question is illegitimate (Chapter 15).
3 3. The peoples of the Third World amply repaid contracted debt
before the rise in interest rates at the beginning of the 1980s, for
which they are in no way responsible (Chapters 7, 8,14 and 15).
- Yet the Third World is four times more indebted than it was at
the time of the 1982 crisis, for it had to borrow anew to pay the
higher interest rates (Chapter 8).
- Real income from Third World exports has dropped even though
total volume has actually increased. The terms of trade (see
glossary) between the South and North have deteriorated for
the South (Chapters 7, 8,12, 14 and 16).
- The biggest Third World debtors in the 1980s were Mexico,
Brazil and Argentina. The very character of their foreign debt
