-DATE-
19850919
-YEAR-
1985
-DOCUMENT_TYPE-
INTERVIEW
-AUTHOR-
F. CASTRO
-HEADLINE-
CASTRO VIEWS PERUVIAN PROPOSAL ON FOREIGN DEBT
-PLACE-
HAVANA'S PALACE OF CONVENTIONS
-SOURCE-
HAVANA TELEVISION SVC
-REPORT_NBR-
FBIS
-REPORT_DATE-
19850920
-TEXT-
CASTRO VIEWS PERUVIAN PROPOSAL ON FOREIGN DEBT

FL191830 Havana Television Service in Spanish 1202 GMT 19 Sep 85

[Statements by President Fidel Castro and unidentified speaker of the Latin
American Press Forum in response to a question posed by Peruvian journalist
(Mauricio Moulder) of Lima's daily HOY during an 18 September session of
the Press Forum on the Regional Financial Crisis, at Havana's Palace of
Conventions -- recorded]

[Text] [(Moulder)] I want to make a commentary that could also be a
question and that, hopefully, will be worthy of comment from the comrade
speaker. The theme I want to discuss seems to have been dodged at this
meeting by the majority of speakers. I believe, as a Peruvian I feel almost
an obligation to point out, that in Peru today there is a concrete
alternative to the debt problem. I believe that Comrade President Alan
Garcia's proposal to pay up to 10 percent of our exports has not been
commented upon by the majority of speakers here because there is a certain
tendency to think that there exists a type of contradiction between the
Peruvian position and the position that has been approved almost
unanimously here to definitely not pay the unilateral debt.

I want to stress that the Peruvian proposal and the Cuban proposal are
absolutely in agreement with the fundamental aspect of the problem. Both
proposals reflect the belief that the debt is unpayable. So that it is
known, the Peruvian case is the first in South America where a government
has officially recognized, by the president of the Republic himself, the
prime minister, and the minister of economy, that the debt is unpayable. I
would like to cite, in that sense, a statement by the Peruvian prime
minister and minister of economy in a speech to parliament presenting all
the work plans of the new Aprista [American Popular Revolutionary Alliance,
APRA] government which said: our understanding this is the only way to
confront the problem -- referring to Latin American unity -- because it is
clear that paying $300 or $350 million a year -- referring to Peru and that
10 percent because Peru produces, rather exports, $300 or $350 million a
year, which is equivalent to 10 percent of our exports -- we cannot resolve
the problem of the debt.

One must not forget that the debt would increase by billions of dollars
annually simply through interest accumulation. I know I heard Commander in
Chief Fidel Castro say this in the closing speech at the Latin American
Youth and Student Congress. At the same time, I want to stress the
proposal of President Alan Garcid when he says, in conjunction with what
Commander in Chief Fidel Castro has expressed, that today in Peru, as well
as in Cuba, the condition of being debtors unites us. In a speech to the
municipalities' Popular Assembly meeting in Lima, Alan Garcia said: We are
establishing the length of time and the interest ourselves now. I am firing
the mayors of Peru and along with them everyone in Peru who supports that
policy. The conditions are no longer set by them. The conditions will be
set by us, at any cost. The proposal of 10 percent of exports is an
extension without measures, without time limit for payment and also the
termination of usurious and unfair interest rates that have been imposed
on us until now.

Then, what I would like is a commentary from the comrade speaker and also
from Comrade Commander in Chief Fidel Castro Ruz on the tendency of the
international press to set the Cuban proposal against the Peruvian proposal
when, it seems to me, they are in agreement since both proposals expound a
new structuring of the problem that the creditors themselves state.

If it is so difficult to think that the unilateral moratorium of the debt
will be accepted by the international banks, we believe that they would
accept the proposal of payment of 10 percent of exports with less
difficulty. In any case, we know and understand that the Peruvian proposal,
and President Alan Garcia has so stated, intended to establish roads of
unity with other Latin American countries so that another alternative can
be found, possibly even the alternative being proposed here now, which is a
unilateral moratorium.

One has to understand that the circumstances for countries like Peru,
Colombia, Ecuador, and Bolivia are different from Cuba's because they are
countries that cannot support a blockade, as Cuba has, even for 6 months.
Thus, a political alternative has to be found, such as the one proposed by
Peru, before deciding it is a simple economic alternative based strictly on
a mathematical formula. I believe, in that sense I demand, a show of
solidarity on the part of the comrades present for the Peruvian proposal
because it is not a proposal contradictory to the Cuban proposal. It is not
an antirevolutionary proposal. It is more of a revolutionary proposal since
only Peru, practically alone, is confronting today the U.S. imperialism
that has tried to impose the Brooks-Alexander Amendment and repress the
country's balance of payments and trade exchange. No, no. [applause]

[Castro] I have spoken at length on this subject. I have spoken twice on the
subject of the theories. Beginning with the EXCELSIOR interview, I studied
the different possibilities. The possibility of paying the debt with a
percentage of exports had been proposed by various persons and was one of
the different formulas presented. From the mathematical point of view, I
analyzed what it would mean to pay with 20 percent of total exports. This
was published in an interview that I imagine a lot of you must have seen.
In 20 years, $200 billion would be paid out. Supposing that although
exports exceeded $100 billion, Latin America would not pay more than 20
percent of the first $100 billion.

I did all the calculations and, as I have said, $200 billion would be paid
out in 20 years, and there would be an enormous debt at the end of these 20
years, a debt of more than $1 trillion dollars if interest rates remained
at present levels, more or less. I did my calculations using a maximum
interest of 10 percent, and I got a debt of more than $1 trillion after 20
years, although I do not have the exact figures here. I had studied that
possibility, and when the 10-percent formula was advanced at the
Continential Debt Conference, I again studied the formula and applied the
same analysis to it from the arithmetical or mathematical point of view.
And I set out the consequences of applying the formula. The Peruvian
Government began by speaking of applying it for 1 year, during the coming
12 months. I extended it as a formula. Like this, [Castro performs
mathematical calculations] Supposing it was at 6 percent, it would be a
little less than 1 million, or 857,000, I applied four variations. One
variation was that 10 percent was paid, and although exports exceeded 10
percent, no more than 10 percent was paid.

I optimized everything, estimating that the Latin American exports would
grow by 10 percent annually over a period of 20 years. Instead what is
happening is that they are dropping, not growing. Suppose not even a single
cent more of interest on the loans was imposed and that the Latin Americans
set a limit of payments at $10 billion annually on their total debt: at the
end of 20 years they would have paid $200 billion. That $200 billion is not
an insignificant amount. That amount in convertible currency well invested
in economic development could be equal to $600 billion in investment. I
believe that is a good start for development, not an insignificant amount.
At the end of 20 years -- the comrades operating the computers made a
mistake because the first response they gave was $2 million and many more
millions -- the real figure is $1.8 quintillion, after 20 years based on
current interest rate and a 10-percent growth rate annually, something
which is impossible. Using the other formula providing for the payment of
10 percent of all exports and a growth rate of 10 percent annually, if the
interest rates remained at today's levels, at the end of 20 years a large
amount of money would have been paid -- I have the figures here -- and the
debt would remain at about $1 trillion.

Using that same formula providing for the payment of 10 percent of all
exports and a growth rate at 10 percent annually, in addition to no new
loans being made during those 20 years, almost $500 billion would be paid
in 20 years, and the debt would still be $100 billion bigger than it is
today, nearly $450 billion. From the mathematic point of view, applying
the 10 percent formula will not solve the problem.

I said that the idea of solving the problem with the payment of 10 percent
[of exports] had not been fully explained. There is not a single word in it
about the interest, not a single word on accumulated moneys and the
interest on them, not a single word on the total figure to be paid at the
end of 10 or 20 years and what will be done with those amounts of money.
That is, this is a statement that we will pay with the 10 percent, but
there is no analysis.

When I was reviewing all these problems i made many analyses, several
formulas, and variants. That is why, by analyzing the various problems. I
reached the conclusion that the debt was unpayable. I also said that
proposing the 10-percent formula was a step forward, compared to what is
going on now. It was a challenge to the banking industry, to standards, to
all established international norms. In that sense, it was positive, that
is, with respect to what is being done now. But I insisted and continue to
insist today that it does not solve the problem.

I analyzed it only from the economic and mathematical point of view. That
is what the consequences would be -- 10 percent payment without saying if
the interest payments stop, that no interest on the debt is paid.

When there is a possibility of paying the debt, that some day it will be
settled if no interest is paid. What is going to be done with all the
accumulated moneys, if interest rates are the normal amounts, or 8 or 6
percent? what is going to be done with that money in the end? The
conclusion after 20 years is that the debt has to be abolished. After 20
years with that formula, the debt amounts to five times more than what is
owed today, and in the end the same conclusion will have to be reached,
that the debt has to be erased, abolished; that is with the 10 percent
formula.

I said I analyzed from two angles because one seeks a formula. As was said,
the banking industry will say that they need to be paid something instead
of nothing and still have the hope of demanding payment in the future the
entire debt. The debt is a tax, a great tax, and requires a surgical
procedure. When there is a surgical procedure, all the malignant cells have
to be removed to avoid a recurrence. As you know, if this is not done
cancer will recur. If you are going to perform a major surgical procedure
with general anesthesia, with all the risks this implies, it is better to
remove the entire cancer. For the international banking industry and
creditor countries to accept this, it is necessary to perform a major
surgical procedure. And if the banking industry and creditor countries
accept this, then I go ahead and remove the entire cancer, I do not leave
behind a single malignant cell. Otherwise, it would be fighting a great
battle without resolving the problem.

There are other factors. This is a force majeure reason, not being able to
pay. In law, there is force majeure. For example, if you sell a house by
contract...If I sell a house or this table to Arteche [not further
identified] and the table burns down, he could say find me another one. Let
us have another example; if we sell him this Palace of Conventions and it
burns down, we cannot fulfill the contract and deliver the Palace of
Conventions. That is force majeure. As Lopez Michelsen said here during the
Havana conference, this is a clause of impossible fulfillment.

I believe that the nonpayment argument is strengthened by moral reasons,
very powerful historic reasons. That is the reality. They make the
nonpayment argument stronger. If you have to defend a cause, you have to
support it with strong and profound arguments. We have said that paying the
debt is a political impossibility, and when we say that we are thinking of
what happened in Santo Domingo, what happened in Guatemala, what happened
in Panama, what is going on right now in Bolivia. I was reading a news
dispatch -- I am sorry to say it was disrespectful to stop listening to the
speaker for at least a minute because it was a dispatch on Bolivia -- which
mentions that strong criticism on the part of the Catholic Church, the
workers' organization, and parliament's interpellation of the economic
policy of a nonliberal nature have left the government of Victor Paz in a
very difficult situation, La Paz observers have indicated.

In less than 45 days, this explains that the situation is very difficult.
The country has been at a standstill for 15 days. These formulas had not
been able to be applied anywhere without causing political and social
crisis and terrible tensions. Of course, I am not judging here the Bolivian
Government policies but I am analyzing the events, reading the news of what
is happening everywhere.

Guatemala has an oppressive, strong regime, very repressive and bloody. One
hundred thousand people have been killed in the country. And there are, I
do not know how many, tens of thousands of missing people. I want you to
know that there are no political prisoners in Guatemala, that category does
not exist, and it has not existed. They are all dead or missing. All the
opposition fell on the hands of that regime, 100,000.

Well, they could not apply these neoliberal, and IMF measures. The
students, the people demonstrated. They had to reduce bus fare prices. If
these measures cannot even be applied in Guatemala, it is impossible that a
civil government, a government which has reached power though
constitutional means, a democratic government, cannot apply those measures.
This is an analysis from the political standpoint. I consider the analysis
from the historical and moral point of view very important. From a
historical standpoint, our countries are really creditors and not debtors.
That is the great historical truth. It is undeniable.

Who has compensated Africa for the tens of millions which were taken away
from them and its people turned into slaves? For them and their descendants
to work all their lives and create the wealth with which Europe and the
United States developed? Who has compensated them?

During the continental dialogue, a Haitian leader said something
incredible. That the French regime, the old mother country, charged the
Haitian slaves a fee. They paid a fee to the enslaver for tens of years.
Thus, the slaves had to pay a fee to the enslavers and to the mother
country. That's incredible, I did not know that. It is amazing. So, we know
this hemisphere's history. The conquest, the discovery. The millions, and
tens of millions who died during the first years. In Mexico alone, 4
million died during the first 30 years. The same happened in Peru and
everywhere. In Cuba, they almost wiped out the indians while they forced
them to look for gold nuggets along the river banks. That is the real
story. Here the indian population was practically wiped out. In our country
there are very few indians, some were left in some isolated areas of the
country. Because they were wiped out by having them work in gold mines,
looking for gold. Our country's history documents all the fleets which
passed by with gold cargoes. With the gold extracted from the mines. Gold,
silver, emeralds, extracted with the work of our slave indians and
mixed-race people. For centuries centuries ago, we began to finance
development of the industrialized world. We continued to finance it after
the so-called independence. And we have been financing it during this
century, we are financing it now.

So historically, our countries were colonies. We were forced to be
backwards, underdeveloped. Colonialism, neocolonialism, and imperialism are
the responsible ones for our underdevelopment and our poverty. They are
the historic debtors. What kind of compensation have they given us? Do you
remember what happened during the World War II, the genocide against the
Jewish people? They were killed. Millions were killed in gas chambers.
However, today the FRG is paying Israel for the crimes they committed
against the Jews. Now, I ask myself, what kind of indemnity has Europe and
the United States paid to Africa for the slaves? And the millions of men
and women who died? What kind of indemnity has this hemisphere paid for the
tens, hundred of million of men and women who died performing slave or
semi-slave work in mines, looking for gold. An indemnity to our countries
has never been mentioned by the industrialized world to compensate for what
they exploited from us, for how they mistreated us. Not even a cent. And
they want us to pay them $360 billion, and $400 billion. I even figured it
out. It would take 13 centuries, not 13 centuries, 130 centuries, almost
13,000 years counting a dollar per second, as I explained, what we have to
pay in 10 years.

There are some countries like Costa Rica who owe $100,000 per square
kilometer. I figured out that in a hungry continent with 390 million
people, that with $400 billion, with what we have to pay in interest in 10
years, which is the amount demanded from us, 3,500 calories and 135 grams
of protein per capita can be provided daily over a period of 17 years to
all the people of Latin America with the present wheat prices. I do not
know if it has decreased.

That is what they are asking us, just for debt interest. Those who looted
us, oppressed us, exploited us and developed themselves with our sweat and
blood. I believe that is a very strong reasoning.

From the moral standpoint, what happened with the money has been analyzed.
Everyone knows what happened. Some small amounts were used for
infrastructure projects, some investments, some trade balance problems. But
everyone knows that between $350 billion and $200 billion have left Latin
America. That money which was lended fled the countries. Many times it did
not even arrive to the countries, it did not arrive, it stayed away. That
money did not benefit the countries. Another portion of the money was
wasted, another portion was used for weapons, for wars, to repress the
people.

How did Pinochet spend 23 billion? He opened the tariff barriers. He
imported goods because of course, the country did not produce them because
the industry was closed as a result of the competition of South Korea,
Taiwan, Japan, etc. Open the tariff barriers as the Chicago School says.
Find money to import what it can produce. Maintain the military regime,
which was supported by imperialism for political reasons, and also received
credits because of imperialism's political reasons. This was given to an
illegal government which resulted from the coup d'etat which ousted a
regime of the people, an elected democratic government, an attempt to build
socialism which was seen with good eyes by the entire world, which was
responsible for the death of such an outstanding man as Salvador Allende.
They have loaned $23 billion to an illegal government.

Then they ask the Chilean people to pay the $23 billion when the democratic
opening appears; a government in Argentina where 10,000, 15,000 people
disappear. No one knows how many people have disappeared. Conservatively,
at least 10,000 people have disappeared. Some say 30,000 disappearances.
They construct monumental projects, large stadiums, large buildings. They
loot the public treasury, rob it. They enrich themselves. They open the
tariff barriers, sell the country, liquidate the country. That money was
loaned irresponsibly to that country. Then come the people beginning the
democratic process, and they are required to pay to the last penny. That is
not moral. The same is applicable to the rest of the countries everywhere,
El Salvador, and Guatemala.

Somoza's money, the money he seized from the Nicaraguan people for so long
now, has to be paid. That is the situation. It is money that has been
squandered, stolen, spent on arms, or saved to be used for repression.
Furthermore that money was loaned to a de facto government, an illegal
government. The cases are similar in that the constitutional government has
to confront those debts, the parliaments, the representatives, the
sovereign peoples. They were ministers, they were officials, many times
they were private businessmen who mortgaged and sold the country. Based on
what constitutional precept, on what judicial precept, did they get the
idea that isolated individuals could mortgage and sell their countries?

These are very strong, solid reasons. The liberation theologians and the
Christians who have participated in all the meetings have stressed strongly
the moral aspect of the question. If you say: I will pay; you make the debt
legitimate, you say the debt is just, that it should be paid. You then
ignore all the historic reasons. You say it is legal, that it is
legitimate, that you will simply give 10 percent because you cannot pay 100
percent. It is simply a reason out of sheer force, and I take force away
from it.

I think the masses understand this argument much better. They say it is not
radical. I have gotten tired of telling you here that I have not stopped
being revolutionary and that it is my formula that appears reformist,
moderate, or whatever. I have just confessed to the comrade that i
deliberately did not emphasize, so as not to renew the demand, the
nationalization of the debt. One could say that I am making radical or
super-radical statements, and this position is firmly sustained. I have
clarified and explained the conclusions to those who have asked me for an
explanation. That is to say it is not a radical form when the enemies
themselves begin to admit that the formula we are proposing is possible. It
is supported by a strong argument. It is based on an overall conception. It
is associated with peace because we ask for the debt to be cancelled, and
that would be compensated by a reduction in military spending. A part of
the war costs should be dedicated to that. It is associated with peace. It
is associated with the struggle for peace. It is associated with the new
international economic order. It is associated with the idea of
integration.

I believe the strength that we derive from this struggle or this
well-planted banner helps us to liberate other battles. Then how do we end
up? We end up being dependent all our lives. With 10 percent, a large
amount of debts would be accumulated after 10, 20, 30 years, since it grows
continuously. We would be paying the 10 percent for a thousand years. When
we export $500 billion, and we expect to export $200, $300, or $500 billion
in the next 40 years, then we would be paying annually 10 percent of $500
billion, or $50 billion a year. Latin America would be paying that fortune
all its life, eternally. There would be no new order, no integration. There
would be nothing. They are proposing a struggle for all those reasons. Each
one of the positions in this combat supports the others. Each of the
arguments support the other -- the arguments of economic and material
impossibility, political impossibility, and the moral argument. What I have
been proposing then is a conception, analyzing all the variants, the
possibilities, the possible forms to draw a conclusion in conjunction with
my point of view. I do not want to argue with anyone, much less antagonize
anyone because what would I gain? It would be ridiculous for you to argue
with me. I do not want to antagonize anyone.

The Peruvian comrade is very correct when he says that I am trying to
present something more than two different formulas. The two formulas are
not the same, even though they are well paired. They were born of the same
crisis. From my point of view it was a step forward, as I previously said.
It is perhaps the first result of this battle. It is perhaps the first
result of this battle. [repeats himself] I have to treat with respect
anyone who thinks differently, with absolute respect. There will be many
who think differently. One will think one way; another will think another
way to devise a formula resulting in a long struggle. In addition, I have
profound motivations on this, as I explained to you yesterday.

Imperialism is trying to present a dispute now between Peru and Cuba, not
between the positions. They talk about leadership rivalries. They are
trying to create division and disunion. I believe there can be union,
support, and solidarity. You can be assured of the following. I will
explain. We have no responsibility in the campaign waged by the
international press, because I have not said even one hostile word against
the Peruvian Government, a single disrespectful word, or even any
unfriendly words against the Peruvian Government. They know this. The
Apristas know that we express our good intentions knowing their economic
problems. We inform them of everything, the struggle we are having. We
informed them and expressed our intentions of supporting Peru in its
struggle to resolve the debt problem before the new 10-percent formula was
suggested. I have not pronounced even one unfriendly word. I am not
responsible at all for what imperialism is trying to create, a type of
rivalry.

The same is true for Peru. The president-elect on 19 July -- and it was not
just an impulsive remark, an emotional remark -- made a premeditated, cold
statement which he had mentioned to several people.

He made a hostile statement against Cuba, against our country. It was
really very painful for us and absolutely unnecessary. It had not been
provoked by us in any way. We were practically excluded. It was said this
was not an East-West problem but a North-South problem. It was charged that
our struggle was an East-West issue, which I believe it is, absolutely.
Immediately, they said Cuba had nothing to do with the Latin American
world and did not have to speak about this. This is terribly unfair. We are
practically excluded from Latin America in that statement. They were harsh,
but we did not make any comment. We reacted calmly, because we know any
debate or dispute of this kind, any attack or counterattack, will be used
by imperialism. So the direction I have followed -- which I believe is the
most peaceful, level-headed, and responsible -- is not to make any kind of
offensive statement against Peru's new Government. This has been our stand,
and it may be verified in all documents, every international press release.
I have been noticing for days that they want to show that there is a
dispute, but there is none of that from our side.

It is terribly unfair to say that we want to create an East-West issue with
this foreign debt problem. We have been struggling for many years. As I
explained yesterday, I spoke about the foreign debt problem for the first
time 14 years ago in Chile, in 1971, at the Economic Commission for Latin
America, and I kept mentioning it in every international event, in 1979, in
1983. It is not new. It isn't something we made up, that we came up with at
the last minute. It is a problem we have been mentioning for many years. We
have been consistent with our remarks. So why question that right after we
have been deprived of everything? After we were expelled from the OAS,
relations were broken with Cuba; we were isolated for so long. The sugar
quota which had been established for over 100 years was distributed at the
expense of Cuba. Even the Alliance for Progress, if there was any small
benefit from it, was thanks to Cuba. Now this problem is on the table in
part because of Cuba's effort, the length of time it has been bringing it
up, and the reasoning it uses to explain it.

We are not responsible if the enemy is trying to take advantage of this
matter, because I believe we have not given any reasons for it. We can
discuss any thesis respectfully, among all, as we are doing here. We can
discuss any thesis, any theory, any point of view without having to be
rivals, without having problems or conflicts, or being disrespectful. We
will continue to avoid being unnecessarily disrespectful to any government,
and we are not going to cooperate with imperialism. And you can be sure
that we follow a policy of principles. If Peru, despite this background I
have outlined to you, despite there being different kinds of opinions,
despite there being an immoral attack on the Cuban revolution in the last
few days, despite all this, if Peru is a victim of the least kind of
aggression, the least kind of boycott, pressure, economic boycott, as a
result of that position of paying 10 percent [of its exports], you can be
sure the first country who will give Peru all its support, all its
solidarity, and will struggle in all fields of defense of the Peruvian
people, in defense of Peru's sovereignty, and in defense of the interests
of the Peruvian people will be Cuba. There is no doubt about that.
[applause]

-END-