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UNCTAD and the World Bank have both published long-awaited research papers on the issue of odious debt. Both papers have been financed in part by the Government of Norway. The publication of this work follows much confusion for CSOs working on this issue worldwide, because of the way that both institutions formaly carried out the research.

In relation to content, both papers begin by reviewing a number of instances over the past century where the concept of odious debt has been invoked to declare a sovereign debt null and void or to support the repudiation of sovereign debt.

According to Eurodad view, "the main message to emerge from the World Bank discussion paper is that international law does not generally provide for the repudiation of debts on the grounds of their being odious, but this should not deter lenders and sovereign borrowers from acting in a variety of ways to ensure that loans are used for the benefit of the borrowing states and not to subjugate their populations or enrich the corrupt."

"The UNCTAD paper is less dismissive of the doctrine of odious debt. Indeed it suggests that – although complex – there are often strong grounds to make the case that a debt is odious. Where such cases have been rejected, it is because the individual sovereign debt in question has not been considered odious rather than because international law does not recognise the concept of odious debt as such. The paper concludes however that there is no obvious legal forum for the adjudication or settlement of claims of odiousness but that such claims might appropriately be raised in bilateral or multilateral negotiations on debt relief, or they could be adjudicated in the context of arbitration or domestic litigation."

See Eurodad news on these papers for further information

-> UNCTAD paper: The concept of odious debt in public international law

-> World Bank paper: Odious debt: Some considerations

Related information:

-> Debt: The repudiation option, by Third World Network


-> Odious debt: Definition, application and context, by Ashfaq Khalfan at EURODAD Annual Conference 2006 (pdf format)

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