Source:
Latindadd
Fri Jul 25 2008
The event took place in Washington within the framework of the Spring Meetings, gathering 40 people involved in debt issues. The attendance included officials (World Bank, IMF and EU among others) and civil society representatives from North and South. Beyond the apparently non-controversial title the round-table dealt with the issues of odious debt and illegitimate debt. This certainly implies some progress, given the fact that, so far, such a discussion had not been accepted in this kind of spaces. Citizen debt movements have long been insisting on its importance and struggling to include it in the agenda. (The World Bank and Eurodad have recently published the outcome report)
The event took place in Washington within the framework of the Spring Meetings, gathering 40 people involved in debt issues. With regards to multilateral institutions, the event was attended by 1 IMF and 11 World Bank representatives. From regional official bodies, it was attended by 2 representatives of the European Union and 1 representative of the African Development Bank. On behalf of governments there was a representative of the Foreign Affairs Ministry of Norway and 1 of the United States. There were also representatives of the following Universities: Rutgers, Salamanca, Michigan, Essex and the Stanford Law School. The event also had the participation of the following civil society movements and organizations: Jubilee South, Eurodad, Latindadd, Afrodad, Jubilee USA, Jubilee Germany, Jubilee UK, the Haitian Platform for Alternative Development, Rede Brasil, the Southern African Regional Poverty Network, the Norwegian Church Aid, Philippines Jubilee South, the Church Development Service (Germany), the Platform 11.11.11 of Belgium and the Abrahams Kiewitz law firm of South Africa, among others.
Beyond the apparently non-controversial title – which was in fact the third issue addressed – the round-table dealt with the issues of odious debt and illegitimate debt. This certainly implies some progress, given the fact that, so far, such a discussion had not been accepted in this kind of spaces. Citizen debt movements have long been insisting on its importance and struggling to include it in the agenda.
We are not intending here to summarize the presentations nor the discussions thereon. Organizers have undertaken the commitment to draw up a full report. So, we will just be highlighting some points which are of particular relevance to us.
1) World Bank representatives tended to reiterate the items included in their controversial discussion paper on Odious Debt. That is, they stated that research “has not thrown much light” on the subject and has failed to reach “a general conclusion”. However, they expressed their concern regarding the operability of this concept and also expressed their agreement with the notion of “co-responsibility”. They insisted on the idea of ensuring transparent and responsible loans with a view to the future. They also expressed their reluctance when it comes to proposals on “regulatory” measures, thus supporting the free movement of capital and financial markets.
2) Civil society representatives belonging to organizations making up the global debt movement insisted on the different realities in terms of debt experiences, thus supporting the concept of odious debt and illegitimate debt. They said it is not enough to aim at future responsible loans, since the debt burden imposed on our nations is not just a thing of the past but also of the present, which compromises their future. They also pointed out that it is not enough to talk about responsible credits with a view to the future but rather that a new financial architecture is required in order to overcome asymmetries and include equitable rules as well as mechanisms to deal with illegitimate debt and audit processes.
3) Legal experts taking part in the event had complementary interventions. They criticized the narrow approach to the issue of odious debt expressed in the World Bank paper, which sticks to the 1927 theory of Alexander Sack, failing to take into account the evolution of international law since then. Thus, for instance, the Vienna Convention and particularly its article 53 referred to the nullity of contracts in breach of international law. Reference was made – in the line of the UNCTAD paper on odious debt – to the experiences of political transitions, criminal courts, truth commissions and compensations as issues that are related to this problem. Besides, they also pointed out – among other things – the need to have fair and transparent arbitration processes.
4) It is worth highlighting the important role played by the government of Norway throughout this process, by helping to put the issue on the agenda and contributing to its discussion. The Norwegian representative of the Foreign Affairs Ministry expressed an open position in the search for solution mechanisms within the framework of a hollistic approach, including the possibility of participation by International Courts.
5) Upon closing the event, civil society organizations proposed that debate should be furthered, identifying the critical components of the illegitimate debt (for example, conditionalities) and stated that they will continue to promote audit processes. They offered to co-operate with the World Bank in its external and independent audit, thus being granted access to Bank papers as part of the right to information inherent to a democratic governance. The Bank was also asked to specify mechanisms within the institution so as to deal with civil society concerns about its loan practices. For its part, the World Bank representative said that making promises or undertaking commitments was beyond his role. He added that the paper on Odious Debt and the discussion thereon is being carried out by a team within the Bank, although it does not represent an institutional position. He announced that by the end of the year the Bank will be promoting a Conference on Debt Relief in which it would be possible to resume dialogue. He reiterated the above-mentioned information regarding the fact that Eurodad would be drawing up a report on the Round-Table.
Latindadd distributed the paper “Illegitimacy of Debt: The Facts” and highlighted in its two interventions in debate some empirically verified and verifiable facts in our countries’ debt history and reality, which supports the validity of the concept of illegitimate debts as well as the importance of the creation of an International Financial Code, as part of a new architecture which should: incorporate Eurodad’s proposals within its Responsible Lending Charter; determine that agreements should be governed by an international financial law rather than by the laws of London or New York; establish regulations for the elimination of tax havens and vulture funds; and promote fair and transparent arbitration processes.
For the anecdotal part, a speaker who attended the event on behalf of the Paris Club excused himself for not being able to stay in the meeting and took the opportunity to say that “those who talk about the illegitimate debt, are out of focus”.
Related Information:
* Odious debt roundtable final report, by Eurodad and the World Bank (pdf format)
* World Bank hosts illegitimate debt roundtable, notes by Jubilee Debt Campaign
* Illegitimate debt: demanding justice beyond solidarity, paper by Observatorio de la Deuda en la Globalización and Campagna per la riforma Della Banca Mondiale
* World Bank paper on odious debt: Dismissive and limited, Eurodad’s response to the World Bank’s September 2007 discussion paper: "The concept of odious debt: some considerations"
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