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Friday, April 08, 2005Our web site is www.OdiousDebts.org
Forgive to forget by Lisa Peryman, Odious Debts Online, April 8, 2005 On the eve of the first Pan African Forum on accountability and good governance in Kenya this week, an editorial published by the Nairobi-based newspaper, The Nation, called for the relief of Kenya's foreign debt based in part on an odious debts argument. [Full text appears below] Pan African Forum: African governance and accountability in the spotlight by Odious Debts Online, April 8, 2005 The first Pan African Forum on accountability and good governance was held in Kenya this week to look at decreasing international corruption and strengthening judicial independence. Co-hosted by the UK-based Commonwealth Secretariat, the central body of the Commonwealth of Nations comprised of 54 member governments, the three-day conference, which ended on Wednesday, also addressed the poor relationship between the Kenyan Judiciary and its Executive. A relationship aired in public when Kenya's Chief Justice, Evan Gicheru, who closed the conference, began his address by complaining that the Judiciary was not even consulted over the forum, The Nation reports. "I wish to register at the outset, my personal regret that the Kenyan Judiciary was not adequately consulted and involved in the preparation of this forum," Mr. Justice Gicheru is alleged to have said to the amazement of the delegates at the Hotel Inter-Continental in Nairobi, in the presence of Justice Minister, Kiraitu Murungi, whose ministry handled the preparations. Mr. Gicheru said had the Judiciary been consulted, its contribution by way of planning and presentation would have been of greater impact, The Nation reports. According to Kenya's President Mwai Kibaki, one of the "greatest problems" African countries have faced is the lack of a clear separation of powers between the three arms of government, the Executive, Legislature and Judiciary. "This is one of the core sources of poor governance, corruption, and political instability in various nations. In Africa, especially during the past decade, over-concentration of power in the executive seriously undermined the operations of the other organs of government," he said. In recent months, corruption in Kenya has come under renewed scrutiny and attack by the international lending community which has warned President Kibaki his government must prove it is acting on graft allegations or risk jeopardizing international assistance it can ill-afford to lose. A prolonged economic stagnation has taken its toll, increasing the number of Kenyans living under the poverty line to more than 15 million or 56 per cent of the population. The Nation reports a communique issued at the end of the forum on Wednesday, called on the Commonwealth Secretariat to help enact new laws to curb "the looting of wealth" and a code of conduct for MPs in commonwealth member-states. The communique recommended legislation to prevent and punish corruption must also include the recovery of embezzled funds; penal codes that ensured officials would be held to account for possessing wealth and income from unknown sources; financial disclosure laws and codes of conduct to deter officials from amassing wealth through illicit means. In the case of Kenya, the new directives may help to reassure the international donor community, provided President Kibaki's government acts fast to implement reforms. http://allafrica.com/stories/200504070155.html Drop the debt by Ethan Burke, The Massachusetts Daily Collegian, April 8, 2005 A commentary arguing for debt cancellation published today examines relief based on the principles of the international legal Doctrine of Odious Debts. Writes Ethan Burke for the Massachusetts Daily Collegian: In many cases, "those who must bear the debt burden did not receive loans. Funds from loans were mostly sent right back to G7 countries by purchasing military equipment, importing foreign goods and contracting multinationals for large development projects. The beneficiaries are big corporations, a tiny collaborating class within the developing country, and corrupt leaders who often become fabulously rich. The rest of the population must foot the bill in a system where wealth and profits are privatized and costs are socialized." Burke contends that the wealthy nations that dominate international financial institutions encouraged lending to regimes that included Saddam Hussein's in Iraq and General Suharto's in Indonesia, as well as the apartheid-era government in South Africa, "knowing funds would be spent on palaces, private jets, torture and repression." The situation would be funny if it weren't so grotesque, says Burke. "People must now pay for their own oppression, with interest." www.odiousdebts.org/odiousdebts/index.cfm?DSP=content&ContentID=12805 KAIROS analysis of debt recommendations in Commission for Africa Report by KAIROS, April 2005 A recommendation calling for 100 per cent cancellation of sub-Saharan Africa's multilateral debt by British Prime Minister Tony Blair's Commission for Africa last month, would only provide some additional debt service relief until 2015 while reinforcing International Monetary Fund and World Bank conditionality for African countries, claim social justice advocates. In their analysis of the Commission's final report on Africa, KAIROS – a social justice organization of 11 Canadian churches and church agencies – says the possible actions described in Annex 9 of the Commission's report "are closer to the actual proposals" being debated by the Group of Seven industrialized nations. Although, the Commission's general call for "100 per cent debt cancellation as soon as possible" has been widely cited by NGOs as a "positive breakthrough," it only would be "if it were ever implemented," said KAIROS. "However, there is no timeline attached to the 'as soon as possible' and there are no details concerning which countries might have debts cancelled, which kinds of debt would be covered and how it could be achieved," they said. The KAIROS report also looks at the Commission's second and third recommendations. It found that the Commission backed away from the universal promise of its first recommendation of 100 per cent relief because it only applied to "low-income countries" and "up to 100 per cent" debt cancellation, where it is necessary to achieve the MDGs (Millennium Development Goals)." A third recommendation that would put in place financing to provide 100 per cent multilateral debt service cancellation builds on "proposals already on the table at the G7 Finance Ministers' meetings." "It would apply only to 'multilateral debt service'; only be available to countries needing more debt relief to achieve MDGs and only last until 2015 'to avoid the risk of new loans being taken with the expectation that they subsequently will be written off.'" It is only the discussion of "Possible Actions for Further Debt Relief" contained in Annex 9 of the Commission's report that provides a "clearer picture" of what is being put on the table, said KAIROS. "It is important to note that far from freeing these countries from IMF and World Bank conditionality, these proposals would reinforce it by dangling the carrot of having some debt service payments paid or rebated if the countries adhere to IFI conditionality long enough to meet all the requirements" of the Heavily Indebted Poor Countries initiative (HIPC). Although the Commission report refers to "strong resentment in many parts of Africa over . . . debt obligations . . . incurred by unelected leaders supported by the very countries [now collecting debt] service," and acknowledges that many Africans feel these countries "are now using debt as a lever to dictate policy to the continent," it does not address the illegitimate origin of the debts. "There is no discussion of how many debts were illegitimate from the very beginning. Nor is there a discussion of writing off 'odious debts' even in the discussion of stolen assets (section 4.5.3), where it is acknowledged that these stolen assets are equivalent to half the continent's external debts. Nor is there any mention of apartheid debts," KAIROS noted. www.odiousdebts.org/odiousdebts/publications/Kairosanalysis.pdf News Release: 4 arrested at Senator Durbin's Chicago office by Voices in the Wilderness, Common Dreams, April 6, 2005 On Tuesday, April 5, four anti-war activists were arrested at the Chicago office of Senator Richard Durbin after they delivered a letter urging the United States to withdraw from Iraq and to cancel "odious debts" incurred by Saddam Hussein. After entering Sen. Durbin's office, the activists delivered a letter urging the senator to vote against a Senate Appropriations Committee Supplemental Spending Bill that would provide more than $80 billion in funds to the war in Iraq. The activists are all members of Voices in the Wilderness – a group formed in 1996 which identifies itself as "nonviolent war resisters" campaigning "to end economic and military warfare against the Iraqi people." "Our country has waged economic and military warfare against the people of Iraq for the past 15 years," the letter said. "It is time for this war to end. It is time to withdraw U.S. troops from Iraq; to cancel the 'odious debt' incurred by Saddam Hussein; to pay reparations to Iraqis injured by the U.S. war against Iraqi people; and to fully fund the reconstruction of Iraq as Iraqis exercise self-determination and rebuild their country in a manner which benefits the ordinary Iraqi and not the interests of the U.S., the World Bank, the IMF or other international forces." Soon after Sen. Durbin – who holds the Senate's second highest ranking Democratic leadership post and is also known as the Democratic Whip – confirmed he intended to vote for the bill, the activists were detained by federal police and charged with creating a disturbance and failing to conform with directions. The Senate Supplementary Spending Bill was passed unanimously on Wednesday. According to the Washington Post, the $80.4 billion bill is $1 billion less than the version passed by the House of Representatives three weeks ago, and $1.5 billion less than what President George W. Bush had initially requested. "It trims the foreign-affairs appropriations by $1.4 billion from what Mr. Bush requested, cutting aid he sought as a reward for nations that have contributed armed forces to the war on terror," the Post said. http://washingtontimes.com/national/20050406-114043-4473r.htm Forgive to forget by Lisa Peryman, Odious Debts Online, April 8, 2005 On the eve of the first Pan African Forum on accountability and good governance in Kenya this week, an editorial published by the Nairobi-based newspaper, The Nation, called for the relief of Kenya's foreign debt based in part on an odious debts argument. The editorial follows a debate on debt repudiation for Nigeria sparked by the Nigerian Parliament's passage of a non-binding resolution last month to halt payments on the country's $35 billion external debt. The Nation editorial, "Why Kenya Deserves Debt Relief," draws inspiration from an opinion piece published by the UK's The Economist, which outlined three reasons Nigeria should be granted debt relief. Reason No. 1, the Economist argued, "is that much of Nigeria's debt is 'odious'; that is, it was accrued under military dictators. Since Nigerians did not choose these regimes, it seems unfair that they should have to repay the loans that foreigners were foolish enough to make to them." "Why Kenya Deserves Debt Relief" develops a similar argument and claims Kenya's debt should be waived because it too is odious, or "debt accrued under a dictatorship." "Should it not matter that [the debt] was incurred under a leadership notorious for corruption and embezzlement – something our lenders were fully aware of when they extended us such credit?" wrote The Nation, adding: "There are as many fingers as there is blame to go around on this one, further stressing that our ongoing debt problems are not of our making alone and that somewhere along the line, these loans have more enhanced than alleviated poverty. "Just look at us!" the editorial blazed, "Rather than trust accounts, our children inherit debt. Instead of being children, they are saddled with adulthood, fetching firewood instead of doing homework and heading households when they should be schooling. "We spend millions – multiples of healthcare costs servicing debts while our sick languish at home with bare cupboards, dirty drinking water and no medicine. And yet, we are the norm – an example of others slowly dying under debt incurred by governments, largely squandered by officials and then paid for by the masses – the same individuals not consulted or allowed to benefit from such undertakings." Corrupt, oppressive regimes acting against public interest and unaccountable lenders who, in numerous cases, knew their funds were not being used for legitimate purposes, are two of the main reasons debt has become the burden it has for many nations in Africa. Despite a heightened global focus on debt reduction and poverty alleviation in Africa, the issue of odious debt is one unlikely to be taken up by donors, although debt cancellation is a strong possibility. Writing off or rescheduling debts provides lending nations with an out for dealing with tainted loans that should never have been granted. Such was the case last November when the Paris Club cartel of creditors opted to write off 80 percent of the $120-billion debt Iraq owed it. The move deliberately circumvented the threat posed by a potential public review of debts accumulated under dictator Saddam Hussein; it also denied Iraqi citizens the opportunity to assess which loans granted were used for their benefit and which to prop up Saddam's corrupt regime. Conveniently, the cancellation of debt makes that examination appear less compelling, particularly when cloaked in the rhetoric of benign forgiveness. Patricia Adams, the executive director of the Canadian-based foreign aid watchdog Probe International, at the time suggested Paris Club members had rushed through their debt forgiveness program, prior to the establishment of a democratic Iraqi government, in order to head off an Iraqi investigation of who lent Saddam money and for what purposes. However, she noted, this tactic failed. The Interim Iraqi National Assembly responded by tabling a recommendation to declare the debts owed were "odious." It further stated: "This National Assembly has a responsibility to the Iraqi people to protect their current and future interests. . . . These interests are threatened by the Paris Club cartel of creditors which refuses to accept that any of the debts are illegitimate, and is attempting to get Iraq to sign, before the end of the year, an agreement to repay a significant portion of the odious debt. There is a strong basis in international legal principle and precedent to define these debts as being 'odious' and thus not legally enforceable." A team of Iraqi and international lawyers and arbitrators, in conjunction with Probe International and other debt NGOs, are currently working on the creation of an arbitral model which could be used to determine which of Iraq's state loans under Saddam were used for corrupt purposes. Currently, debt forgiveness of clearly odious debt, extended as an act of charity, works to conceal the complicity of western donors in the misuse of public funds by despotic rulers. While citizens are expected to be grateful for the writing off of debt they should not be on the hook to repay in the first place, lenders and the corrupt governments their loans financed get off scot free. Perhaps African countries should raise a hue and cry about odious debt between now and the next meeting of the Group of Eight wealthy nations in Gleneagles, Scotland, this summer, where Africa will be a main focus of discussion. Given the lending community's strong dislike of the subject, who knows how much debt it may be prepared to "forgive" to contain the threat of an odious debts challenge. However, the issue of accountability would not be resolved by forgiveness. The beauty of a successful odious debts challenge is that while it absolves citizens of having to pay for the crimes of their leaders, the debt remains outstanding: creditors can still chase payment from the dictator or regime they loaned to but the amount will no longer appear as a national debt. Unchallenged, lenders treat all loans as legitimate and enforceable and decide among themselves which loans will be written off and which rescheduled. Under this system, the people will always be held to account for unrepresentative governments and their odious debts. Odious Debts Online News Service: Odious Debts Online covers the latest odious debts challenges around the world. It also provides updates on important developments in the field of scholarly research and advances in the legal precedents underpinning the Doctrine of Odious Debts. Odious Debts Online is produced by Probe International, a non-profit organization based in Toronto, Canada. Probe International's book, Odious Debts: Loose Lending, Corruption, and the Third World's Environmental Legacy by Patricia Adams (Earthscan UK), popularized the odious debts concept after its publication in 1991. Probe International maintains a rapidly expanding Internet resource and electronic library on odious debts at www.odiousdebts.org. All stories written by Odious Debts Online staff may be reproduced freely, although we ask that you credit Odious Debts Online and provide a link to www.odiousdebts.org.Keep us informed. Odious Debts Online welcomes submissions. Publisher: Patricia Adams Yes! Sign me up to receive Odious Debts Online! To contact the editors, please e-mail: |
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