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Resolving International Debt Crises Fairly

Published online by Cambridge University Press:  28 September 2012

Ann Pettifor
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Extract

If global economic justice is to be achieved, debt crises must be assessed within the broader context of the international financial system. This system, which has been largely imposed by a small group of powerful financial agents in the Organisation for Economic Co-operation and Development countries, has led to instability and recurrent financial crises that have severely harmed the interests of poor countries and their people. Responsibility for bearing the costs of debt crises and other negative effects of the prevailing international financial system should therefore be assumed by those who have contributed to bringing them about. At present, however, the burden of economic “adjustments” during debt crises has fallen disproportionately on poor debtor nations, and debates regarding debt management have been dominated by individual, corporate, and official creditors. This essay presents the case for institutional reforms that can better protect the human rights of citizens of sovereign debtor nations during debt crises.

Type
Articles
Information
Ethics & International Affairs , Volume 17 , Issue 2 , September 2003 , pp. 2 - 9
Copyright
Copyright © Carnegie Council for Ethics in International Affairs 2003

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References

1 Raffer, Kunibert “Applying Chapter 9 Insolvency to International Debts: An Economically Efficient Solution with a Human Face” World Development (1990) 18, no. 2301–13CrossRefGoogle Scholar. See also Professor Rafter's Web site, http://mailbox.univie.ac.at/~rafferk5/art.html.

2 Erlassjahr, “A Fair and Transparent Arbitration Process for Indebted Southern Countries”; available at http://www.erlassjahr.de/15_publikationen/15_dokumente/englisch/ftap_englisch_rz.pdf.

3 AFRODAD, “AFRODAD's Call for a Fair and Transparent Arbitration Court for Debt”; available at http://www.afrodad.org/HTML/Examination%200f%20FTA.htm.

4 Bank for International Settlements, “71st Annual Report: 1 April 2000–31 March 2001,” p. 123; available at http://www.bis.org/publ/ar2001e.pdf.

5 International Monetary Fund, “The Design of the Sovereign Debt Restructuring Mechanism—Further Considerations,” November 2002; available at http://www.imf.org/external/np/pdr/sdrm/2002/1127202.pdf.

6 Ibid., paras. 84, 85p.25Google Scholar.

7 Ibid., paras. 14, 273, and 2916–8, 70–74Google Scholar.

8 “Ibid., paras.” 28, 230–63, pp.11–12 57–67Google Scholar.

9 For evidence of the impact of these policies on economic growth in emerging markets, see Pettifor, AnnReal World Economic Outlook vol.1 (LondonPalgrave, forthcoming September 2003)Google Scholar.

10 See Mark Weisbrot, Robert Naiman, and Joyce Kim, “The Emperor Has No Growth: Declining Economic Growth Rates in the Era of Globalization” (Center for Economic and Policy Research Briefing Paper, May 2001); available at http://www.cepr.net/globalization/The_Emperor_Has_No_Growth.htm.

11 International Monetary Fund “The Design of the Sovereign Debt Restructuring Mechanism” n. 1735–36Google Scholar.

12 See Mann, Bruce H.Republic of Debtors: Bankruptcy in the Age of American Independence (CambridgeHarvard University Press, 2003)Google Scholar.