Figure 16: Key figures in the debt justice debate 5000
US$ billion per year
4000
$4,076bn
3000
2000
1000 $538bn
$735bn $400bn
0 Total public debt in developing countries
Total debt Estimated service paid dictator debt by developing countries
Debt cancellation required to meet basic needs
$121bn Debt cancellation delivered
$133.5bn Foreign aid
divert government spending needed to meet basic human development needs; and a comprehensive debt audit to establish ‘odious’ or ‘illegitimate’ debts.27 A slow shift in policy There are some signs of progress towards a fairer and more comprehensive system for debt cancellation. Several creditor governments have recently signalled a new interest in international sovereign debt work-out procedures and responsible lending guidelines, including Norway, Germany and the Netherlands.28 In October 2006, the Norwegian government broke new ground by becoming the first government to unilaterally cancel specific debt claims on the grounds that the loans in question represented “failed development policy”.29 Furthermore, UNCTAD announced a three year project on the issue of responsible lending and odious debt in March 2009. The initiative, financed by the Norwegian government, brings together representatives from the private sector, civil society, official bodies and governments that in 2011 presented a draft set of guidelines for what constitutes responsible lending and borrowing practices.30 The Group of 77 developing nations have also indicated strong support for an open, impartial and transparent debt tribunal at the UN Financing for Development Conference in 2008.31 After years of campaigning by civil society groups, a landmark law was passed by the UK government in April 2010 (made permanent in March 2011) to protect the poorest countries in the world from profiteering by vulture funds through UK courts, helping to ensure that public money given towards debt cancellation is not diverted to private investors.32 However, a legal loophole still exists in the UK law that allows vulture funds to exploit courts in the offshore tax haven Jersey and other UK Overseas Territories, and there remains a lack of global standards for responsible lending that could constrain such aggressive litigations.33
Cancel unjust debt
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