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The Third World's Odious Debt
The South makes compelling moral arguments to cancel its foreign debts. But, it also has an indisputable legal case because the overwhelming majority of those debts are odious in law.
"If a despotic power incurs a debt not for the needs or in the interest of the State, but to strengthen its despotic regime, to repress the population that fights against it, etc., this debt is odious for the population of all the State."
- Alexander Sack, 1927
In 1927, Alexander Sack the world's pre-eminent legal scholar on public debts, defined the Doctrine of Odious Debts, which remains the ultimate legal source on that subject. The Doctrine of Odious Debts, though now 70 years old, helps bring clarity to today's complicated Third World debt situation, and fairness to a tragedy in which innocent Southern citizens pay, and corrupt and negligent borrowers and lenders get away scot-free.

Canada

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Corruption of Foreign Public Officials Act

Canadian NGOs have been at the forefront of the global odious debts’ movement for more than a decade. In 1991, Toronto-based Probe International launched the debate over odious debts with the publication of Odious Debts: Loose Lending, Corruption, and the Third World's Environmental Legacy.

More recently the Canadian Ecumenical Jubilee Initiative (CEJI) has taken up the cause. In the spring of 2000, CEJI organized a policy forum on illegitimate debt. The forum, which involved consultations with representatives of Northern and Southern Jubilee organizations, helped to develop a unified definition of illegitimate debts, and facilitated discussion on global strategies for assessing and cancelling those debts. CEJI's report on that forum, Illegitimate Debt: definitions and strategies for repudiation and cancellation, is an excellent resource for odious debt campaigners throughout the world.

The Canadian government has also made a potentially important contribution with the adoption of the OECD Convention on Corruption and Bribery and the enactment of the Corruption of Foreign Public Officials Act which criminalizes the bribery of foreign officials. If enforced, the law may help to expose the role of western companies in the corrupt practices that add to the third world’s odious debt. However, Probe International’s Patricia Adams points out weaknesses in the Act and questions the Canadian government’s commitment to fulfilling its obligations under the Convention (see Patricia Adams’ National Post article).



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Export Credit Agencies | Multilateral Development Banks | The Doctrine of Odious Debts
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