An independent United Nations expert today stressed the need for creditor and debtor nations to work closely and openly to promote responsible financing and ensure the fair and transparent management of foreign debt.
“In order to adequately and fairly address the current debt situation in low- and middle-income developing countries, the shared responsibility of debtors and creditors and the obligation of international cooperation must be fully acknowledged,” stated Cephas Lumina, the UN Human Rights Council’s Independent Expert on foreign debt and human rights.
He noted that the link between debt and human rights is clear. “Excessive debt burdens impede progress towards the achievement of the Millennium Development Goals [MDGs] and pose a significant challenge to the realization of human rights by undermining the human rights obligations of States,” he stated.
“Rigorous, transparent and participatory debt audits which examine the impact of debt on the full enjoyment of human rights can be an important step in this process,” he added.
Mr. Lumina recently visited Norway and Ecuador (28 April to 8 May) to draw lessons from their experiences in tackling the issue that may be beneficial for other countries, including the process of conducting a national debt audit, which Ecuador completed last year.
According to a news release issued today, Mr. Lumina found wide support, both in Ecuador and Norway, for a fair and transparent debt arbitration mechanism, under UN auspices, to address foreign debt.
“Such a mechanism would need to be guided by the principles of inclusivity and equity, in which the interests of both creditors and debtors would be respected,” the release noted.
In addition, the absence of an internationally accepted definition of illegitimate debt was cited by both government and civil society as an obstacle in the efforts to systematically address the debt issue on a global level, it added.
Mr. Lumina welcomed initiatives to elaborate the concept of illegitimate debt and encouraged debtor and creditor countries to re-assess the impact of their financing decisions on the ability of debtor countries, especially the poorest, to achieve their development objectives and to design national policies that would enhance their capacity to fulfil their human rights obligations.
“I also encourage debtor and creditor countries alike to support rigorous, transparent and independent examinations of national debt portfolios to assess the impact of debt on countries’ ability to fulfil their human rights obligations,” he stated, adding that such efforts should be undertaken while keeping in mind the importance of the broader context of responsible financing.
Mr. Lumina, who works in an independent and unpaid capacity, will submit a full report on his visits to the Geneva-based Human Rights Council in June 2010.