Call for a fair debt process

As creditor governments meet to discuss Iraq's debts, Jubilee Debt Campaign calls for a fair and transparent arbitration process to resolve debt crises.

The Paris Club describes itself as 'an informal group of creditor countries', and meets approximately monthly in Paris to discuss how to manage debts owed to them by countries facing repayment difficulties. Its informal structure has not prevented it becoming an extremely significant body in determining how poor countries' debts are treated - but has enabled it to operate with great secrecy, behind closed doors and without fair participation by debtor countries.

In November 2004, Iraq's debts will be on the agenda for the Paris Club meeting. A number of debt campaigns, including Jubilee Iraq, are organising a protest outside the meeting. Jubilee Debt Campaign has written to the UK representative on the Paris Club, calling for a fair and transparent process to deal with future debt crises.

JDC letter

'At its meeting on Wednesday 17 November the Paris Club of creditor countries will consider the debts owed by Iraq to its members. The case of Iraq's debts has thrown into a sharp relief the secretive and creditor-dominated process by which unpayable national debts are currently handled by the Paris Club. More widely it has also illustrated the injustice of requiring the peoples of poor countries to repay so-called 'odious ' debts, e.g. those contracted without proper accountability or used to fund gross human rights violations.

'Jubilee Debt Campaign believes that as a matter of general principle a new, more equitable process of independent arbitration between borrower and creditor should be instituted to resolve cases of national insolvency: a truly Fair and Transparent Arbitration Process (FTAP) - as advocated by leading thinkers and civil society organisations for many years - would enable all countries that face a debt crisis (including Iraq) to renegotiate their repayments on terms that protect expenditure on basic services such as health and education. Such a process would also serve to identify those loans that are odious, and prevent the dual injustice of forcing those who have suffered from such loans to foot the bill for their repayment, often at the expense of essential public expenditure.

'JDC argues that 100% of the unpayable debts of the world's poorest countries must be immediately written off, not least as an essential step towards eliminating poverty. However, rapid steps must also be taken to ensure that from now on a just and open procedure is in place, overseen by an impartial body, to resolve debt crises whistle preserving fundamental human rights. We therefore call upon the Paris Club not to require any debt repayments from Iraq until such a procedure is in place to deal fairly with its debts, together with those of all countries that effectively become insolvent and/or wish to declare that some of their debts are odious.'