Civil Society Key Recommendations
- Expanded debt cancellation
The Doha Conference should call for expanded debt cancellation for many more countries, to help them to achieve human development goals. The implementation of debt relief should ensure resources resulting from debt cancellation are utilized in accordance with shared responsibilities of lenders and borrowers on gender equality and women’s empowerment.
- Debt sustainability
The Monterrey Consensus commitment to “broaden . . . participation of developing countries . . . in international economic decision-making and norm-setting” also should apply in this area via the establishment of independent bodies to determine what level of debt is sustainable. Sustainability criteria should be based on the ability of countries to meet human development targets, de-emphasize export- and GDP-based indicators to privilege budget revenue ones, and be delinked from inflexible criteria such as the CPIAs. Both endogenous and exogenous shocks and the growing levels of domestic debt in middle income countries should be taken into account when making debt sustainability assessments.
- Overcoming donor dominance in the development discourse and in norm-setting
The Development Cooperation Forum (DCF) must be mandated to address development strategies, policies and financing of development cooperation, as well as promoting coherence between the activities of the various development partners. This forum should receive the necessary political, institutional and financial support to enable it to convene the relevant development actors, including the new official development assistance providers, for discussions on fundamental issues of development cooperation. Governments and civil society from the North and the South should be equally represented.
- End harmful conditionality
While mutual accountability and transparency are essential to any debt cancellation agreement, current conditionality goes well beyond these basic fiduciary standards into micro-management of the economies of impoverished countries. Access to debt relief should not be tied to economic policy conditions.
- Vulture funds
Governments should commit to concrete steps towards changing their laws, so as to prevent vulture funds and other commercial interests from compromising the benefits arising from debt relief, and give judicial and financial assistance to debt-distressed countries in case they are taken to court. The UN should actively co-operate with other agencies to develop and strengthen the necessary binding codes of conduct that could prevent vulture funds from engaging in aggressive litigation, and profiteering from debt relief processes.
- Cancelling Odious and Illegitimate debts
The evolution of the notion of odious and illegitimate debts, and the principle that they must be cancelled, must be recognized by the Doha Review.
- A responsible financing framework for lenders and borrowers
Responsible lending will only be achieved via the adoption of a binding legal framework that fairly allocates the burden of irresponsible borrowing on both creditors and debtors. It would take account of both the origin and impact of the debts, and give equal treatment to both debtors and creditors. Only a framework like this will change the incentives, and thereby the behaviour, of lenders. Such a framework could assume the form of impartial and transparent processes for resolving debt crises and disputes such as, for instance, debt arbitration. The Eurodad Charter on Responsible Financing, developed by Eurodad, provides a good basis for this.
Responsibility on the borrowing side of the process should also be emphasized through, inter alia, parliamentary oversight, and civil society participation in the process of contracting and monitoring the use of new loans.
- Addressing the linkages between Debt and trade
The Doha FFD Review should recognize these linkages and call for the design of measures that integrate them into debt-oriented solutions.
- Addressing the ecological debt
The tax and aid regimes should no longer neglect the effects of profligate consumption by industrialized nations. Polluters must bear financial liability for the impact of their actions and the international tax regime must recognize a levy tax on overconsumption of natural resources.