RETROUVEZ-NOUS SUR

Comité pour l'abolition des dettes illégitimes

Odious debt

According to the doctrine, for a debt to be odious it must meet two conditions :
1) It must have been contracted against the interests of the Nation, or against the interests of the People, or against the interests of the State.
2) Creditors cannot prove they they were unaware of how the borrowed money would be used.

We must underline that according to the doctrine of odious debt Odious Debt According to the doctrine, for a debt to be odious it must meet two conditions :
1) It must have been contracted against the interests of the Nation, or against the interests of the People, or against the interests of the State.
2) Creditors cannot prove they they were unaware of how the borrowed money would be used.

We must underline that according to the doctrine of odious debt, the nature of the borrowing regime or government does not signify, since what matters is what the debt is used for. If a democratic government gets into debt against the interests of its population, the contracted debt can be called odious if it also meets the second condition. Consequently, contrary to a misleading version of the doctrine, odious debt is not only about dictatorial regimes.

(See Éric Toussaint, The Doctrine of Odious Debt : from Alexander Sack to the CADTM).

The father of the odious debt doctrine, Alexander Nahum Sack, clearly says that odious debts can be contracted by any regular government. Sack considers that a debt that is regularly incurred by a regular government can be branded as odious if the two above-mentioned conditions are met.
He adds, “once these two points are established, the burden of proof that the funds were used for the general or special needs of the State and were not of an odious character, would be upon the creditors.”

Sack defines a regular government as follows : “By a regular government is to be understood the supreme power that effectively exists within the limits of a given territory. Whether that government be monarchical (absolute or limited) or republican ; whether it functions by “the grace of God” or “the will of the people” ; whether it express “the will of the people” or not, of all the people or only of some ; whether it be legally established or not, etc., none of that is relevant to the problem we are concerned with.”

So clearly for Sack, all regular governments, whether despotic or democratic, in one guise or another, can incur odious debts. , the nature of the borrowing regime or government does not signify, since what matters is what the debt is used for. If a democratic government gets into debt against the interests of its population, the contracted debt can be called odious if it also meets the second condition. Consequently, contrary to a misleading version of the doctrine, odious debt is not only about dictatorial regimes.

(See Éric Toussaint, The Doctrine of Odious Debt : from Alexander Sack to the CADTM).

The father of the odious debt doctrine, Alexander Nahum Sack, clearly says that odious debts can be contracted by any regular government. Sack considers that a debt that is regularly incurred by a regular government can be branded as odious if the two above-mentioned conditions are met.
He adds, “once these two points are established, the burden of proof that the funds were used for the general or special needs of the State and were not of an odious character, would be upon the creditors.”

Sack defines a regular government as follows : “By a regular government is to be understood the supreme power that effectively exists within the limits of a given territory. Whether that government be monarchical (absolute or limited) or republican ; whether it functions by “the grace of God” or “the will of the people” ; whether it express “the will of the people” or not, of all the people or only of some ; whether it be legally established or not, etc., none of that is relevant to the problem we are concerned with.”

So clearly for Sack, all regular governments, whether despotic or democratic, in one guise or another, can incur odious debts.

From Lebanon to Sri Lanka through Latin America and Egypt: Public debt today and in the history of capitalism

26 February 2023 - by Eric Toussaint, Anis Germany

The present interview with Éric Toussaint aims at constructing a common position about debts and their payment. It also helps to understand the part played by debt and its mechanisms in the extraction of resources of the South by the North at an (...)
Declaration / Statement

Why the CADTM disputes the “Swapping public debt for climate action" proposal

14 December 2022 - by CADTM

It is essential to have a responsible debate and to demystify the “Swapping public debt for climate action” proposal, which is not new and was actually very popular in the 1990s, when members of the Paris Club used debt swaps to promote the (...)
When States Start with a “Clean Slate” and Repudiate Debts: Whose Turn Now?

12 December 2022 - by Eric Toussaint, Anaïs Carton

In this article, Anaïs Carton and Éric Toussaint demonstrate, using a number of examples, that there is no automatic continuity of obligations related to debt when one State or government succeeds another. In April 2023, the Vienna Convention (...)
Gendering the debt crisis: Feminists on Sri Lanka’s financial crisis

13 November 2022 - by Bhumika Muchhala, Kanchana N Ruwanpura, Smriti Rao

Backdrop Countless images of women carers flitted through April-July 2022 on Sri Lankan television screens, social media, and newspapers. Carers with young children, mothers with new-borns leaving them with equally young children while they (...)
The doctrine of Odious Debt in the context of Africa today

9 November 2022 - by Eric Toussaint

In this slide show presented in Dakar on 26 October 2022 at the 2nd Conference on Economic and Monetary Sovereignty of Africa, Eric Toussaint begins by recalling the definition of odious debt according to the doctrine developed by Alexander (...)
Austerity budget accelerates both South Africa’s “Arab Spring” and climate crimes

1 November 2022 - by Patrick Bond

Can activists in South Africa link campaigns against debt and climate, consistent with a broader international push that heralds a “Loss & Damage” showdown with the Western establishment in Sharm El-Sheikh, Egypt at the United Nations climate (...)
In South Africa, resistance rises to the World Bank’s climate-killing mega-projects

16 October 2022 - by Patrick Bond

The World Bank and International Monetary Fund Annual Meetings have witnessed protests in Washington and many other sites. Nearly 100 protesters from community, environment and youth groups joined Extinction Rebellion and the DebtForClimate.org (...)
Another look at the debt of Tunisia and Egypt in the 19^th century and the colonization of those countries by France and Britain

29 September 2022 - by Eric Toussaint

The book Sovereign Debt Diplomacies: Rethinking Sovereign Debt from Colonial Empires to Hegemony merits reading. The work was published by Oxford University Press in 2021. Pierre Pénet and Juan Flores Zendejas, the co-editors, have accomplished a (...)
Why the Elites in the Global South Favour Indebtedness, How Creditors Have Eroded National Sovereignty, and How States are Beginning to Fight Back

22 August 2022 - by Eric Toussaint

The book Sovereign Debt Diplomacies: Rethinking Sovereign Debt from Colonial Empires to Hegemony merits reading. The work was published by Oxford University Press in 2021. Pierre Pénet and Juan Flores Zendejas, who served as editors, have (...)
The challenges of the odious debt doctrine in Ukraine

3 April 2022 - by Mats Lucia Bayer

While the Russian invasion of Ukraine continues, the latter contains to languish in a deep debt trap. This has serious consequences for the Ukrainian working people, attacked continuously - socially, politically and economically. We reproduce (...)
A Book that brings odious debt back into the limelight

8 February 2022 - by Eric Toussaint

A significant error about the odious debt doctrine In one of the extracts quoted in Part 1 we could read that the authors claim that “[d]ebts are odious and should not be repaid when they were incurred by irregular regimes and for improper (...)
The economic response to the crisis benefits large companies

26 May 2021 - by Eric Toussaint, Roberto González Amador

Éric Toussaint is interviewed by Roberto González Amador from the Mexican daily La Jornada. The spokesperson for the international network Committee for the Abolition of Illegitimate Debts (CADTM) argues for an end to patents [1]. The seeds of a (...)
A country is entitled to refuse to repay a debt

26 November 2020 - by Eric Toussaint, Revista Mugica

The following interview, given by Éric Toussaint to the Argentine review Mugica, has been adapted to make it accessible to readers who are not necessarily aware of the details of what is going on in Argentina. The arguments used in the article (...)
Ecuador

We denounce the renegotiation of the debt by Lenín Moreno’s government

3 August 2020 - by Eric Toussaint, Maria Lucia Fattorelli, Alejandro Olmos Gaona, Hugo Arias Palacios, Piedad Mancero, Ricardo Patiño, César Sacoto, Ricardo Ulcuango

We are releasing an open letter to the President of Ecuador and his government regarding the debt renegotiation that is under way. The letter is signed by former members of the Ecuadorian Debt Audit Commission (CAIC), including Eric Toussaint, (...)
IMF: if you didn’t like the starter, wait for the main dish

5 July 2020 - by Amandla

The Treasury has made clear that it is seeking a smallanyana three to five year loan from the International Monetary Fund (IMF) of $4.2 billion, at a smallanyana interest rate of 1 or 1.1%. It will also be looking for a loan of $55-60 million (...)
Should South Africa Follow the Law of the Jungle – or the Doctrine of Odious Debt?

30 April 2020 - by Patrick Bond

South Africa’s fierce debates over the costs and benefits of a proposed International Monetary Fund (IMF) bail out of $4.2 billion unveil the country’s massive weaknesses and potential strengths, at a time food protests have moved from the slums (...)
Debt Against the People: an ABC

29 January 2020 - by Eric Toussaint

Introduction Over the last ten years Greece has been a prime example of how a country and a people can be deprived of their liberty through clearly illegitimate debt. Since the 19th century, from Latin America to China, Haiti, Greece, Tunisia, (...)
Haiti 10 years after the earthquake: the fight for social and economic justice continues

13 January 2020 - by Iolanda Fresnillo

On January 12 2010 an earthquake of magnitude 7.3 on the Richter scale ripped through Port-au-Prince metropolitan area and other parts of Haiti. More than 1.5 million people, representing 15 per cent of the country’s population, were directly (...)
Argentina: facing another debt crisis

18 December 2019 - by Eric Toussaint

After four years of brutal neoliberal policies under Mauricio Macri as President, Argentina is again facing a major debt crisis. Let us remember that when Macri started his mandate in December 2015 he accepted all the injunctions formulated by (...)
South Africa: Cancel Eskom’s odious debt to the World Bank

3 September 2019 - by Jonathan Cannard

Despite significant and wide-ranging concern about the fate of Eskom, the World Bank has recently expressed its full confidence in the state-owned power utility’s ability to complete Medupi power station and ensure national electricity provision. (...)
What we have learned from the US indictment on odious loans to Mozambique

23 January 2019 - by Tim Jones

Yesterday (3 jan 2019) three former employees of Credit Suisse were arrested in London over $2 billion of odious loans to three state owned companies in Mozambique, given in 2013. The loans were given to companies with no revenue, and were not (...)
Break the Taboo on Odious Debts and their Repudiation

7 January 2019 - by Eric Toussaint

This English version of the interview originally published in French by the independent online journal Le Vent Se Lève (LVSL) has been fully revised and complemented by Eric Toussaint. The original French version is available here. Éric (...)
‘Outrageous’ Mozambique debt deal could make 270% profit for speculators

8 November 2018 - by Tim Jones

People of Mozambique to pay $1.7 billion to $2.2 billion on original loan of $760 million, which was not agreed by Mozambique parliament, and which has been of no benefit The government of Mozambique has announced it has reached an agreement (...)
Preface of ’System debt’ by Éric Toussaint

16 July 2018 - by Patrick Saurin

Éric Toussaint has an acute and thorough knowledge of public debt issues, thanks not only to his theoretical research work but also to his involvement in the field (notably in Ecuador and Greece). As he takes us through 19th century to 21st (...)
Rethinking Odious Debt

6 April 2018 - by Pierre Pénet

The doctrine of ‘odious debt’ has often been invoked to call for the cancellation of debts in very specific and complex political contexts. In this stimulating essay, Pierre Pénet endeavours to reconsider its application in today’s society in a (...)