Debt Relief

Debt audits: contesting the legitimacy of external debt burdens

Odious Debts Online
Probe International
November 26, 2004

A summary of conclusions from the International Workshop on Debt Auditing, Brasilia, Nov. 9-11, 2004

An international workshop on debt organized by Jubilee South has called for the implementation of a comprehensive, official audit process to assess the legitimacy of external debts owed by countries over-burdened with outstanding loan repayments.

The workshop convened in November to promote the realization of debt audits concluded that external debt had impoverished many countries – including “so-called medium income countries” – and had violated the rights of citizens to hold their governments accountable.

Attended by 17 activist organizations from Latin America and the Caribbean, the workshop called for a detailed analysis of the motives and manner in which external debts had been contracted, the amounts repaid on interest charges and debt servicing and the resulting impact on the citizens of each of the countries concerned.

In the public statement summarizing its conclusions, the International Workshop on Debt Auditing charged that, in most cases, the external debt loads under consideration were tainted with illegitimacy and illegality, “including fraudulent and corrupt dealings”.

Participants at the three-day workshop, held in Brasila from Nov. 9 to Nov. 11, felt the perceived legal and political significance of external debt reinforced the apparent obligation of countries to comply with the terms and conditions determined by lenders (such as the International Monetary Fund, the World Bank and the Inter-American Development Bank).

The implementation of debt audits were conceived as a vehicle for information sharing that would enable citizens to evaluate the occurrence of public debt in official policies and budgets. The audits, the workshop formulated, ought to be conducted on the basis of “trustworthy data . . . processed in a rigorous, transparent and socially reliable and responsible manner.”

In its concluding statement, participants called on the citizens of affected countries to demand their governments suspend payments on external debt and the contracting of new credits. A growing momentum toward the repudiation of external debt would be carried further, the statement said, by the implementation of audits to put an end to illegitimate and illegal debt.

Categories: Debt Relief, Odious Debts

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