October 20, 2007
In November 2004, Paris Club creditors canceled an unprecedented 80% of the debts they had lent to the regime of Saddam Hussein, catapulting the development of the Doctrine of Odious Debts forward. Now, legal scholars are identifying the many legal principles and precedents supporting lender liability and ensuring that odious debts are never created again.
On the eve of the invasion of Iraq in 2003, our foundation published an article calling for the treatment of Iraq’s debts as odious. The article was reprinted and cited widely – a forerunner to the Western press debate that would follow until it was all but accepted that Iraq’s debts were really Saddam Hussein’s and the creditors’ to resolve.
At the same time, a coalition of Iraqi lawyers and economists joined up with legal advisors from England and Canada, professional arbitrators, the activist group Jubilee Iraq, and Probe nternational to help spread the word about the Doctrine of Odious Debts to Iraqi civil society organizations, scholars, religious leaders and press, winning the support of a broad base of Iraqi society right up to the interim Prime Minister Iyad Allawi who argued that the vast majority of Iraq’s debt had been used to build up the war machine of Saddam Hussein and was therefore odious.
It was against this backdrop that the Iraqi debt negotiating team went off to meet with the Paris Club of official creditors to discuss write-offs. The Paris Club knew that the Iraqi public would rather see the creditors in court if substantial debt relief was not granted. It was.
In November 2004, Paris Club creditors canceled an unprecedented 80% of the debts they had lent to the regime of Saddam Hussein.
Iraq, catapulted the development of the Doctrine of Odious Debts forward. Now, legal scholars are identifying the many legal principles and precedents that support lender liability for loans made to sovereigns that are not used in the interest of the state. Lawmakers from lending countries have also rallied to ensure the outstanding stock of odious debt is dealt with transparently and fairly and that odious debts are never created again.