Odious Debts Online
December 12, 2007

Concerns about the status of Fiji’s current governing power have prompted some analysts to warn lenders they should beware of dealing with the country’s self-declared leader and his administration, who rule without having been democratically elected by the citizens of Fiji.

It has been a year since Commodore Voreqe Bainimarama led Fiji’s bloodless military coup to power. The country is now considering the second budget issued by Bainimarama’s unelected interim government and the legality of this government, still a matter under consideration before the courts, has caused some to wonder what would happen if the government were declared an illegal regime? Dr. Satish Chand, who heads up the Pacific Policy Project at the Australian National University, drew on the Doctrine of Odious Debt for a recent commentary on the subject.

“Will a future constitutionally elected government be obliged to honour a contract entered into by creditors with an illegal regime?” The legal theory of odious debt would suggest otherwise, he said. “I am no legal expert, but my understanding of this theory is that any debt incurred by an illegal regime is unenforceable unless shown to” have been “used in the public interest. The onus, therefore, is on both the creditors and the Interim Government to ensure that funds accessed from abroad are used for the ‘national interest.'”

This notion is not a new one for the government, says Dr. Chand, “but it is a completely new ball game for at least some of the lenders!”

A commentary published by Fiji’s Daily Post warns that “until Fiji has an elected government … any spending of the public purse will carry the risk of being merely provisional at the very least, or the stigma of someone doing something with the money of others without their consent at worst.” According to the Post, “only an election can resolve the issue of fiscal legitimacy. That is to say the only answer to the question ‘by what right do you spend that money?’ is properly ‘I was democratically elected to do so.'”