Adobe reader necessary.
Look, sailor, someone tell you I dissed yo momma or something? 'Cause you seem to be real hot about this shit and it means next to nothing to me (as I said, above). You want to argue this point with someone, it ain’t me, OK? I don’t give a rats ass about it, I just mentioned something I had read, all right?
Sheeeesh. Disagreeable sumbitch.
The paper you present is merely an academic study presenting what it deems would be a good thing but it does not in any way support your assertion that it is a recognized and established principle of international law that new regimes are free to repudiate foreign debt. the paper is, in fact, arguing that would be a good thing. it does not say that is an accepted principle.
And you keep saying you don’t care about it. Well, if you don’t care about it, why do you keep arguing for it? I do care to correct something which I believe is wrong. If you don’t care then you can just drop it. Or if you want to continue to defend your point you can provide cites showing: (a) authorities in the field of international law saying this is an internationally accepted principle 8and* (b) exaples of countries that have done this. there have been plenty of regime changes in the world in the last 50 years. Please tell me how many repudiated their debt. Furthermore, how many repudiated their debt and did not have their assets abroad seized? Enquiring minds want to know.
OK, befor you two get even grumpier, here’s something to chew on: it seems pretty inevitable that at least some reconstruction money will go to foreign firms and/or foreign managers and officials for reconstruction-related projects; I doubt there is the organized and ready-to-go kind of expertise in Iraq to get started on huge infrastructure projects quickly.
So how do you maximize domestic Iraqi participation without compromising efficeincy and/or wasting precious reconstruction resources? What kind of procedures would you put into place, and how would you go about staffing projects? I’d hate to see Iraqi reconstruction end up like post-Soviet privatization and government restructuring, with a disproportionate amount of cash going to Price Waterhouse consultants and American IT companies. Takes too much money out of the country, and builds anti-Western resentment. There’s still anti-American backlash in Russia over it.
Sailor, as having been involved with distressed debt for years in my previous investment bank life, there is plenty of real life examples of sovereign debt being reneged on. People in the groups I worked for made a living on buying this worthless paper at 5 cents on the dollar or less, and then being able to settle for 10 - 20 cents.
The priniciple is that if a regieme change does not honor previous debts, then it won’t honor new debt. So, in order to get new debt, they have to pay the old or no one will loan to them.
In Iraq’s case, dollars to donuts there will be plenty of people lined up to loan new money. a) governments agencies, say from the US or Japan b) project based loans backed by oil receipts and c) emerging market/high risk funds
In order to keep an “investment grade” rating, however that may be defined, the new government may agree to pay a portion of the sovereign debt (Russia, Argentina, Yugoslavia, etc are examples). I have friends who played that game with Yugoslav government debt, and yes they did get some money. Key here is the debt workout. Collounsbury may have this one his plate as a possible investment for Iraq.
Yes, I already acknowledged they do this for different reasons. I never disputed that. My disagreement is with the assertion that it is a recognized and established principle of international law that a change of regime erases a country’s debt.
Which confirms what I am saying. the point I am making is that countries renegotiate their debts all the time taking into account their position and their creditors positions. Nothing special about that. they do it continually. Often when the creditors realise the debtor can’t pay anyway the creditors will forgive all or part of the debt etc. It is a question of negotiating. But my point is that a change in regime does not in any way, shape or form automatically erase any obligation to repay debts.
The new regime is considered a successor to the old and is bound by all the international treaties and obligations. Can the new regime renege on them? Of course they can! Just ask Fidel Castro. But the effect is exactly the same as if the old regime had reneged on them. Exactly the same. The new regime cannot claim some principle in international law which exempts it from previous obligations. That is my point and I think you agree with it.
But if anyone believes the contrary then I would like to see:
A) cites from authorities in international law stating this as a recognized principle
B) jurisprudence from courts citing this as a recognized principle
C) precedents: Cases where the international community recognized a regime change erased the debt.
I do not think there is enough evidence to support this as a “recognized international principle”. Now, can a country renege on its duties? Of course it can. Cuba did it. But the USA has been bitching about it for 44 years and it seized what property it could from Cuba (and continues to seize what it can). Which is a pretty good indication that the USA does not recognize such a principle. Spain and Canada arrived at settlements where Cuba agreed to compensate for the expropriations etc.
As you know well, this is not so simple. Loans can be made to the government but more often they are made to companies or corporations, governmental or not. So you would have another level of complication. Suppose the First Bank of Dixie loans ten bucks to the First Bank of Baghdag and the loan is guaranteed by the governments of the respective countries. The first one on the hook for repayment is the First Bank of Baghdag and the regime change means nothing for the prospects of this bank remaining a viable business. If it defaults the consequences are the same. suppose it defaults. Fine, next in line is The Iraqi government. So they say they default. Next in line is the US government who guaranteed the loan.
So, you see, there are many different loans, many different circumstances. Which ones get erased and which ones don’t?
elucidator
[Moderator Hat ON]
Elucidator, there is to be no namecalling in GD.
[Moderator Hat OFF]
Getting back to the topic, and with Eva Luna´s suggestion; in my opinion what should be done with the reconstruction contracts that cannot be given to Iraqi companies for lack of experience or what not should be given to companies in the Middle East region; that should make bonds between the nations, and pacify anti-americanism; besides, I´m bound to think that logistics would be easier and Middle East companies have to know better what´s needed and how should it be done. Just my 2c
Now rip it appart and tell me why it is an awful idea.
Okay, it wasn’t that clear to me first time around. Yep, I certainly agree that there is no established practice of allowing a country with a regime to walk away free and clear with no obligation or penalty.
Not to be pendantic, perhaps we can agree that generally speaking the majority of countries with regime changes tend to honor their sovereign debt. However, there is no such thing as a universally accepted or enforceable international law regarding sovereign debt and transfer to successor governments. What exists is the generally accepted practice of not screwing up credit, future loans, and international political and business relationships.
A proposal:
Any damage done to the Iraq by the U.S. should be covered by the U.S. If the U.S. blew up the building or bombed a power plant, it should be on their nickle.
Any damage to the country from sanctions imposed by the U.N. will be bourne by the international community. This may include some cost rebuilding of Iraq’s oil industry due to the neglect while the sanctions were imposed.
All other ‘rebuilding’ activities to be funded by Iraqi oil sales or whatever at the discretion of the new Iraq government.
Foreign debt… damnifiknow. But can we agree on principals 1-3?
Exactly. Ergo: there is no recognized principle of international law which establishes that a regime change erases all debt. Furthermore, “What exists is the generally accepted practice of not screwing up credit, future loans, and international political and business relationships” describes general practice with or without regime change. Some countries have defaulted without excuse of a regime change. In other words: a regime change means absolutely nothing as far as changing the obligation to repay or any other obligations the country has incurred.
Since the communist revolution Cuba has claimed the lease of Guantanamo is invalid as it was imposed by the USA on corrupt governments, puppets of the USA, who were hardly in a position to refuse, which is certainly true. Castro wants the Americans out. And yet the Americans will not leave saying the acts of previous governments, even if puppets of the USA, bind future governments of Cuba.
I have to nitpick here. It is not the government who incurred the debt, it is the country. The government in representation of the country. Governments reopresent their countries. International treaties bind countries, not governments. Only if the country disappears then the treaty is dissolved. Even in cases like the dissolution of the Soviet Union, Russia declared itself successor of the dissolved SU and assumed the treaties.
Also, how much change is a “regime change”? You could have the Democrats disavowing the obligations incurred by the Republicans. A regime change can be anything from a change in party in government to a bloody civil war.
Which explains why you seem to post (quite vociferously, I might add) in almost every single thread on the subject…
Huh? Wha? So far as I know, the concept of “odious debt” is entirely new to me. I very much doubt that I have ever mentioned it before, vociferously or not. If friend SPOOFE can prove otherwise, he is invited to serve a ration of crow, or, failing that, to eat it.
It woud appear that this dramatic excercise in triviality is provoked by my referring to the concept of “odious debt” as an internationally recognized “principle”. In his feverish devotion to semantic perfection, this has quite put sailors knickers in a bunch. I entertained no such intent.
Let it be so stated: the concept of “odious debt”, while an historical occurance and a concept remarked upon in academic circles is in no wise an “internationally accepted principle”. Whether this arcane semantic triviality is worthy of the ammunition expended upon it is a matter best reserved for the privacy of sailor and a mental health professional. Further, I accept the scolding of the esteemed Gaudere without demur.
And finally, in conclusion, I repeat: sheeeeesh!
I seem to have strayed into the wrong forum. Help me out here, elucidator, what does “disingenuous” mean?
You can afford a computer but not a dictionary?
Gentlemen, please, enough of the sniping. This is GD, is it not? Then please get back to debating something of more substance than each others’ perhaps unfelicitous and less than optimally diplomatic word choice. I need mental stimulation, people, and I’m depending on you!
I hear there is a large Saudi Construction company run by a man with the family name “bin Laden” that would, I’m sure, be happy to entertain bids for contracts.
elucidator, just come off it. You have done nothing but insult me and provided no support for your earlier assertions
and
So far all the evidence presented seems to contradict that and you are the one getting all upset and insulting me. If you want to insult me please kindly start a pit thread. Here in GD please restrict yourself to the issues being debated. The fact is that you have provided zero evidence to support your assertion. Zero. China Guy supports what I said. International law, which is mainly based on international custom, does not recognize any principle which allows a country to repudiate its debt because the regime changed. If you disagree with this please present your evidence or just drop it, but quit insulting me. I am not insulting you and I am not the one with his knickers in a bunch. Just calm down or take it to the pit.
Fine. Sure. Whatever.
I made it all up. You got me. That Cuba thing? Invented out of whole cloth, and inserted into the history books by my minions. Got thousands of them. Time machine too. Those articles cited, also total fakes. I have long since hacked Google to reflect whatever fantasy I can dream up. In fact, plug in the words “odious debt” and you will get some 18,500 returns. Sometimes, I just don’t know when to quit, you know? Like eating peanuts or something.
As far as insults go, yeah, I think when someone suggests that I am “making shit up” he is insulting me. Not cleverly, as I can amply demonstrate that such is not the case. Hence, the first to throw mud during this utterly trivial exchange was you, was it not? Might be best, next time, to wash your hands before you declaim on your wounded innocence.
And furthermore…sheeeeesh
Oh, heck, I quite forgot my most triumphant excercise in mendacity! I even managed to cook up a whole website devoted to discussing the nonexistent principle of “odious debt”. You can find it here
http://www.odiousdebts.org/odiousdebts/index.cfm?DSP=content&ContentID=6946
Wherein they discuss the New Yorker article (March 31/2003)
A clean slate for Iraq by James Surowiecki. (Next time I must pick a psuedonym I can actually spell!)
Say what you will, when it comes to “making shit up” I have no peer.