Please, please please stop bitching at each other. It’s really very unflattering.
Perhaps I can summarize the principple of post-regime change debt repudiation in a manner agreeable to all.
Some new governments, after a regime change, repudiate their debt on the grounds that they feel it was incurred by an unjust and/or puppet regime, and since the debt incurred was not used for the benefit of the nation at large, the new regime feels that, as the true moral and legal representative of the people, it is not morally or legally required to repay the debt.
Other new regimes, whether they feel that way or not, take a different approach: whether or not they should be held responsible for repaying the debt, they choose to repay at least part of it, because if they don’t they fear they will be unable to obtain new credit.
I am unaware of any point of codified international law which addresses this point directly; it seems to be more an issue of custom and/or pragmatics. So maybe it’s better to call it a rule of thumb than a matter of international law.
This may not be a perfect explanation, but I hope it gets everyone to snop snipping at each other, or at least serves as a starting point for further productive discussion.
elucidator, for something you care so little about you sure keep it going.
In summary for those who might be tuning in now, the only support you have offered is the case of Cuba after the Spanish American war. This is a very bad example because the Treaty of Paris was a settlement of many items of which the Cuban debt was just one. At the same time Spain accepted to assume the Cuban debt, the USA paid Spain for the Philippines. It was a package deal and was not based on any accepted legal principle that Cuba was no loger responsible for the debt. The Treaty of Paris was signed by Spain under duress and the direct threat of attacking the Spanish mainland in the Iberian Peninsula. It was imposed by the USA on Spain which had no choice but to accept it. In other words it does not support your assertion at all.
On preview I see the New Yorker article you mention. It adds nothing new. It is just an op ed piece saying the author thinks it would be a good idea. It does not in any way, shape or form prove there is an established principle as you claim. It does not even claim that principle exists. Again, if you want to prove your point, please provide:
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.
Otherwise I do not believe you are convincing anyone.
Eva Luna, I am not snipping at anyone and have been pretty civil so I really do not feel your admonishments are fair.
international law is mainly based on international custom (and treaties) seeing that there is no international legislative body. So, for all practical purposes, international custom is international law. elucidator asserts forcefully and repeatedly that there is a well established and recognized principle of international law “which permits a new regime to repudiate the debts of a previous regime”. I say he is mistaken and so far he has failed to make his case. The only evidence he presents is an Op-ed with no probative value. I am not snipping at anybody but this is GD and I am presenting my position quite objectively and calmly. I have not insulted anybody and yet continue to be insulted by elucidator. I suggest we all stick to resenting or evidence and arguments and let the readers make up their minds. And if anyone feels like a personal fight, let him take it to the pit.
For what it’s worth, and based on the semester of International Law I just finished, I agree wholeheartedly with sailor. Countries sometimes try to claim that they shouldn’t be responsible for the debts of previous regimes, but creditors don’t find it a terribly persuasive argument. There’s no international customary law built up behind the concept of odious debt.
Now, it’s an interesting question whether or not, normatively, new regimes should be able to repudiate old debt. In some instances, I think it’s fair. But that’s a discussion for another thread. (Perhaps y’all want to start it, and relocate this debate over there?)
Gadarene, thanks for your input. I am not a lawyer but I did buy a couple of books on international law at a goodwill store for about $1 each. _
Barring any new evidence presented by elucidator I think we have each presented our cases and readers can make up their minds on who they believe made the better case. We can let the matter rest.
BTW, my source for the treaty of Paris was this page.
Reading about the Spanish-American war I am amazed at the parallels with this one. It was started on trumped up charges (the Maine incident) by an administration which was spoiling for a war and would have found any other excuse. It was an imperialist war imposed on a country which did not have the power to defend itself. It was drummed up by the press and those who did not supported were called unpatriotic (Mark Twain was a prime example). It was done with the stated excuse of giving freedom to the Cubans and to the Philipinos but the USA occupied those countries for 50 years. The Filipino leader who fought the panish turned right around to fight the Americans but the Philippines would not be independent for another 50 years. Same thing with Cuba which was in effect an American protectorate and was not kicked out until Fidel Castro came along. And, of course, the real purpose was the exploitation of the economic and natural resources. Pretty much the entire Cuban economy came to be in American hands. Amazing how history repeats itself.
Wait a minute. You’re both right. It’s a floor wax and a dessert topping!
All snide comments aside, I actually do believe that. Both or you guys are right because you are really arguing too different things: International law vs Customary international practice/precident.
I have no case whatever as to whether or not “odious debt” is a valid international precedent or “principle”. I have not made such a case, and will not attempt to do so. Perhaps had I said “historical precedent”, it would have been more correct. To my mind, the distinction is a minor semantic quibble, unworthy of the attention of such minds as ours.
What I do care about is the insinuation that I made this up. Clearly, I did not. That is my only assertion. As to other feeble slanders posted, I will not trouble to acknowledge them. Think of them what you will.
“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.”
Uhh… yes; and what´s your point? Are you suggesting that all companies in the Middle East are terrorist groups or something? :rolleyes:
Might wanna change your name back to John, 'cause international law is, most often, exactly the same thing as customary international practice/precedent.
Elucidator’s original statement that new regimes’ repudiation of debts is a “recognized principle” is incorrect insofar as it refers to international customary law. I’ll accept his revised statement that historical precedent exists, although with the caveats of sailor’s post above (that is, that the existing precedent isn’t really one-size-fits-all, nor is it likely to be reapplied in any but the most particular circumstances).
And I want to be clear that I, for one, am making no insinuation that elucidator made up the concept. I think it’s clear that he’s been operating in good faith from the get-go in this thread. He’s just been a little mistaken regarding international law.
“Might wanna change your name back to John, 'cause international law is, most often, exactly the same thing as customary international practice/precedent.”
Dang, I was getting used to the name already!
But that was kind of my point. Is there really any such thing as “international law”? What court do I go to to try my case? What legislative body passes these laws? Yeah, there are things we call “international law”, but de facto it exists only in the mind of the beholder, no? And since Iraq is now on the US’s side, maybe they get to fall under our umbrella, which, as many have pointed out on this forum, does not generally recognize “international law” unless it suits us.
There is history, precident, custom, and probably the best answer yet: You do what you have to as long as you think other countries will still do business with you. Sorry if that paraphrase was a bit off. I was too lazy to go back to page 1 and find the exact quote.
Thats a pretty fair summation, Gad I will quibble slightly that I don’t see any reason to assume that because I refer to a “recognized principle” I am asserting that this is the same as “accepted international law”. I would have been perfectly happy to correct this misapprehension, if I had been offered any opportunity. Such as:
Someguy: Hey, shit for brains, do you mean to say that this “recognized principle” has the force of international law?
elucidator: Why, no, you clod, of course not.
Best I can tell, international law is a pretty flimsy structure of customs, treaties, and like such, as witness previous fervent debates as to whether the “preemptive war” is legal under international law. For my two cents, if international law cannot or does not make aggressive war illegal, it ain’t worth a fart in a high wind.
That said, I also firmly believe that if the Bushistas thought they could get away with it (i.e., royally screwing France) they might very well claim such legitimacy for the principle of “odious debt”. If they do not, it is more a matter of weighed consideration of advantages, not any such nicety as international law.
We don’t care. We don’t have to. We’re the Americans.
John Mace, we are not going to get into a deep discussion about what is or is not international law but it definitely does exist objectively. Many countries have submitted their disputes to international courts but also national courts apply principles of international law all the time. If Iraq repudiates their debt and the USA attempts to freeze their assets in American banks, the US courts will definitely have jurisdiction and will apply international law. There are entire books of cases of international law. So, yes, international law does exist objectively ( I hope Gadarene will concurr) as a body of law which is based primarily on usage and custom (like the common law).
Now, elucidator said there is a principle of international law which allows a country to repudiate their debt after a change of regime. I say this is not so and a court would not accept this argument. Suppose an American bank tried to freeze Iraqi assets to recover what it was owed. Iraq then claims it is allowed under international law to renege on the debt. This argument would not be accepted by the court…
International law does exist as a body of law and in that body of law there is no principle that a country can legitimately repudiate their debt after a change of regime. The only precedent mentioned (Cuba) is no precedent at all as it was part of a gobal settlement and, furthermore, it was imposed by the USA rather than freely accepted by both sides. It would hardly be admissible as precedent.
The fact that something has happened does not automatically make it legal. If different countries of the community of nations repeatedly freely agreed that a change of regime erased all debts, then, eventually, this would become an accepted principle to apply in future disputes. But the fact is that in the only instance we can come up with it was imposed and also it was not a stand alone measure but part of a package. The precedent is quite the contrary: changes in regimes do not erase any obligations. That is the precedent and that is the law. Furthermore, if a country does not recognise it previous debt then a logical consequence is that it will not be recognized as creditor either.
Now to first say “there is a principle of international law which allows a country to repudiate their debt after a change of regime” and when challenged to prove it try to argue “there is really no definite thing as international law” is just weaseling because if the second statement is true then the first one cannot be true. The second statement does not confirm the first, rather it contradicts it.
I said “But there is a recognized principal, international-wise, which permits a new regime to repudiate the debts of a previous regime”. The word “law” nowhere appears. I could have said “concept” or “principle” or “fallacy”. Yes, such a thing exists, it is discussed, it is an historical “thingy”. But thats it! That’s all!
If you read that to mean “international law”, then thats your issue, buckaroo. (As it happens, I’m most likely entirely in agreement with your interpretation as regards international law. Especially as law tends to be the creature of those who are owed, and not those who owe.)
So this “principle” of yours which happens to not be a principle of international law is a principle then of what exactly? Because I would guess international law is what it is all about.
Now, if I say there is a principle that says bodies fall upwards I think most people would argue I am stating a principle of physics and it is wrong. So you are saying the principle is true so long as I do not state it as being a principle of physics. So it would be a principle of what exactly?
Again, if your principle that a change of regime erases all debt is not a principle of international law then it is a principle of what? A principle of imagination? A principle of falsehood? Can you please elaborate?
I have dealt with this previously. I believe a search on Iraq, debt and France should turn up a quick analysis of the actual holders by me about a month ago.
In brief: France is a minority holder in the above estimate. France is simply the largest single Western debt holder, by most estimates.
Kuwait is the largest single note holder, usually the estimates include liabilities from reparations judgements against Iraq. After that, the rest of the Gulf states follow close on, as memory serves the GCC countries hold the vast majority of outstanding liabilities.
This has been dealt with already, so we can say, there is no recognized principal at all in this regard. Practice in general has been that a sovereign does not walk away from its obligations with a change of government. You can renegotiate, but not walk away. There are good reasons for this, and one of the ironies of the present arguments on hte issue of debt is that a section of American conservatives, usually so piously against debt write-offs and the like for their “moral hazard” [a term of art by the way, in finance, ref’ing hazard that protecting an agent against a bad event may encourage behaviour that leads to that event], have suddenly dredged up excuses for ‘odious debt’ write offs. Idiotic idea really.
Rank hypocrisy on the part of the yammering ideologues.
Elucidator no doubt stumbled across this and was taken in.
What should and will happen is a Paris & London Club plus meeting of debt holders to renegotiate and restructure the debt. (only other choice is to be the US’ permanent slave when it comes to financing) As well as figure out who has viable claims. There is a lot of confusion in this area - really dangerous levels of confusion and it needs to be worked out as soon as possible. Bloody nightmare.
As an aside to China Guy, we will not be making any Iraq debt plays. Not our purview, however the disposition of the debt, manner in which this is taken care of is of great interest to all, obviously. The ignorant cowboy expediency displayed by some of Rumsfeld’s people, from when it appears much of the ‘odious debt’ talk is being spun, are not helping matters. Of course nothing novel in that.
I should note that while project finance is already being looked at a note of caution is necessary. The Multilaterals (IMF, World Bank and its sub IFC) (and the US in general, although expediancy is likely to break this policy) take a dim view of countries in Iraq’s position pledging project revenues and have a generic policy to refuse to participate in such. So there you get into a bit of sticky wicket, as WB & IMF are going to be key players in major projects. Still my amigos, the vultures in London are poking round trying to figure these things out. (I say this as a war profitter you all know)
As to Eva’s question in re reconstruction efforts and the life, I agree. A danger. There seems to be some effort on developing local sourcing, as well as regional. Do recall a key difference is unlike Russia, several of Iraq’s immediate neighbors (Gulf and Joran) have perfectly viable private sectors with experienced staff that speak the language. FSU and FSB generally ex-Germany were in something of an economic isolation tank for a rather longer time.
Gulf construction, contracting and related groups, including my dear Mace the unfairly maligned Bin Laden Group may be well placed for sub-contracting. I would expect to see Oger and CCC out there shortly. Jordan also has a reservoir of second tier companies, and a fairly substantial reservoir of talent for its size. Egypt might even be able to get in on the act, although frankly Egyptian groups are such an unending pain in the ass… Well, I am going to an official conference on these issues (Iraq reconstruction & participation) in about 2 weeks, perhaps I will post something about it.
This is correct, and those who are falling for the line that Iraqi oil will pay for reconstruction are naive fools.
Estimates on the capital investments required to refurbish the oil facilities and arrest long term decline are all over the place, but it is fairly clear that initially much Iraqi oil revenue will be need to finance simple refurbishing and reconstruction of its own sector.
That leaves a largely maimed economy to be financed by the occupying powers.
Well, that all depends on who it is, but as a general matter, stability will require a larger and more significant military presence for a longer time than Rummy et al thought.
Rather unpleasant reality that.
As to the comment :
Don’t be. I warned about this, worst of all worlds.
Germany and Austria had to pay for WWII and the Holocaust, although there was a “regime change” after the Nazis’ fall.
do agree on that.
The US enforced this “restitutions”.
I guess Germany would be quite pissed off if the US now decided that the depts to Germany are cancelled because they do not apply anymore. We know the real reasons anyway: Germany was against the war.
