The Loss of Sovereignty: How International Debt Relief Mechanisms Undermine Economic Self-Determination

Journal of Law and Politics, Vol. 2, No. 4, p. 3, 2009

Monash University Faculty of Law Legal Studies Research Paper No. 2010/44

15 Pages Posted: 31 May 2011

See all articles by Dr Noel Villaroman

Dr Noel Villaroman

United Nations; Monash University - Faculty of Law; International Consortium for Law and Religion Studies; Law and Religion Scholars Network (LARSN); Center for Civil and Human Rights; Integrated Bar of the Philippines

Date Written: 2009

Abstract

This article discusses the process that debtor countries go through in the two mechanisms created to work out solutions for their huge and unpayable external debts, namely, the Paris Club and the Heavily Indebted Poor Countries (HIPC) Initiative. As the international lending process is structured today, it is through these mechanisms that debtor countries obtain debt forgiveness, reduction or rescheduling. The absolute control of these two mechanisms by creditor countries will be examined, together with the crucial role reserved to the International Monetary Fund (IMF) as the final dispenser of the 'stamp of approval' whether debtor countries will ultimately get debt relief. Also, this article identifies the so-called 'conditionalities' that are attached to debt relief obtained through the Paris Club and HIPC Initiative. What sort of policy prescriptions, 'structural adjustments' or other domestic changes are being pushed through these mechanisms? And finally, this article examines how these conditionalities comport with the principle of economic self-determination of peoples that supposedly guarantees their right to pursue an independent process of economic development. Essentially, this article attempts to answer these questions: Are the Paris Club and HIPC mechanisms fundamentally at odds with economic self-determination? And more generally, are they respectful of the 'rule of law' in the international system?

Keywords: Financial aid, Paris Club, Heavily Indebted Poor Countries Initiative, HIPC, international lending, IMF, International Monetary Fund

JEL Classification: K00, K3, K33

Suggested Citation

Villaroman, Noel, The Loss of Sovereignty: How International Debt Relief Mechanisms Undermine Economic Self-Determination (2009). Journal of Law and Politics, Vol. 2, No. 4, p. 3, 2009, Monash University Faculty of Law Legal Studies Research Paper No. 2010/44, Available at SSRN: https://ssrn.com/abstract=1815791

Noel Villaroman (Contact Author)

United Nations

New York, NY 10017
United States

Monash University - Faculty of Law ( email )

Wellington Road
Clayton, Victoria 3800
Australia

HOME PAGE: http://www.law.monash.edu.au/research/hdr/index.html

International Consortium for Law and Religion Studies ( email )

University of Milan
Faculty of Law
Milan, 20122
Italy

HOME PAGE: http://www.iclars.org/index.php

Law and Religion Scholars Network (LARSN) ( email )

Law Building, Museum Avenue
Cardiff, Wales
United Kingdom

HOME PAGE: http://www.law.cf.ac.uk/clr/networks/lrsn.html

Center for Civil and Human Rights ( email )

P.O. Box 780
Notre Dame, IN 46556
United States

HOME PAGE: http://law.nd.edu/center-for-civil-and-human-rights/

Integrated Bar of the Philippines ( email )

IBP Building, No.15 Julia Vargas Avenue
Ortigas Center
Pasig City
Philippines

HOME PAGE: http://www.ibp.org.ph/

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