DEBT ARBITRATION

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FAIR AND TRANSPARENT DEBT ARBITRATION

REPORTER: RUTY NYABETA

TIME: 8.30- 11.00 AM

ORGANISATION: AFRICA FORUM AND NETWORK ON DEBT ARBITRATION

NO. OF PARTICIPANTS: MALE 50 FEMALE 30 TOTAL 80

KEY SPEAKERS: CHARLES MUTARA- EXECUTIVE DIRECTOR

SUMMARY

“everywhere in the world new ideas are realized not because they are bad or wrong, BUT just because it is human to be skeptical of new ideas that we neither understand nor are fully convinced of” anonymous.

The Fair and Transparent Arbitration (FTA) mechanism is all about =why arbitration and not just debt cancellation. The two versions of the Heavily Indebted Poor Countries Initiative IHIPC) of 1996 and 1999 failed to give a lasting solution to the third world debt question.

The multilateral Debt Relief Initiative (MDRI) of 2005 at the Uleneagles G8 summit has just joined the no. of creditor-initiated proposals (on the debt crisis of the developing world) with it's own shortfalls, especially the fact that it is building on the wrong foundation of HIPC unconditionally and process. It seems in the process the ecological/historical debt; the illegitimate debt and odious debt have been forgotten or simply swept under the carpet. Yet, countries such as the DRC, the Phillipines, Argentina and Indonesia among others are still choking an paying for the debts of thire formerdictatorial regimes; wrong/bad policy adbvice of the international financial institutions: irrespecsible borrowing of past regimes and reckless lending by creditors.

The question of what is to be done about future debts those coming after debt relief from the beneficiaries of the 2005 multilateral Debt Relief Initiative are no clear. AFRODAD believes that debt relief on it's own is not the panacea- it is necessary to address the question of uneven power balance between the global south and north if debt is not to be used any more as an instrument of control or domination of the former by the latter. The apportioning of the present debt crisis between creditors and debtors remains vital for the building of good global partnership between the global south and north. There is urgent need to end the domination and monopoly of creditor nations in deciding how to hand the global south debt with a fair and transparent arbitration process.

RECOMMENDATIONS

debt relief or cancellation can work best alongside a fair and transparent arbitration (FTA) mechanism to alert the historical problem of countries falling back into indebtedness. the only way to proceed is drawing attention to existing legal double standards-which minds more critical that might even be inclined to call a global form of legal apartheid. this is a strong and justified moral, legal, ethical and economic argument.