FOREIGN DEBT ON DEBATE AT THE HUMAN RIGHTS COUNCIL

Statement by Juan Pablo Bohoslavsky at the 28th session of the Human Rights Council

English

In the framework of the 28th session of the Human Rights Council, Juan Pablo Bohoslavsky who is an “Independent Expert on the effects of foreign debt and other related international financial obligations of States on the full enjoyment of all human rights, particularly economic, social and cultural rights” made an oral statement.  On 9 March 2015, Juan Pablo Bohoslavsky provided the Human Rights Council with an overview on his activities since he was appointed in 2014. Opening his statement he emphasized that “debt vulnerabilities around the world are high and growing. In the low-income country group alone, around 16 countries are currently in debt distress, or at high risk of debt distress. Despite debt relief, most Heavily Indebted Poor Countries are likely to miss this year to achieve the Millennium Development Goals”. After having cited “the difficult negotiations between the Greek Government and the Eurogroup” to demonstrate that highly developed countries are also subject to debt vulnerabilities he stressed: “In recent years, access to affordable health care and housing, security of tenure, right to work and social security have become as well a key concern in many European countries, including Ireland, Iceland, Latvia, Spain or Portugal”. In his speech, Mr. Bohoslavsky presented the results of his visit to Iceland (A/HRC/28/59/Add.1), his report on financial complicity (A/HRC/28/59) as well as his interim study on illicit financial flows (A/HRC/28/60). In accordance with the “constructive manner” in which he wishes to approach his mandate, M. Bohoslavsky underlined “good practices of how States can respond to a debt crisis in compliance with their human rights obligations”.

Visit to Island

The achievements of Iceland in managing the economic crunch of its banking system are quite remarkable. As noted by the independent expert: “The country responded to the crisis by sheltering vulnerable groups through expanding social protection spending, active labor market policies and a temporary expansion of entitlement to unemployment benefits. Instead of implementing front-loaded austerity measures, adjustment policies focused on increasing Government revenue through reintroduction of progressive income taxation.  Inequality was reduced. Several initiatives were introduced to help people unable to serve their own debt or at risk losing their homes”. Furthermore, it is worth mentioning that Iceland initiated “a comprehensive analysis of the causes of the banking collapse through the Special Investigation Commission established by Parliament”.

Financial Complicity

Mr. Bohoslavsky raised the following dilemma: “What should States, international financial institutions and private lenders do when they have to decide whether they should lend to a country in which human rights are systematically violated?” Dealing with this issue is certainly not an easy task but that should not justify the failure to act. According to Mr. Bohoslavsky “the Human Rights Council has not paid much attention to the links between financial support and systematic violations of human rights”. Yet the results of studies on “the causal linkages between lending and gross violations of human rights” are rather worrying: “Preliminary empirical evidence suggests that foreign financial assistance might prolong the life of regimes engaged in severe, large scale violations of human rights”.

Interim Study on Illicit Financial Flows

Illicit financial flows are a great obstacle to development and the rule of law. Further, “they exacerbate poverty and inequality, and undermine the enjoyment of human rights, in particular social and economic rights”. Mr. Bohoslavsky revealed alarming numbers: “developing countries lost US$ 991 billion in illicit financial outflows in 2012 and those flows increased in real terms at a rate of 9.4 per cent per annum over the period 2003–2012. The annual loss is substantially more than the estimated yearly costs of achieving the Millennium Development Goals”.

Juan Pablo Bohoslavsky concluded his statement by stressing “the need for due diligence and due process in the fight against illicit financial flows, for better protection of witnesses and whistle-blowers and for incorporating human rights considerations in the management of returned stolen assets”. His end recommendation was to anchor “the goal to reduce illicit financial flows in the context of good governance, the rule of law, justice and the duty of States to respect, protect and fulfil human rights”.

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