Odious Debts

The single most important shackle on the Third World is the debts "owed" to the richer countries - amounting now to over $1.4 trillion. The original loans were mostly put to uses of very dubious benefit to the countries concerned, and the repayments, which despite the hand-wringing and concern the North is insisting on, are stripping those countries of their assets and impoverishing their people and environments. This book gives an exceptionally compelling account of how this catastrophe came about and of its consequences. It analyses the parts played by the different participants - among the lenders, the World Bank, the IMF and other multi-lateral agencies, as well as the export credit agencies and commercial banks; and among the borrowers, not only governments and state enterprises, but also the military and above all greedy and despotic leaders. The story is one of recklessness and corruption. In the face of it, Patricia Adams invokes the doctrine of "odious debts" - those debts contracted by a regime that are not binding for a nation - first used by the US to repudiate Cuba's debts after taking it from Spain, but neglected since.
Together with changes in the international financial structure to discourage governments from raising money by borrowing rather than from taxes, this doctrine offers a way of both resolving the crisis justly and furthering democracy and accountability in the Third World. Patricia Adams is also the author of "In the Name of Progress: the Underside of Foreign Aid".