Current economic policies and financing instruments have direct effects on governments’ ability to fulfil their human rights obligations, and in most cases are incompatible with the fundamental principles of human dignity and sustainable development.
Following the Fourth Conference on Financing for Development (FfD4), and in the course of a new jubilee year, it is essential to discuss how to ensure compliance with international and regional human rights agreements and treaties in the global economic and financial system, as well as to radically change the centrality of capital yields over life and the full realisation of fundamental human rights.
The international community debt with human rights and women
Attiya Waris, UN Independent Expert on Foreign Debt, Other International Financial Obligations and Human Rights, opened the panel by sharing an assessment of FpD4 from a rights perspective, as well as the main challenges and opportunities for the immediate future.
Regarding the results of the FpD4, she highlighted two missing issues, namely the absence of human rights during the negotiations and, with that, a conversation and inclusion of women’s rights specifically. This continues to be a challenge in financial spaces, for example, when discussing why debt is contracted, what taxes are collected for, or issues of monetary and exchange rate stability; the ultimate goal must be an economy that serves the people. On the other hand, she emphasised that conversations about peace were also absent.
Continuing within the framework of FpD4, she pointed to three advances. The first was the possibility of setting up a debtors’ club similar to the Paris Club, so that indebted countries could engage in dialogue with each other. Second, she referred to the agreement on initiating an intergovernmental process at the UN to address, among other issues, a debt resolution mechanism, although she regretted that such progress does not consider debt cancellation. Third, she highlighted the panel of experts on financing and Sustainable Development Goals formed by the UN General Secretariat, which will likely boost further discussions on these issues.
With regard to opportunities at the regional level, she emphasised the alternatives to SWIFT, such as the initiative developed in Asia to elude the US system in transactions between countries, with similar efforts in Africa for trade. This opens up the conversation on how to rebalance power and reduce transaction costs.
Finally, Attiya Waris urged not to turn away from demands for debt cancellation in this jubilee year.
Understanding how and why debt in Latin America is paid with human rights
Francisco Cantamutto, associate researcher at IIESS UNS-CONICET and consultant at LATINDADD, presented our recent report on debt and human rights in Latin America, of which he is the author. He explained that the relationship between debt and human rights spans multiple levels, addressing two of them from a logical point of view. The first aspect, directly related to the State of Law, occurs when a loan is contracted and is divided into two dimensions: on the one hand, it is necessary to know whether countries followed the steps to make that debt legal and, on the other hand, to have information on the use of debt resources. If the debt was used for wasteful spending, those who benefited should be held accountable, including private actors.
The second logical moment occurs in debt repayment, where links to rights also appear and two other dimensions come into play. The first relates to the fact that debt repayment displaces other possible uses of fiscal space. In Latin America, the amount of resources allocated to debt repayment has doubled compared to the previous decade, reducing the amount allocated to guaranteeing human rights (such as health, education and social protection, among others). The second dimension is linked to how the country’s productive specialisation is oriented towards meeting the needs of debt repayment. In the region, there is a bias towards a specialisation that does not meet the needs of the population and is based either on reducing labour costs by violating basic labour rights or on the overexploitation of natural resources, violating the right to live in a healthy environment. Taken together, the right to participate in the effects of development is violated.
Latin America is the region with the highest proportion of private creditors in its public debt composition (around 70%). The author highlighted that there are no mechanisms for dispute resolution with private creditors and that the actions of official institutions over the last decade have been to increase the debt in countries to guarantee payment to private creditors, resulting in a shift in creditors rather than debt relief. As a result, countries are increasingly subject to the mandates of international institutions, particularly the IMF, to orient their economies towards debt repayment rather than the protection of the human rights of their populations.
Neocolonialism in financial architecture: a view from Asia and the Pacific
Misun Woo, Regional Coordinator at the Asia Pacific Forum on Women, Law and Development (APWLD), broadened the perspective beyond the direct link between debt and rights. She emphasised that colonial practices continue and that the current financial architecture is fundamentally incompatible with human rights, especially for people in the Global South. It is designed for and sustained by the extraction of labour and resources from the Global South to channel power and wealth to the Global North.
She explains that the similarity of stories about rights violations in the context of debt is not a coincidence, as the IMF and other financial institutions act with a formula that cuts across countries and generations. This formula includes aggressive privatisation of social services and state-owned enterprises, deregulation that perpetuates labour rights violations and environmental crises, trade and financial liberalisation, and regressive taxation policies. Thus, the IMF and other creditors disguise their political motivation of neocolonial domination, often in the name of economic advice or policy recommendations that undermine the sovereignty of nations while subjugating the Global South to be integrated into the so-called global value chain.
On a separate note, it is important to consider where the Global North directs its finances: military spending to fund wars and conflicts as a mechanism to generate profits, wealth, and power. While defence and security investment commitments are prioritised, the commitment to official development assistance (ODA) of 0.7% of GNI remains very difficult to achieve, not to mention debt relief.
Perspectivas desde el continente africano para una nueva arquitectura de la deuda
Memory Kachambwa, Executive Director of the African Women’s Development and Communication Network (FEMNET), pointed out that the international community failed to recognise the causes that led us to this point of crisis and explained that countries on the African continent need substantial financial resources to support their development agendas, especially when they face challenges in their ability to generate domestic revenue.
Africa’s debt has increased by 180% since 2010 and, due to the composition of its creditors, refinancing or restructuring is more difficult and complex. In addition, loans are structured with short-term maturities, high interest rates, and investments are not directed towards development projects. One of the biggest problems is debt servicing, which accounts for an increasing proportion of the budget. This cost is being disproportionately borne by women.
Although there are various concerns, mainly related to the role given to the private sector in most responses to crises, she considers that there is room for progress in some areas and highlights five of them. Firstly, she points out that progress can be made towards a binding, transparent and rights-based legal framework through the establishment of a UN Framework Convention on Sovereign Debt, including debt cancellation and restructuring, with a focus on human dignity, justice and equity. Secondly, she raises the point of the debtors’ club. The third point addresses the review of debt sustainability analyses beyond narrow fiscal indicators and the possibility of incorporating human rights, social protection, gender equality and climate justice. Fourth, highlights that the FpD4 addresses the guarantee of social protection and the elimination of austerity-based responses to debt crises. Finally, she emphasises the regulation of abusive lending practices through the mandate of transparency in debt contracts, pricing models and risk assessment, as well as the elimination of unjustified risk premiums.
She concludes by asserting that there is a huge component surrounding false solutions that come in the form of debt as a response to the climate crisis, an urgent challenge for Southern nations.
In sum, debt and the burden of its repayment have a direct impact on perpetuating cycles of poverty and economic dependence, as well as on undermining efforts to guarantee human rights. This is a common situation in Global South regions that continue to face neocolonial and extractive practices. It is crucial to promote systemic change by prioritising full compliance with human rights in the economic and financial system. In this regard, as Memory Kachambwa stressed, it will be important to promote feminist alternatives based on care, justice and sustainability.
