The President of the World Bank, David Malpass, has called for the UK and US to make it harder for creditors to sue the poorest countries.
Earlier in the year Dr Stephen Connelly, Dr Celine Tan, Karina Patricio* and Chris Tassis – in tandem with Jubilee Debt Campaign and Oxfam - proposed just such a legal reform for the UK.
They comment: "We welcome the President of the World Bank’s call for the UK and the US to make it harder for rich commercial lenders to sue poor countries for not making debt payments. G20 nations have voluntarily suspended the obligations of the poorest countries to repay so that funds can be used to fight Covid19, but if commercial lenders insist on being paid at this time then they are diverting much needs money away from public health and towards their balance sheets. That’s why we members of GLOBE – Dr Stephen Connelly, Dr Celine Tan, Karina Patricio* and Chris Tassis – in tandem with Jubilee Debt Campaign and Oxfam, proposed targeted legislation in the UK which allowed the poorest counties to seek a moratorium on debt service.
"The aim of this proposal is to complement the G20’s Debt Service Suspension Initiative (DSSI) by granting a statutory standstill on recovery of English law-governed debt owed to private creditors by DSSI-eligible countries. The proposal covers 90% of bonds contracted by these countries. It grants a designated country a moratorium on legal proceedings (including enforcement) where those proceedings concern a qualifying debt owed by that country.
"We call on the UK Government to reconsider this legislative proposal, and so send a clear message that English law cannot be used to undermine the UK’s own foreign policy commitment to the DSSI."
8 October 2020
*Visiting Researcher Warwick