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World Bank draft discussion paper on odious debt: a call for a full, independent peer review

16 October 2007

To:

Acting Director Economic Policy and Debt Department

World Bank

Washington DC

CC:

Minister of Development Mr Erik Solheim, Norwegian Ministry of Foreign Affairs

World Bank Executive Directors

World Bank senior management

Dear Dana Weist,

Re. World Bank draft discussion Paper on Odious Debt: a call for a full, independent peer review

We are writing in response to publication of the World Bank’s discussion paper: “The Concept of Odious Debt: Some Considerations”, published on 7 September 2007. The Bank has formally requested inputs from interested parties since the paper represents a work in progress by the institution. We welcome the fact that the Bank has taken-up the important issue of odious debt following pressure from civil society organisations and financing from the Norwegian Government.

However both the paper itself and the process for producing and reviewing it are far below what is needed. The draft paper is missing significant sources and arguments, and is one-sided.

We propose that the Bank spells out clearly what it intends to do with the document and the status of the final output, and that it institutes a well-organised peer review process involving external experts. The Bank should actively solicit expert feedback from a range of external specialists in the fields of law, economics, and political science. These specialists should be invited not only to provide written responses but should also be invited to an expert round-table discussion to debate the substance of the paper with yourself and other relevant Bank analysts.

Such a process is the best way to resolve the significant shortcomings and omissions in the current draft and to prevent the exercise missing the opportunity to make a significant contribution to improving the international debt architecture.

The paper is largely dismissive of the concept of odious debt. It emphasizes that the concept is complex, given an over-wide scope by some analysts and not yet established in international law. The paper omits important cases where the concept has been recognised and also several political and judicial processes and concepts such as authority to borrow which are cited in many writings on the subject.

There is no mention of the need for fair and transparent debt resolution processes, which would enable independent judgements to be made regarding the cancellation of odious debts.

These are just some examples of many significant gaps in the paper. We do not have confidence in the current process that the Bank has initiated and believe that a formal external peer review process is the only way that the paper can be taken forward properly. We would be happy to provide suggestions of names of potential reviewers once this idea is accepted.

We trust that our proposal will receive all due consideration and very much look forward to hearing from you.

Yours Sincerely,

European Network on Debt and Development (EURODAD)

Action Finanzplatz Schweiz (AFP)

Jubilee South Asia Pacific Movement on Debt and Development

Latin American Network on Debt and Development (LATINDAD)

Norwegian Coalition for Cancellation of Third World Debt (SLUG)

African Network and Forum on Debt and Development (AFRODAD)

Jubilee Debt Campaign UK (JDC)

Norwegian Church Aid (NCA)

Instituto del Tercer Mundo (IteM)

Observatorio De la Deuda (ODG)