The Paris Club: a red card for foul and unfair play

Added 28 Mar 2007

One day at the Club : crashing the party….

The event organized by the French Treasury on June 14th 2006 to celebrate the 50th anniversary of Paris Club activity was a welcome occasion for civil society to demonstrate their critical stance toward this “non-institution”. A joint statement and stunts inside and out on a football theme were used to get civil society messages across. The conference was used as a launchpad for the NGO political statement that was distributed during the proceedings, and having the opportunity to intervene during the panel on debt sustainability - see speech below by Eurodad’s Francesco Oddone. Campaigners also staged an “unequal World Cup” outside the venue to depict the Club’s unfair approach to debt work-outs. 19 players, each sporting a t-shirt with the name of one of the Paris Club members, competed with one debtor country, Kenya (photos by Julien Chatelin: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10). Kenya was chosen as the perfect example because it owes about US$2 billion to Paris Club creditors, but has only had a small part of this rescheduled, let alone cancelled. Other equally poor and even some richer severly indebted middle-income countries have however managed to secure significant debt cancellations out of the Club. Meanwhile Kenya continues to experience devastating health and education problems – life expectancy has fallen from 57 years in 1986 to 48 in 2004. Kenya spends 40 per cent of its annual budget servicing its US$7 billion debts. During the event, Eurodad’s Oddone commented that on one side of the ‘pitch’ you have those 19 who write the rules, change them when it suits them, unilaterally decide what type of treatment to “concede”, and act themselves as the referee! This setup simply cannot be described as legitimate, and requires an urgent overhaul following just and fair rules. Otherwise, said Oddone, history will show the Paris Club the “red card”. NGO representatives at the event then held up red cards in a show of disapproval at the current set-up. The conference itself was, unfortunately, a very self-congratulatory exercise performed overwhelmingly by “very important officials” from creditor governments, the international financial institutions and private sector patting themselves, and each other, on the back for the good work and flexibility demonstrated by the Paris Club over the past 50 years.

Eurodad’s Gail Hurley remarked that this represented a “missed opportunity”. “It is unfortunate that the Paris Club decided to select panelists who were overwhelmingly from the North and who were just going to repeat each other and signal their support for what the previous speaker had just said. It is regrettable, but of course revealing, that so few Southern voices were prominent on the panels given that the impact of Paris Club decisions is felt in the South”, she said. Moreover, only one woman was a panelist. Nigerian finance minister Ngozi Okonjo Iweala spoke from the platform giving a memorable speech in which she first diplomatically cajoled creditors, and then hit them hard on the weak spot of their “unsustainable” concept of debt sustainability. Her intervention was refreshing in an otherwise very male (and very gray) podium. Unfortunately, precious little space was left for authentic, open and frank debate with the audience, and the most embarrassing questions were put forward by civil society representatives, most notably on the issue of odious and illegitimate debt. Jean Merckaert of Plateforme Dette et Développement and Damien Millet of CADTM both raised this issue but these questions were left hanging without the slightest reference or even response from panelists or chair. Eurodad would urge Paris Club creditors to clarify their positions on this critical issue rather than try to sweep the issue under the carpet. NGOs will continue to keep pushing on this issue and make it very difficult for creditors not to face these fundamental questions. In addition, we would welcome further clarification of the issues raised by Nigerian finance minister, most notably whether Paris Club creditors will indeed adopt a concept of debt sustainability which puts human needs and human development at the fore.