Jun 24, 2009

Resolved: It is just for highly indebted poor countries to repudiate their debt.

First in a series of previews of the potential LD resolutions for 2009-2010.

One of the potential LD resolutions for 2009-2010 offers a good balance of ethics, history, and international relations.
Resolved: It is just for highly indebted poor countries to repudiate their debt.
What counts as a "highly indebted poor country?"* As the World Bank explains, an HIPC must face an
...unsustainable debt situation after the full application of the traditional debt relief mechanisms (such as the application of Naples terms under the Paris Club agreement). A country's debt level is considered unsustainable if debt-to-export levels are above a fixed ratio of 150 percent; or, where countries have very open economies where the exclusive reliance on external indicators may not adequately reflect the fiscal burden of external debt the debt-to-government revenues are above of 250 percent [sic].
(The Paris Club's website offers an alternative summary and history of the program.) "Repudiating" debt means refusing to pay it off; in the larger sense, the term includes a wider connotation of a failure to recognize the rightness or truth of a situation.
3 a: to refuse to accept ; especially : to reject as unauthorized or as having no binding force b: to reject as untrue or unjust 4: to refuse to acknowledge or pay
Thus, the resolution requires the affirmative to argue that refusing to pay off one's international creditors is, in fact, just.

Why?

There are several larger strategies the affirmative could adopt. One could be to argue that the international monetary system, either because of present or past injustices, has made victims out of HIPCs, and uses debt as a weapon to conform developing nations to multinational, corporate desires. (Consider this the "international predatory lending" argument.) This route is explored on websites like Odious Debts, for example. Another general strategy could be to justify debt repudiation on pragmatic grounds: for the country concerned, it eliminates the primary barrier to development at a comparatively minor cost to creditors. From any individual nation's perspective, its social contract is with its own citizens, who would gladly shake off the burden. (On a further note, when freed of the debt, the country is more likely to engage in constructive commerce with its neighbors, leading to net gains on all sides.) Another interesting strategy might be to take a position inspired by the late great libertarian Murray Rothbard, who, in arguing for the U.S.'s repudiation of its own national debt, provides grounds for HIPCs to repudiate their own:
It is precisely the drying up of future public credit that constitutes one of the main arguments for repudiation, for it means beneficially drying up a major channel for the wasteful destruction of the savings of the public. What we want is abundant savings and investment in private enterprises, and a lean, austere, low-budget, minimal government. The people and the economy can only wax fat and prosperous when their government is starved and puny.
What arguments for repudiation are you considering? And what's an appropriate response for the Negative? Get your summer LD fix in the comments.




*Note that the official designation is "Heavily Indebted Poor Country."

37 comments:

Stephanie said...

I like your idea that debt repudiation leads to increased commerce with the global community. I'm just looking for a card that says that right now so if any has one and is willing to share, I'd be so grateful! I don't think there are any briefs out for this topic (it's camp topic) which makes writing cases so much harder...

Anonymous said...

Stephanie, are you writing cases before you go to VBI? (if that where you're going. I assume so because VBI is using this topic.) Do you know if most people write cases before getting there? I'm going there too.

I'm not looking forward to debating this topic in a couple weeks. It seems so boring...

Stephanie said...

@Anonymous, I wrote a rough draft of a rough draft of an AC. In other words, it was really terrible. In the email they sent us, it said that we don't have to write cases until we get there.

What session are you going to, and are you doing the third week? I am, and I have the sanctions topic also.

Anonymous said...

Stephanie or Anonymous-- are either of you going to the first session? I'm writing stuff for VBI but I don't think that it's required. Stephanie, I have an article that says that debt burdens stifle international lending; you could probably flip it around to prove the converse if you wanted me to email it to you.

Anonymous said...

Stephanie and other anonymous,
i'm going to VBI session one for 2 weeks.

since you guys both asked.

Stephanie said...

@FirstAnonymous, that would be beautiful thing if you could email it to me! I've had so much trouble finding good lit.

My email address is stephaniefang17@gmail.com or you can send it to me in a message on Facebook (under Stephanie Fang at Isidore Newman School). Whatever is easiest.

Also, I have this EuroDad article about why the benefits of debt repudiation outweighs the costs of it, if anyone wants that.

Anonymous said...

What does debt repudiation actually mean? I don't understand it. I know that it's when a country refuses to pay its debt, but how does it work? Does the country who lent the money need to give its consent? Who decides if a country can repudiate its debt? Is it like a formal act of getting rid of its debt, or just repeatedly delaying payments?

Jim Anderson said...

Anonymous, repudiation is a refusal to pay back creditors; it's a governmental decision. It doesn't "get rid" of the debt. The creditors can still try to extract payments, but will only succeed if they (or some overarching body) can coerce the government in some way.

It is possible that if a nation takes a unilateral position to repudiate its debt, its creditors will cancel that debt. It depends on the situation, the size of the debt, who owes whom, for how long, for what reasons, etc. For some different perspectives on debt repudiation (claiming Poland and Bolivia as successful examples), see here.

Anonymous said...

i'm scared for camp! VBI is soooooo intense, and roomates and everything!

estef said...

thanks jim!

and other anonymous,
me too! I'm a little scared but mostly excited! Yea I heard it's intense, but I'm gonna try to write cases before camp so I'm not too stressed during the first few days. 10 days left!

i'm the 1st anonymous, btw. just changing my name because this is getting confusing.

Stephanie said...

@Estef, I have two ACs--one of them is flawed, though. I'm working on my third AC. I have basically nothing for the NC. Which is hot good. Darn.

But yeah, I'm nervous too! I really, really hope I get a good lab but on paper, my record is not that impressive.

Stephanie said...

I meant "not good" not "hot good." Hahaha.

estef said...

Oh nice job! I haven't written any cases yet. I'm still researching...

Stephanie said...

@Estef, how many weeks are you staying again? And were you NLD or ALD this year?

estef said...

i'm going for 2 weeks.
and NLD, ALD, what?

Stephanie said...

NLD-novice Lincoln-Douglas
ALD-advanced Lincoln-Douglas

estef said...

Oh okay. My school doesn't use those terms. I just finished my novice year, so this school year i'll be JV.

You?

Anonymous said...

Stephanie,
i just emailed the article. I'll take the Eurodad one if it's not too much trouble: madzhu@gmail.com. thanks a ton!
3 ACs? wow. you're making me feel inferior. Where's Isidore Newman?

Liz23 said...

(i'm the first anonymous who said i'm nervous)

(I'm Liz)

I'm doing 2-wks 1st session, and I'm going into my second year of LD. what about you guys?

Paul said...

Jim

I don't really understand if our cases should be HIPC specific, like regarding HIPC relief policies, G7 compensation, IMF and all of that sort. Or would it be better to discuss simply the general idea of poor indebted countries not paying their debts? Is it better to be specific to the current policies or just the idea?

Anonymous said...

do you have any good references or articles about the international predatory lending

Anonymous said...

@liz, i've been to VBI and i'm returning this year. its not scary at all. and the only part thats even mildly intense is the lack of sleep. thats why yall should write cases before camp, otherwise youll be up late writing them at camp as opposed to just revising them.

Anonymous said...

@anom 2, everyone posting on this thread claiming to go to VBI is going to first session
second session debates the sept/oct topic which ccomes out during the camp

Anonymous said...

Hey everyone im going into my second year of ld and going to VBI, so if anyone has any useful articles or some cards, please send them to mihirtak@yahoo.com, if you are willing.

Jim Anderson said...

Paul, I'm replying now 'cause I just got back from vacation. Your case doesn't necessarily have to be "HIPC" program-specific; you can refer to larger principles of debt, obligation, contract, and the like. The phrase is a term of art, however, so you should at least prepare for arguments based on the HIPC situation as it stands.

paul said...

thanks

Anonymous said...

if your going for 2 weeks you really don't want you to write anything but rather just start reading articles ext..

If you are going 3 weeks then you should write cases for the sanctions topic because they don't spend much time on it.. the last week is a lot of skills classes and practice rounds...

-Zach... [too many anonymous lol]

Anonymous said...

I believe an interesting case would be how truly cruddy the people in these countries lifes must be. If the country is in debt that probably means high taxes and no healthcare... a case that explains that would make a good aff

Connor said...

hey im going to vbi for the second time and don't worry, it's a lot of fun. The resolution says highly indebted poor countries, rather than the organization the HPIC, which stands for heavily indebted poor countries. So it seems like cases that just deal with the HPIC would be unresolutional, but thats just a thought.
I have some evidence so if anyone would like to trade before camp, my email is connor123@mac.com

paul said...

zach, why would you not want to write cases before hand for 2 weeks? i'm pretty sure that most people arrive with cases

Anonymous said...

i don't write final cases or anything I would ever read in round. I just get do a lot of reading.... cut a few cards and I get an idea of what i want to do...

-zach

Kara said...

stephanie

do you have any good evidence on the international commerce arg?

Stephanie said...

Kara Ramsey?

Yeah, I have some decent stuff on that. It's not killer, but it's the best I've been able to find so far. Want to trade?

Connor said...

kara and stephanie lets trade

Stephanie said...

All right, Connor (and/or Kara)..hit me up on FB so we can pick and choose what we want.

estef said...

one more day!



and still no neg case....
yay.

liz said...

haha same