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."