The Saif House

Saifedean Ammous' occasional blog

On Mubarak’s odious debts

Posted by saifedean on November 7, 2011

On October 6th I had a piece published with Project Syndicate on the debt legacy with which Mubarak has saddled the Egyptian people. I argue that the Egyptian government should announce it is not liable for Mubarak’s foreign debts, and that the person who should be made liable for them is Mubarak himself. The piece is freely accessible on Project Syndicate’s website.

The piece is also available in Arabic, Spanish, Russian, French, German, Italian, Czech, and Mandarin Chinese.

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One Response to “On Mubarak’s odious debts”

  1. Your proposal is interesting but probably not feasible given the status of the law relating to the odious debt doctrine and the recent finding of not guilty on corruption charges made by the courts in Egypt in the recent trial against Mubarak.

    As you are probably aware the odious debt doctrine has never been used in a court of law to relieve a nation from the obligation of international, public debt since the doctrine was defined by Alexander Sack in 1927 with the exception of the canceling of the debt owed by Costa Rica in 1923. I refer you to the article by Jai Damle entitled the Odious Debt Doctrine After Iraq available at http://scholarship.law.duke.edu/lcp/vol70/iss4/5/

    Interestingly enough, Damle points to a “gap” in application of the doctrine, stating that the doctrine is only available as a viable recourse to those countries with enough political influence in the world as to render them worthy of such treatment. Damle points to Iraq as being an example of this kind of preferred treatment.

    And with the finding of not guilty on corruption charges it is highly unlikely that Egypt could ever qualify for such treatment from those such as the Paris Club who are in a position to grant such relief. It is clear, then, that Egypt would need two things before the Odious Debt Doctrine would be available to them. First, they would need clear and unambiguous documentation of the improper use of public funds. And second, they would need to establish that they have international political influence of the type that the members of the Paris Club are interested in protecting.

    Currently, Egypt has indicted and convicted only those who have been granted “favours” such as tax breaks and under-priced land deals. These incidents are not of the type that would support a claim of Odious Debts because they do not represent the misuse of public moneys. By finding Mobarak not guilty of corruption it seems doubtful that Egypt could ever make this connection between its debts and the use or misuse of those funds.

    The second issue is more interesting still. Does Egypt have the type of political influence in the region that would warrant such treatment as a write-off of millions of dollars in debt? This question would seem to throw new light on Egypt’s relationship with Israel and the Camp David Accord.

    In any event it seems clear that Egypt’s newly elected regime is far from being able to take the “brave stand” you suggest.

    Please e-mail me with your comments; aleone@aucegypt.edu

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