Motes and Beams: The case for debt relief as if morals mattered
Source: Jubilee Research
In his book “Odious lending: debt relief as if morals matteredâ€, Stephen Mandel examined 13 cases of odious lending to gauge its real impact. Based on the principle that a successor government should not be worse off than if an odious loan had not been granted, the author included debt servicing and any loans subsequently taken out to manage the odious loans. The results were striking. In ten cases, the impact of odious debt was to render all outstanding debt odious. In effect, these countries are ‘overpaying’ their debt service, often to an enormous extent. Indonesia has paid US $151 billion related to its odious debt, more than twice as much as its total outstanding debt. Nicaragua, has odious debt of over five times its national income. This article (an edited version of one which appeared in the The Banker, November 2006) brings out some key points from the book.
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