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Blogs, Macroeconomic policies

Making sovereign financing and human rights work

“Making Sovereign Financing and Human Rights Work” is the title of a book recently published by Hart Publishing, Oxford (an Imprint of Bloomsbury Publishing) and that I co-edited together with Juan Pablo Bohoslavsky. Our initial interest in this topic was sparked by the daily hardship of millions who indirectly suffer due to the realities of current global financial environments. After we started our research for this book project several years ago, we were surprised to find out that apart from some isolated academic articles almost nothing had been written on the issue of how sovereign financing affect the individual’s enjoyment of human rights. However, we have not only been interested in this relationship, but mostly in how to make sovereign financing and human rights work.

The book therefore employs an interdisciplinary approach and offers a unique and comprehensive understanding, explanation and analysis of the interplay between sovereign financing and human rights, two fields that have often been on opposite and separate sides of the debates and even disputes in global finance. Sovereign financing has been often described as state or non-state actors lending financial resources to a sovereign state, an approach in which rights of ordinary people have been typically forgotten. States and their elites have often managed those public resources poorly, at times with the purpose of maintaining authoritarian and totalitarian regimes which have systematically violated not only socioeconomic rights but also civil and political rights. Such state practice has highlighted the gap on interdisciplinary research on sovereign financing and human rights. Several states spend large proportions of their annual revenue repaying sovereign debt. In this way debt repayments undermine the financial ability of a country to fully ensure even the reasonable minimum core of economic and social rights of its population, thereby throwing millions of people into poverty.

Unsurprisingly, states in this situation have not been able to provide even basic social security, education, health, food, housing and water services to their populations. To the extent a state is obliged to repay its sovereign debt, which was spent at the discretion of authoritarian elites, to states, international organizations, and private corporations, it will be less financially capable of providing the reasonable minimum core of economic and social rights. This is confirmed by the examples of current and former totalitarian regimes, whose governments often take out vast financial amounts of loans to finance their military activities, exuberant lifestyles of officials and/or imposed economic policies, against the majority’s interests.

What is more, the diminishing role of the state and rising influence of other global actors such as financial corporations have taken over dominant positions in the global financial markets and have acquired large proportion of sovereign debt in the secondary markets. In this context, the United Nations Human Rights Council recently condemned “the activities of vulture funds for the direct negative effect that the debt repayment to those funds, under predatory conditions, has on the capacity of Governments to fulfil their human rights obligations, particularly economic, social and cultural rights and the right to development” (Section 1). Along this same vein, in the context of negotiations on a resolution on debt restructuring recently approved by the General Assembly, the relevance of the international human rights obligations in sovereign financing was highlighted.

Human rights experts on one side and financial markets experts on the other have usually encountered difficulties in grasping the full complexities of the opposite fields and their causal relationship. The book therefore rests on two main arguments. First, it argues that rights of human beings should be taken into consideration in the context of sovereign financing. Second, it proposes a move from a top-down to a bottom up approach in order to achieve the incorporation of human rights into financing and, reciprocally, integration of sovereign financing challenges into the human rights field.

The book includes 21 chapters written by respected young and senior experts from a wide variety of fields (economic, finance, law, political science). It is divided into four parts. Part I examines how debt affects gross violations of political and civil rights, whereas part II analyses the effect of debt crises on socioeconomic rights. Part III is dedicated to specific financial actors and instruments, and novel approaches. Finally, part IV examines the relationship between sovereign financing and human rights in selected case studies.

The book offers a comprehensive and in-depth introduction to the subject of sovereign financing and human rights. As such it has been long awaited by scholars and practitioners. The contributors of this book have invested a lot of time, research, practical experience, time and patience in its preparation. In this way, the book is undoubtedly a step forward and an ambitious  input in the area of sovereign financing and human rights. However, as recent global developments illustrate the research in this area is far from exhausted and much more effort must be made to achieve the book’s objective of “putting human beings first.” All in all, states, international organisations and private actors are obliged to uphold individual’s civil and political and socio-economic rights in the sovereign financing context.

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Jernej Letnar Černič is Assistant Professor of Human Rights Law, Graduate School of Government and European Studies, Brdo pri Kranju, Slovenia. The book he and Juan Pablo Bohoslavsky edited, Making Sovereign Financing and Human Rights Work, is available from Hart Publishing, Oxford.

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March 2017
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