Ideas to Action:

Independent research for global prosperity

CGD in the News

Create Loan Sanctions to Stop Private Creditors from Lending to Repressive Regimes (Politifact)

January 17, 2013
Share

Senior Fellow Kim Elliot and the CGD Prevention of Odious Debt working group is quoted in an article on loan sactions.

From the article:

"Barack Obama and Joe Biden will lead a multilateral effort to address the issue of 'odious debt' by investigating ways in which 'loan sanctions' might be employed to create disincentives for private creditors to lend money to repressive, authoritarian regimes."

Updates: White House has yet to implement new type of loan sanction

As they campaigned for office in 2008, Barack Obama and Joe Biden promised to lead an effort to look into a novel use of loan sanctions to help prevent "odious debt.”

But four years later, the tool has yet to emerge in cases where it might have been applied, such as against the Ivory Coast and Syria.

In 2009, a think tank that advocates for policies to reduce global poverty launched a working group, including Kremer and Jayachandran, to help develop the concept.

The Center for Global Development published a report, "Preventing Odious Obligations: A New Tool for Protecting Citizens from Illegitimate Regimes,” with funding from the Norwegian government, and reached out to the White House.

"There clearly was a lot of interest in this idea in parts of the administration,” said Kimberly Elliott, a senior fellow at CGD and part of the working group.

But in specific cases where CGD advocated the tool might be used, such as in the case of Syria, the administration opted "not to implement it,” she said.

Read it here.