The Impact of Economic Crisis and Foreign Debt on Human Rights

Transcription

1 GLOBAL CAMPUS OF HUMAN RIGHTS RESEARCH PROGRAMME Vahan Bournazian The Impact of Economic Crisis and Foreign Debt on Human Rights The Impact of Economic Crisis I. Introduction to Economic Crisis, and Foreign Debt on Human Rights Debt and the Impact on Human Rights

2 Introduction to Economic Crisis, Debt and the Impact on Human Rights Vahan Bournazian This body of work seeks to explore broadly the connections between economic crisis, debt and the impact on human rights while focusing on the issues of greatest relevance for distinct global regions. Uniquely situated for this project is Global Campus: the research arm of a global network of master s programmes in human rights and democratisation, all of which coordinated with the European Inter-University Centre (EUIC) and receive support from the EU Commission. Global Campus brought together researchers from different regions to focus on the main theme of economic crisis, debt and human rights while encouraging researchers to explore the topic through their regional perspectives. After conducting preliminary research, these researchers were invited, along with students from their corresponding master s programmes, to convene in Venice for a one week conference called Global Classroom. Also attending the Global Classroom were a number of United Nations and civil society experts who regularly practice in and research on issues related to the theme. Global Classroom allowed for the vetting of ideas and inspired researchers to revise their work before this final publication. Although the general theme applies globally, encouraging a regional perspective brought out unique interconnections. For instance, the Asian-Pacific team chose to focus on how economic crisis and debt impact specifically on labour rights, and then to explore the unique response from Asian labour movements, while the African research project assessed the impact of economic crisis and debt on human rights through the lens of human development, adding issues of governance and foreign aid to the assessment. Latin American researchers focused on the lessons learned from weathering past economic and debt crises while emphasizing the need to develop internationally sovereign debt relief mechanisms. Likewise, in addition to exploring the general theme, the European article also reviewed and questioned the propriety and legality of the frameworks which impose austerity measures in Europe, while the submission for South Eastern Europe (principally the Balkan Region) explored not only the unique socio-economic and political circumstances of the region but also how crisis can spark civic activism. Lastly, researchers for the Eastern Partnership (EaP) region explored economic crisis, debt and human rights in light of post-soviet transition and geopolitical factors unique to the EaP. Thus, each submission here addresses the general theme of economic crisis, debt and the impact on human rights but within a regional context. 1

3 At the same time, the researched presented here is unified by the underlying research questions: who are the principal actors engaged in this dynamic, what norms and processes govern, what evidence of impact is discernable, and what recommendations can be made? Through these questions, and taken as a whole, this work thus reinforces the core understanding that the interplay between economic crisis and sovereign debt impacts on human rights, directly and indirectly, and that economic crisis and debt are therefore valid topics for investigation from a human rights perspective. This concept is not new: the international obligation of states to guarantee socio-economic rights such as healthcare, welfare and education, as well as to guarantee civil and political rights such as fair trial, free elections and freedom from torture and ill treatment, are in many ways dependent on the sufficient allocation of state financial resources; but economic crisis, which leads to budgetary shortfalls, debt encumbrance of the state, and increasing poverty in society, as well as the ensuing costs of debt servicing or repayment, often reduce the amount of state resources available to protect and promote human rights. This has real and direct impact in both the short and long term. Moreover, as all rights are interconnected and interdependent, compromised socio-economic rights also have long term effect on civil and political rights, especially when viewed through a human development framework: deficiencies in public education, for example, may later handicap the participation of individuals in civil and political life, as well as inhibit such individuals from pursuing broader economic opportunities. Moreover, just as economic crisis and debt can compromise rights and development, the converse is also true: compromised rights compromises development, thus potentially impeding economic recovery as well as debt repayment. For instance, in his work Development as Freedom, Amartya Sen persuasively argued that true national development requires a holistic, rights-based approach designed to facilitate the development of individuals by securing for individuals freedom and choice principally the freedoms enshrined through human rights. 1 Expressed simply, a developed society is a collective of developed individuals. Also, individuals can develop themselves when basic needs are met, and basic opportunities motivate individuals and facilitate their free choice such that each individual maximizes their potential, and thus maximizes their contribution to society. A society s investment in, and development of, its human resources via human rights is thus the essence of national 1 See Generally, Sen, Amartya, Development as Freedom, Anchor Books: New York,

4 development. In Sen s work, categories of freedoms which foster the development of individuals, and thus of society, include civil and political rights (e.g. equality, civic discourse), economic facilities (e.g. employment opportunities, fair remuneration), social opportunities (e.g. education), transparency/accountability (e.g. rule of law), and protective securities (e.g. healthcare, social welfare). 2 A number of examples show how the expansion or contraction of one sphere of freedom impacts on the other spheres and on development as a whole as it relates to individuals and to society: e.g. corruption (compromised transparency and accountability) discourages individuals from investing either financially or personally in long term opportunities (like pursuing education); and compromised political rights excludes individuals from participation, resulting in individual apathy as well as socially harmful and self-interested decision-making by elites. Moreover, the nexus between rights and development as discussed in Sen s work is repeated in international discourse on these issues. In discussing the intersection of human rights and development, the UN Human Development Report of 2000 stated that: If human development focuses on the enhancement of the capabilities and freedoms that the members of a community enjoy, human rights represent the claims that individuals have on the conduct of individual and collective agents and on the design of social arrangements to facilitate or secure these capabilities and freedoms. 3 It is in this way that social development and individual rights influence each other. Also, in the context of poverty alleviation, the Committee on Economic, Social and Cultural Rights (CESCR) has stated that a rights-based approach to poverty is necessary because poverty is reflective of powerlessness, and thus necessitates protective measures based in equality and non-discrimination, guarantees for participation and accountability, and satisfaction of minimum core obligations of the society to the individual. 4 Such examples help reinforce that the elements of this dynamic of economic crisis, debt and human rights intersect, and therefore urge a more comprehensive interpretation of rights and freedoms, human development and economics and finance. 2 Sen, Amartya, Development as Freedom, Anchor Books: New York, Human Development Report, 2000, United Nations, p See Generally, Committee on Economic, Social and Cultural Rights Statement, SUBSTANTIVE ISSUES ARISING IN THE IMPLEMENTATION OF THE INTERNATIONAL COVENANT ON ECONOMIC, SOCIAL AND CULTURAL RIGHTS: POVERTY AND THE INTERNATIONAL COVENANT ON ECONOMIC, SOCIAL AND CULTURAL RIGHTS E/C.12/2001/10 10 May

5 Such assertions are not limited to theory. Articles 55 and 56 of the UN Charter obligate states to pursue both development and human rights, both domestically and internationally, and both jointly and separately, as a means of achieving peace and security. The core human rights treaties further define these state obligations by articulating specific individual rights. UN declarations and action plans, especially the Declaration on the Right to Development, further articulate how states are to pursue these relevant obligations. Moreover, these individual rights and corresponding obligations on states are all founded in fostering human dignity and equality through process-related values of transparency, accountability and participation. Thus, theory matches international obligation and law in all aspects. With regard to the interplay between economic crisis, debt and human rights, perhaps the best example of theory manifested in international state obligation is articulated in the Guiding Principles on Foreign Debt and Human Rights, 5 endorsed by the Human Rights Council after a broad consultative process. 6 As evidence that foreign debt constrains development and undermines human rights guarantees, the Guiding Principles note that while fulfilling debt obligations the Heavily Indebted Poor Countries (HIPC) were unable to invest in protecting and promoting human rights, but that once debt was forgiven, allowing for state investment in public services and human rights, such investment spurred national development. The Guiding Principles also notes that the current system of foreign debt is not achieving purported development goals, and that, based on a general UN commitment to development and Articles 55 and 56 of the Charter, both debtor and creditor states are obligated to promote development, which can be achieved by implementing the standards and measures outlined in the Guiding Principles. Such standards and measures include, in part, human rights impact assessments relative to debt acquisition before lending, prohibition on retrogressive measures relating to the protection and promotion of human rights due to debt obligations, guarantees that debt is acquired only for legitimate projects with defendable development goals and by legitimate authorities, due diligence and full disclosure on proposed loans and participation by stakeholders in the process, oversight by representative bodies and civil society, and holding private lenders accountable to the same standards through domestic law of resident states. Thus, the purpose of the Guiding Principles is to ensure that compliance with the financial commitments derived from foreign debt often incurred in response to economic crisis (A/HRC/20/23) 4

6 will not undermine the obligations to realize fundamental human rights, as provided for in the international human rights instruments. Most recently, in March, 2014 and in response to a Human Rights Council request, the Independent Expert on the effects of foreign debt submitted Draft Commentary to the Guiding Principles which should aid in application of these guidelines. 7 So it was in this context that researchers pursued their work, and to differing degrees, each article presents evidence of the impact on human rights of economic crisis and debt, as well as unique regional circumstances that exacerbate the dynamic. As it relates to the Eastern Partnership, for instance, the recent global crisis contracted state economies such that poverty indicators rose, or state spending to offset poverty rose, or both. Most often this was accompanied by increases in sovereign debt to fund increased budget expenditures and/or make up for decreased budget revenues. Increased poverty, as well as budget cutting measures undertaken later on to free up funds for debt servicing, negatively impacted on, and continue to negatively impact on, human rights. At the same time, Eastern Partnership countries share problems of corruption and regional conflict, all of which exacerbates sovereign debt problems and undermines human rights guarantees further. Likewise, impact as a general theme, but of distinct character within each regional context, can be discerned in each article presented here. The African research, for example, also found correlations between the global crisis, contracting economies, and increases in poverty and sovereign debt; by tracing the effects through the Millennium Challenge indicators, the research shows the negative impact on human development, and through human development, on human rights. At the same time, additional questions of governance and reductions in international foreign aid are highlighted as unique issues for how the general dynamic unfolds in Africa. In the case of South Eastern Europe the transition itself comprised of dictated structural reforms and unworkable framework compromises (e.g. the Bosnia-Herzegovina Constitution itself) along with armed conflict in the region are perceived as the root causes undermining human rights today, exacerbated by the issues of economics and debt. Meanwhile in Europe, while the global economic and debt crisis had its negative impact on human rights, the research shows that the austerity measures themselves aggravate the negative impact, and 7 (A/HRC/25/51)( _51_AUV.doc 5

7 the legality of austerity mechanisms are brought into question. In the Asian context, the world economy and global consumption impact on profit margins in the world s factory, and labour is where companies seek to cut costs; thus, the Asian research explores a fluid detente between business, government and labour, which balances rights and profits, and the article discovers innovative responses from labour movements connect to the emerging idea of consumer advocacy. Finally, the Latin American research explores what can be learned from past crises and considering international structures today, what more can be done to develop debt relief mechanisms internationally to better protect human development and human rights. It is in these ways that each article supports the premise outlined in this introduction while also offering a unique perspective into the region in question. The reader is free to explore the issue comprehensively, and in regional context. It is hoped that this research may serve as a foundation for further developments in, and further exploration of, economic crisis, debt and the impact on human rights in the future. 6