1. E D I N A C S O N G O R
THE DOCTRINE OF ODIOUS
DEBT

2. WHAT IS IT?
• Debt by a nation versus a regime
• Debt not serving the best interest of a nation should
be the personal debt of the regime

3. ORIGINS
• Alexander Nahun Sack (1927): The Effects of State
Transformations on their Public Debts and Other
Financial Obligations
• War debts, subjugated or imposed debts, and regime debts
• Other taxonomies & difficulties of defining the term
• Hostile debt? Profligate debt? Illegitimate debt?
• Two most classical types: War & Hostile debt

4. ORIGINS
“…if a despotic power incurs a debt not for the
needs or in the interest of the State, but to strengthen
its despotic regime, to repress its population that
fights against it, etc., this debt is odious for the
population of the State.”
“The debt is not an obligation for the nation; it is a
regime’s debt, a personal debt of the power that has
incurred it….”

5. VIENNA CONVETION
• “From the standpoint of the successor State, an odious
debt can be taken to mean a state debt contracted by
the predecessor State to serve purposes contrary to the
major interests of either the successor State or the
territory that is transferred to it.”
• “From the standpoint of the international community, an
odious debt could be taken to mean any debt
contracted for purposes that are not in conformity with
contemporary international law and, in particular, the
principles of international law embodied in the Charter
of the United Nations.”

6. NORMATIVE SOURCES
• Concept has been shaped by: sovereignty,
statehood, political justice, accountability, fair
dealing and equity
• Increasing importance: human rights
• Limitation: Pacta sunt servanda
• Loan contracts: international law obligations,
private law obligations or both?

7. NORMATIVE SOURCES
• Vienna Conventions on Succession of States: “clean
slate rule” and odious debt
• ICJ Article 38: “ the general principle of law of
civilized nations”
• (It is not always connected to State Succession)

8. APPLYING THE CONCEPT
• State versus government succession
• Creditor knowledge
• The fungibility of debt
• What about private creditors?
• Ex ante designation of debt

9. EXAMPLES
• Treaty of Versailles – Polish debt
• Germany – Austrian debt
• Apartheid debt
• Iraqi debt
• Does Greece has odious debt?

10. THANK YOU FOR LISTENING
Sources:
http://www.jubileeusa.org/truth-about-debt/dont-owe-wont-pay/the-concept-
of-odious-debt.html
http://unctad.org/en/Docs/osgdp20074_en.pdf
http://journal.probeinternational.org/odious-debts/
http://siteresources.worldbank.org/INTDEBTDEPT/Resources/468980-
1184253591417/OdiousDebtPaper.pdf
http://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=1443&context=lcp