A/HRC/28/59
control, international financial institutions are subject to the scrutiny of public opinion,
transnational groups, civil society and member States.40
51.
In contrast, while civil society is increasingly monitoring corporations, voters exert
less control over private lenders operating in international financial markets and States have
so far prohibited private lenders only in exceptional circumstances by legal regulation from
providing funds to States or State institutions with a bad human rights record. 41 Market
discipline alone provides insufficient incentives for lending that is sensitive to human
rights. It looks mainly at debt sustainability and the likelihood that the loan will be repaid,
not at the democratic character of a regime, nor its predisposition for human rights abuse.
The market does not prevent loans to dictators. On the contrary, once loans are provided to
autocratic regimes, the market rather provides incentives to grant additional funds to such a
regime, in order to stabilize it and ensure its repayment capacity. Market logic thus
becomes a self-fulfilling prophecy.
V. Next steps
52.
Lending to regimes that commit gross human rights violations may contribute
to regime consolidation, prolong disrespect for human rights and increase the
likelihood of gross violations of human rights. Those conclusions can stand for both
official and private financial assistance to Governments. Nevertheless, private lending
seems to be more damaging, as it might enjoy lower public accountability compared to
lending between States and to loans allocated by international financial institutions.
53.
The statistical analysis presented above, which is based on 158 different
episodes of authoritarian rule in 91 countries, suggests that net fund transfers may
prolong autocratic rule and thus increase the risk of gross violations of human rights.
However, each country situation must be assessed individually. The rational choice
model presented by the Independent Expert, suggesting the likely causalities and the
quantitative data presented, must be checked by case studies that serve to illustrate
the causal linkages between the financial aid received and gross violations of human
rights perpetrated by authoritarian regimes.
54.
According to the argumentation developed in the previous sections, unless
lending decisions are subjected to human rights impact assessments, appropriately
targeted or mitigated by contractual measures, financial lending can have a persistent
impact on authoritarian regimes, making it possible for them to consolidate autocratic
rule and perpetuate political exclusion and human rights violations, and reducing the
need for political concessions. However, it may sometimes be best not to lend on any
condition, as financial inflows could impair the human rights situation, either
immediately or over the longer term.
55.
States engaged in gross human rights violations not only torture and kill
people, but may also impose economic models that violate fundamental social,
economic and cultural rights. As Antonio Cassese explained in a paper he wrote in
40
41
16
James H. Lebovic and Erik Voeten in “The costs of shame: international organizations and foreign aid
in the punishing of human rights violators, Journal of Peace Research, vol. 46, No. 1 (January 2009),
found that multilateral development cooperation commitments showed greater sensitivity to criticism
of human rights records by the United Nations Commission on Human Rights compared to bilateral
commitments.
On how Latin American dictatorships received funds from private lenders see Robert Bejesky and
Juan Pablo Bohoslavsky, “Contemporary lessons from Carter’s incorporation of human rights into the
financing of Southern Cone dictatorships” in Making Sovereign Financing and Human Rights Work.
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