A/HRC/14/21
per week and rising every four weeks to a maximum of US$ 80,000 per week, for failing to
comply with the order.24
20.
The Democratic Republic of the Congo, which has a GDP of US$ 11.6 billion and a
Human Development Index ranking of 176, remains embroiled in a civil war.25
Approximately 79.5 per cent of its nearly 66 million population lives on less than US$ 2 per
day. Government expenditure on health is estimated at 7.2 per cent of GDP.26 With a debt
burden deemed unsustainable by the World Bank and IMF, the Democratic Republic of the
Congo cannot service its external debt obligations without harming its poverty-reduction
and economic development prospects. It is currently going through the HIPC process; the
court awards mentioned above threaten the country’s potential gains from international debt
relief efforts and its capacity to create the conditions for fulfilling its human rights
obligations.
Zambia27
21.
In 1979 Romania lent Zambia US$ 15 million, which the latter used to purchase
tractors and other agricultural machinery from the former. It appears that some of this
equipment arrived in an unusable condition. This situation was compounded by the fact that
European subsidies rendered it difficult for Zambia to compete in the global marketplace.
Unable to raise enough revenue from its exports to service the loan, Zambia defaulted.
22.
In early 1997 Debt Advisory International (which later incorporated Donegal
International to pursue the debt Zambia owed to Romania) started putting forward
proposals to acquire the Zambian debt from Romania. In an obvious attempt to persuade
Romania to accept its proposal to acquire the debt, Debt Advisory International sent a
memorandum to Romania in May in which it stated:
We understand that Zambia is currently not servicing its debt to Romania and has
not made any serious attempts to reschedule these claims in many years.
Furthermore, Zambia is not likely to resume servicing its obligations to Romania in
the near term. Zambia’s economic situation remains dire, and the country’s
unsustainable external debt burden makes it one of the countries likely to benefit
from the Heavily Indebted Poor Countries (HIPC) Initiative … Under the HIPC
initiative, Zambia will receive additional debt reduction from its bilateral creditors
… In particular, bilateral creditors may need to write off up to 90 per cent of their
Zambian claims and reschedule the remaining 10 per cent over 23 years or more. It
is the practice of the Paris Club to require African Governments to agree a minute to
the effect that they will not afford any other sovereign creditor better rescheduling
terms than they have afforded the Paris Club. Consequently, we believe that there is
very little chance that Romania can expect to obtain more in net present value terms
that we are presently offering.28
23.
In 1998, Romania agreed to sell the debt to Donegal International for US$ 3.2
million subject to the fulfilment of certain conditions by Donegal. The company failed to
meet one of these conditions, namely, meeting a deadline of 31 December 1998 for the
completion of the assignment. In December 1998, the two countries commenced
negotiations to liquidate the debt for US$ 3,281,780 and subsequently signed a
24
25
26
27
28
GE.10-13156
Available from www.atimes.com/atimes/Global_Economy/KG08Dj02.html.
Ibid.
UNDP, Human Development Report 2009, p. 145 and World Bank, World Development Indicators.
UNDP, Human Development Report 2009, pp. 178 and 201.
See Donegal International v. Zambia (see footnote 12).
Ibid., para. 75.
9
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