A/HRC/4/10 page 10 because they result from irresponsible lending and borrowing. In this context, many non-governmental organizations (NGOs) have called for the creation of a fair and transparent arbitration process for this kind of debt and have proposed a neutral decision-making body that would be independent from immediate parties involved, and at which forum all stakeholders would have an equal right to be heard. Nevertheless, the independent expert is cognizant of the fact that such an independent arbitration system is bound to be confronted with major conceptual and operational problems, not least of which is the definition of clear criteria for the illegitimacy of debt acceptable to all creditors. 24. Such anticipated difficulties of reaching a generally agreed definition notwithstanding, the independent expert calls on all multilateral, bilateral and commercial creditors to address this problem on a voluntary basis and to regard it as a moral obligation to define appropriate transparent criteria for the illegitimacy of debt. Such debt should then be cancelled immediately and without preconditions. In this regard, the independent expert warmly welcomes and commends the example of Norway, that recently announced the cancellation of US$ 80 million in debt owed by five poor developing nations upon determining that the loans in question were not primarily granted to promote development but were instead the result of a campaign to bolster the country’s troubled shipbuilding industry by selling 156 vessels and shipping equipment to poor countries.11 25. A recent evaluation of HIPC initiative’s result shows that in most examined countries external debt sustainability indicators have deteriorated since 2003 and in several countries debt ratios once again exceed HIPC thresholds. Deteriorating debt management capacities are found to be one of the main factors leading to growing debt unsustainability. The study also shows that debt reduction alone is not a sufficient instrument to affect the multiple drivers of debt sustainability. Complementary measures in areas such as export diversification, fiscal management and debt management are crucial, as well as adequate terms of new loans.12 II. ECONOMIC REFORM POLICIES AND HUMAN RIGHTS 26. Since the late 1990s, the international financial institutions have replaced structural adjustment programmes by poverty reduction strategies based on country-owned PRSPs. According to IMF definition, PRSPs describe the macroeconomic, structural and social policies and programmes that a country will pursue over several years to promote broad-based growth and reduce poverty, as well as external financing needs and the associated sources of financing. PSRPs are prepared by Governments in low-income countries through a participatory process involving domestic stakeholders and external development partners. 27. Many observers argue that the PRSP approach has not diverged fundamentally from the earlier neoliberal principles of the Washington Consensus, except for slight variations in policy approaches.13 In fact, core reform policies usually pursued in PRSPs still include many structural adjustment elements and can be classified in two types: (a) quantitative measures with the objective to stabilize a country’s macroeconomic framework; and (b) structural measures that vary widely across programmes but usually include specific policies targeting economic and social sectors as well as questions of governance.