A/HRC/23/37 and fulfil their human rights obligations. In this regard, the Independent Expert urges all States to fully adhere to the Guiding Principles on Foreign Debt and Human Rights adopted by the Human Rights Council in June 2012 (A/HRC/20/23, annex), and to support the adoption of the UNCTAD Consolidated Principles on Promoting Responsible Sovereign Lending and Borrowing.62 B. Establishing an impartial international debt workout mechanism 59. Over the years, numerous proposals for the establishment of an international sovereign debt workout mechanism have been made. Some of these proposals have drawn inspiration from the United States bankruptcy regime which provides protection for insolvent government authorities such as States and municipalities to keep them functional while enabling them to avoid sacrificing any of their basic public service provision functions in order to pay off debts.63 60. The Independent Expert fully supports the establishment of a permanent, independent international sovereign debt workout mechanism under the auspices of a neutral, non-lending institution with sufficient global legitimacy – the United Nations. In his estimation, such a mechanism – based on the principles of equity, transparency, inclusion and participation – can help resolve sovereign debt payment difficulties and disputes fairly and efficiently. As opposed to existing debt workout mechanisms, such a body should prioritize States’ obligations to meet the basic needs of their populations in line with their international human rights obligations and national development agendas.64 By focusing on basic needs, the mechanism can serve to ensure that debt does not pose a structural obstacle to development. An independent debt workout mechanism would also discipline imprudence on the part of both lenders and borrowers.65 61. It should be recognized, however, that an international debt workout mechanism alone would not address the problem of indebtedness and impoverishment of poor countries nor inequity in the global economy. Nevertheless, it would bring accountability to the global financial system and limit the ability of international financial institutions to continue to force poor countries to implement policies which are not necessarily in line with their national development priorities.66 More importantly, such a mechanism would address a critical gap in the international financial system. C. Prioritizing domestic resource mobilization 62. Many poor countries are chronically dependent on external finance (including loans and investment). A key reason for this is the continued loss of finance through illicit flows.67 It is estimated that in 2010, developing countries lost between $783 billion and 62 63 64 65 66 67 18 Amended and Restated as of 10 January 2012. See for example, Kunibert Raffer, “Internationalizing United States municipal insolvency: a fair, equitable and efficient way to overcome a debt overhang,” Chicago Journal of International Law, vol. 6, No. 1 (2005), p. 363; C.G. Paulus and S.T. Kargman, “Reforming the process of sovereign debt restructuring: a proposal for a sovereign debt tribunal,” Paper presented at the workshop on Debt, finance and emerging issues in international financial integration, Financing for Development Office, Department of Economic and Social Affairs, 8 and 9 April 2008. See the Guiding Principles on Foreign Debt and Human Rights (A/HRC/20/23, annex), paras. 84-85. Jubilee Australia, Alternatives to debtors prison (see footnote 59), p. 27. Ibid., p. 29. According to EURODAD, these outflows have been facilitated by financial liberalization by developing countries under the advice or coercion of the international financial institutions: see