A/HRC/23/37 67. Concern over the perceived negative developmental impact of policies of international financial institutions has increasingly led to some States considering the creation of alternative international financial institutions such as the Bank of the South and the BRICS bank. The Independent Expert fully supports these efforts but urges the States concerned to ensure that the new institutions prioritize the achievement of sustainable human development. 68. Finally, in order to ensure that indebted poor countries are able to maximize benefits from debt relief, and to ensure debt sustainability as well as sustainable development outcomes, States must undertake efforts to enhance the coherence and consistency of, inter alia, trade, aid, debt, financial and monetary policies (see A/65/260, paras. 49-53).72 VI. Conclusions and recommendations 69. Although reducing the debt burdens of heavily indebted poor countries (on paper), the existing international debt relief initiatives have failed to address the underlying causes of unsustainable debt in low-income countries, including unfair global trade terms, narrow production and export bases, vulnerability to exogenous shocks (including drops in international finance) and irresponsible lending. Instead, the initiatives have focused on reducing debts to a level deemed “sustainable” by creditors, implying that the problem lies with imprudent debt management and poor governance on the part of the countries receiving debt relief. The dominant role of creditors in the initiatives is inconsistent with the principle of shared responsibility, while the conditionalities associated with them have undermined the sovereignty of debtor countries and, in some cases, the poverty-reduction goals of debt relief. 70. It is unlikely that in their current form, the international debt relief mechanisms can provide a lasting and just solution to the debt crisis. This underscores the urgent need to rethink existing mechanisms and to devise strategies that not only place human rights and the basic needs of people at the core, but also respect the sovereignty of indebted countries. The completion of the HIPC Initiative offers an opportunity for the international community to consider solutions that can help deliver an equitable and durable solution to the debt crisis, as well as assist in the establishment of truly equitable international economic order. In this regard, the Independent Expert makes the following recommendations: (a) States should uphold their commitment to share responsibility for preventing and resolving unsustainable debt situations; (b) States should commit to internationally agreed standards on responsible lending and borrowing which are binding on States and financial institutions (international and domestic) alike. In this regard, they should implement the Guiding Principles on Foreign Debt and Human Rights and support the adoption of the UNCTAD Draft Principles on Promoting Responsible Sovereign Lending and Borrowing; 72 20 The need for policy coherence among the trade, financial and monetary policies is widely recognized; see for example, The Sao Paulo Consensus, adopted at the eleventh session of the United Nations Conference on Trade and Development, São Paulo, Brazil, 13-18 June 2004, TD/412, part II, para. 17; Report of the International Conference on Financing for Development, Monterrey, Mexico, 18-22 March 2002 (United Nations publication, Sales No. E.02.II.A.7), chap. I, resolution 1, annex, para. 52; 2005 World Summit Outcome, General Assembly resolution 60/1.

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