A/HRC/43/45 I. Introduction 1. As stated by the Human Rights Council in its resolution 40/08, the issue of foreign debt, both public and private, is closely linked with increasing inequality worldwide and with the obstacles to sustainable human development resulting from the debt burden, including in achieving the 2030 Agenda for Sustainable Development through adequate financing. In this sense, the General Assembly has already warned, in its resolution 71/215, of rising private and public indebtedness in many developing countries, and stressed the need for continuing efforts to address systemic fragilities and imbalances and to reform and strengthen the international financial system. 2. The mounting levels of private debt are largely made out of corporate debt, and to some extent of household debt, loans and debt securities, 1 with deep and direct implications for global economic and financial systems and for the ability of States to comply with their human rights obligations. According to the United Nations Conference for Trade and Development (UNCTAD), at the end of 2017, global debt stocks amounted to $213 trillion – or 262 per cent of global GDP; a considerable increase in comparison to 2008 (240 per cent) and 1980 (140 per cent). Accounting for more than two thirds of the global debt in 2017, the accumulation of private debt stock largely contributed to overall debt surge, 2 with private indebtedness in foreign-denominated being a common denominator. 3. As the Independent Expert on the effects of foreign debt and other related international financial obligations of States on the full enjoyment of human rights, particularly economic, social and cultural rights discusses below, the above-mentioned trends show a fundamental shift of States’ human rights obligations to guarantee access, availability, affordability and quality for the realization of these rights to the power of unregulated markets. 3 4. The purpose of the present report, which was prepared also on the basis of submissions by States, civil society organizations, scholars and other stakeholders in response to the Independent Expert’s call for contributions4 is to assist in understanding - and also to unravel, denounce and offer recommendations to tackle – human rights violations in the context of private debt, focusing specifically on individual and household debt. Under the umbrella of “individual and household debt”, many forms of private debts can be considered, as can various types of creditors and debtors. Some of these might even refer to small family businesses borrowing through formal and informal channels. The most direct and egregious violations of human rights suffered by private borrowers are committed in the context of individual and household debts, particularly in the case of persons and households living in poverty or marginalized, or those who are forced into a “debt trap”. Corporate debt will only be considered at an aggregated level to offer perspective of its weight in the global economy. However, private corporate debt can also have – together with household debt – deep implications for the economy, and therefore for human rights, as explained below. 5. Household debt is not a problem per se. The ability to borrow within the limits of one’s own financial capacity may improve people’s living standards, allowing access to services that would otherwise be out of reach; and it may play a role in activating and supporting the economy. Household or individual debt may, at times, also facilitate social mobility or integration, and it can be a determinant factor in ensuring social inclusion. However, over-indebtedness (understood for the purposes of the present report as a debt the repayment – and cost associated – of which would entail the deprivation of resources needed 1 2 3 4 See United Nations Conference for Trade and Development (UNCTAD), Trade and Development Report 2019, pp.74 – 75. Ibid, p. 76. Maurizio Lazzarato, Governing by debt, Semiotext(e), 2015; Susanne Soederberg, Debtfare State and the Poverty Industry: Money, Discipline and Surplus Population (Routledge, 2014). See www.ohchr.org/EN/Issues/Development/IEDebt/Pages/ReportPrivateDebt.aspx. The report was also informed by extensive consultations and discussions held with experts in Princeton, Nairobi, Buenos Aires and Geneva from October to December 2019). The Independent Expert thanks all experts and stakeholders, in particular Friedrich Ebert Stiftung and Open Society Foundation, as well as OHCHR staff, who provided him with valuable inputs. 3