Resolution on Sovereign Debt Restructuring Adopted by General Assembly Establishes Multilateral Framework for Countries to Emerge from Financial Commitments

GA/11542
9 September 2014

Resolution on Sovereign Debt Restructuring Adopted by General Assembly Establishes Multilateral Framework for Countries to Emerge from Financial Commitments

9 September 2014
General Assembly
GA/11542
Department of Public Information • News and Media Division • New York

Sixty-eighth General Assembly

Plenary

107th Meeting (PM)


Resolution on Sovereign Debt Restructuring Adopted by General Assembly Establishes


Multilateral Framework for Countries to Emerge from Financial Commitments

 


Texts on International Decade for People of African Descent,

International Criminal Court, United Nations Administration Also Passed


The General Assembly adopted four resolutions today, including one on sovereign debt restructuring that would establish an intergovernmental negotiation process aimed at increasing the efficiency, stability and predictability of the international financial system.


With 124 votes in favour, 11 votes against and 41 abstentions, the Assembly adopted “Towards the establishment of a multilateral legal framework for sovereign debt restructuring processes” (document A/68/L.57/Rev.1).


Introducing the draft resolution, Sacha Sergio Llorentty Solíz (Bolivia), speaking for the “Group of 77” developing countries and China, said the text stressed the importance of timely, effective, understandable and lasting debt restructuring solutions for developing countries that would promote growth in an inclusive manner.


However, Terri Robl ( United States), speaking in explanation of vote, stressed that she could not support a statutory mechanism for sovereign debt restructuring as such a mechanism was likely to create economic uncertainty.  That uncertainty could impact upon the provision of financing to developing countries.  In the past, market-oriented approaches had been preferred and work was ongoing in the International Monetary Fund (IMF) and elsewhere.  Furthermore, not only had the resolution presupposed a final outcome, which inhibited proper discussion, it had been snuck onto the docket at the very end of the session, establishing a costly mandate and asking Member States “to write a blank cheque”.


Hector Timerman, Minister for Foreign Affairs of Argentina, expressing pride that so many countries supported the resolution, stated that as a “democratic forum par excellence”, the General Assembly was the right place for discussions aiming at embarking on an ethical political and legal pathway to end unbridled speculation.  The clear majority agreed it was time to establish a legal framework for restructuring that respected creditors while allowing debtors to emerge from debt safely.  The profits currently made by vulture funds were scandalous and were funnelled into campaigning and lobbying to prevent changes to the situation.


Addressing those who had not voted in favour of the resolution, he noted that those delegates generally represented centres of finance.  Yet, a legal restructuring framework would benefit developed, as well as developing, countries.  Sovereign debt held development back and the establishment of a better system could improve global economic security.  The Assembly’s democratic decision to support the creation of a mechanism would give the peoples of the world what they deserved, saving them from the “sinister masters of opulence” who ran vulture funds.


Rodolfo Reyes Rodríguez ( Cuba) pointed out that vulture funds did not deserve the name “vulture”.  Vultures contributed positively to ecosystems; vulture funds were parasitic.  Developing countries had paid many times the amounts originally received as loans and that ate resources essential to development.  He wondered how much progress on the Millennium Development Goals had been missed through such denial of resources.


Shorna-Kay Marie Richards (Jamaica), noting how recent events brought urgency to addressing sovereign debt and establishing a multilateral mechanism for restructuring, said that the United Nations dealt with States’ sustainable development objectives.  Therefore, the General Assembly was an appropriate forum in which to consider those issues.  The private market could not fully address problems of unsustainable sovereign debt.  That had been particularly apparent in speculation by specialized investment funds that purchased distressed and deeply discounted sovereign debt on secondary markets for the sole purpose of recouping full value through litigation.


The Assembly then took up the draft resolution, “Programme of activities for the implementation of the International Decade for People of African Descent (document A/68/L.58), which it adopted without a vote.


Karel Jan Gustaaf van Oosterom (Netherlands), introducing the draft resolution “Report of the International Criminal Court” (document A/68/L.59), said that the document provided political support for the International Criminal Court and the work it carried out, while underlining the important relationship between the Court and the United Nations.  The text also served to remind the world of the need to cooperate with the Court to ensure its effective functioning.


Speaking before the action, Almustafa Mubarak Hussein Rahamtalla ( Sudan) said the International Criminal Court targeted African States.  His country was not party to the Rome Statute and, therefore, was not bound by its decisions, particularly given that Sudan’s national justice system was ready and able to deal with any legal issues.


Christian Wenaweser ( Liechtenstein) voiced regret that the text demonstrated a lack of progress since the previous year and looked forward to a higher quality, more relevant document in the future.  He underscored that the text was the only one dealing with the relationship between the United Nations and the International Criminal Court.  States parties to the Rome Statute had offered ideas for improving the draft, but few were included.  He called on the Security Council to use its power to refer States not party to the Rome Statute to the Court and said the recent Council visit to the Court should be followed up by practical measures.


Thembile Elphus Joyini ( South Africa) said, as a State party to the Rome Statute, his country was well aware of the tremendous costs of investigations and persecutions of cases referred to the Court by the Security Council.  Such costs should be borne by the United Nations.  He went on to express disappointment that the resolution did not include a paragraph on financing.


Koki Muli Grignon ( Kenya) said her country believed that the current implementation and interpretation of the Rome Statute was counterproductive and antagonistic.  The Rome Statute was undergoing a test of veracity, usefulness and impartiality and she urged the international community to take prompt and decisive action to ensure that the “ Kenya cases” do not drag on ad infinitum.


The Assembly then took up the draft resolution titled “Enhancement of the administration and financial functioning of the United Nations (document A/68/L.42/Rev.1), adopting it without a vote.


Also speaking were representatives of Iceland, Russian Federation, Japan, Italy (on behalf of the European Union), Nicaragua, China, Morocco, South Africa, Brazil, Ecuador, El Salvador, India, Singapore, Syria, Colombia, Mexico, Sri Lanka, Egypt, Canada, Norway, Australia, Uruguay, Chile, Venezuela, Algeria, Costa Rica and Hungary.


The Assembly will reconvene at 3 p.m. on Wednesday, 10 September, to consider three draft resolutions and a report of the Ad Hock Working Group on the Revitalization of the work of the General Assembly.


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For information media • not an official record
For information media. Not an official record.