Burundi’s Position on the Legal Aspects of Odious Debt
Burundi, one of the world’s smallest nations, has just emerged from a 12-year ethnic-based civil war. The war started in 1993 and just ended in 2005, which then caused an alteration in the government political system to take on a democratic form. They are now in process of peace although they are still in the struggle of reviving their shattered economy and forging national unity. Burundi is a landlocked island surrounded by the Democratic republic of Congo, Rwanda, and Tanzania. Burundi’s GDP per capita is about $139, and only 18% of the population has food security. Due to its poor economy, Burundi is at this moment burdened by huge debts and is struggling to pay those debts and revive their economic condition.
Burundi’s Stance on the Legitimacy of Odious Debt
Odious debts are debts that are contracted by the government for purposes that are against the interest of the citizens of the state. Despite the fact that Burundi has a very poor economy, we are not very sure that odious debt has been or is being implemented in our country. Burundi deals with many economic problems, which then leads to many other problems such as low education and lack of medical supplies. These issues have led Burundi into various debts. Burundi has paid off some of their debts with the help of the International Monetary Fund (IMF). Currently, we are still struggling to pay off our debts and revive our economy.
Burundi’s Experiences and Circumstances in Debts and Odious Debts Burundi has received much help from the IMF (International Monetary Fund), World Bank, and many other institutions. Creditors have helped us a great deal by reducing our debts. Burundi became the 24th country to reach final stage of the IMF debt relief program. Burundi has also been categorized as one of the “heavily indebted poor countries” and received additional debt relief from the Multilateral Debt Relief Initiative. The IMF and World Bank have been helping Burundi by cancelling more than 90% of Burundi’s debts, worth around $1.4 billion. That debt relief meant that for over the next 10 years, Burundi may save up to $50 million a year by focusing their spending on priority areas such as health, education, agriculture, water, and rural infrastructure. Burundi’s main creditor nations have agreed to reduce Burundi’s debts by 7%, after negotiations with the government of Burundi and after Burundi implemented structural reforms. The agreement has provided Burundi with US$80 million and canceled US$ 4.4 million of Burundi’s foreign debt. Before this agreement, Burundi’s debt to creditors had reached the amount of US$130 million.
Burundi’s Cases in Debts
The poor economic condition of Burundi is a major issue that Burundi is struggling to work out. Currently, economic and financial crises are affecting the world, in both developed and developing countries. Although they can survive, debt and poor economies are the impacts and felt by every country affected. The crisis also hindered developing countries to become more developed. As a developing country, this crisis has made Burundi vulnerable. We are experiencing lower exports, reduced aid in-flows, decreased remittance, and decreased foreign direct investment. The crisis also caused a weak economic balance of payments. There are some external debts of Burundi that are repayable. In 2003, their debt reached $1.140.000.000 and was ranked 132. However, over the next six years until 2009, the number kept increasing until $1.200.000.000 and was ranked 150. These are the total of public and private debts owed to nonresidents repayable in foreign currency, goods, and services. This information is accurate approximately until September 17, 2009. However, Burundi has made much progress, especially its economy.
Burundi’s Domestic Legislation Concerning Debts
In the 1980s, it became apparent that irresponsible lending...