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"By Cancelling These Debts, We Want to Give Rise To An International Debate on Lender Responsibility"

posted by Melissa Jacoby

The title of this post is a quote from the development minister of the nation of Norway.  Norway is unconditionally forgiving debt owed to it by five countries (thanks to Adam Feibelman for the tip).  Some sovereign debts can be characterized as illegitimate or, in some cases, even "odious" (in general because they are unbeneficial to, and perhaps affirmatively bad for, the people of the debtor nation) and there is no standard mechanism by which they can be released of those obligations.  Countries and institutions are not exactly lining up to unilaterally forgive other countries' debts, so Norway's decision to do so is highly significant.  But the stated and suggested reason for the debt forgiveness is also notable - that the lending was motivated by Norway's self/sovereign-interest and not legitimate developmental objectives in the five debtor nations.  Although lending to countries and individuals are two very different animals, those in the sovereign debt and consumer/private entity debt worlds are engaging in parallel responsible lending debates.   


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