UN expert calls for human rights in global lending
- By Chen Boyuan
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E-mail China.org.cn, July 7, 2015
China should be aware of human rights factors in global lending, an important consideration for the two China-led multilateral development banks -- the New Development Bank (NDB) and the Asian Infrastructure Investment Bank (AIIB), said a United Nations debt expert on foreign debt in Beijing on Monday.
![Juan Pablo Bohoslavsky (L), the United Nations Independent Expert on foreign debt, holds a press conference on Monday, July 6, 2015, at the U.N. China headquarters in Beijing, to brief on the achievement of his latest China visit. [Photo by Chen Boyuan / China.org.cn]](http://images.china.cn/attachement/jpg/site1007/20150707/001aa0ba3c161705837b0e.jpg "Juan Pablo Bohoslavsky (L), the United Nations Independent Expert on foreign debt, holds a press conference on Monday, July 6, 2015, at the U.N. China headquarters in Beijing, to brief on the achievement of his latest China visit. [Photo by Chen Boyuan / China.org.cn]") |
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Juan Pablo Bohoslavsky (L), the United Nations Independent Expert on foreign debt, holds a press conference on Monday, July 6, 2015, at the U.N. China headquarters in Beijing, to brief on the achievement of his latest China visit. [Photo by Chen Boyuan / China.org.cn] |
Juan Pablo Bohoslavsky, the U.N. Independent Expert on foreign debt, noted that there are often difficulties in reconciling the principle of non-intervention in domestic affairs and the idea of protecting and promoting human rights. He acknowledged that the Chinese government has shown sincerity in undertaking the "delicate, complex but much needed task."
Bohoslavsky called for a stronger governmental role in ensuring human rights in international lending, among other business activities, because "market discipline alone is insufficient to ensure human rights compliant business conduct," he said.
China has endorsed the “Guiding Principles on Foreign Debt and Human Rights and the Guiding Principles on Business and Human Rights,” which set out key international human rights principles that both lenders and borrowers, as well as the financial institutions in between, have to respect.
Such international human rights standards and guidelines are "particularly relevant" when recipient countries of international loans are believed to have "high risks, are experiencing internal armed conflicts, have weak governance structures or have a lack of effective enforcement of national and international law by national authorities," Bohoslavsky said.
While still a developing country, China has become a global player in the world economy and a major international lender in recent years. Data show that loans from the China Development Bank and the Export-Import Bank of China for foreign investments have outnumbered the lending of the World Bank.
China has provided foreign aid in the form of grants, interest free loans and concessional loans to more than 120 countries and Chinese companies have since embarked on a "going out" strategy to invest abroad with the support from Chinese financial institutions, according to the U.N.
While China has pledged transparency and the best governance for the NDB and AIIB, which will be operational soon, the U.N. official said that "a narrow idea of efficiency in which human rights plays a limited role should not find its way into these two banks," meaning that the two new multilateral development banks should not repeat the mistakes of other development banks whose record has in several instances caused concern.
However, the current debt crisis in Greece is an alert message in terms of risk management for the two development banks since China as the initiator should consider what to do when a recipient country has problems repaying a loan.
Bohoslavsky suggested a mechanism for debt relief without attaching flagrant conditions should be part of the operation mechanism of the two banks.
He added that Greece cannot take any more austerity measures, because it would cause social unrest, a statement that reflects on the land-slide result in a latest referendum to reject the EU bailout package on condition of more austerity on the already ravaged economy.
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