Prevention of Odious Obligations: A New Tool to Help Stem the Violence in Syria

March 09, 2012

Last week President Obama responded to the rising carnage in Syria by saying that he is looking for “every tool available to prevent the slaughter of innocents in Syria,” government-instigated violence that has already claimed thousands of lives. What new tools are available? The economic sanctions imposed are having an impact, but they are weakened by the willingness of the Russians, Chinese and others to continue doing business with the Assad regime. There is rising talk of military action, with former U.S. presidential candidate John McCain calling for airstrikes. But the risks are huge, there is no certainty of success, and there is little appetite in the United States or elsewhere for such action.It’s time to try something new: preemptive contract sanctions. This idea is so new and compelling that we at CGD have tried something new to explain it: a white board video, in which I lay out the basics in just a little over four minutes. Please watch it!I have also written, jointly with Owen Barder, a two-page policy memo that offers further detail on how it would work. And because questions inevitably arise with new policy approaches we have prepared a list of Frequently Asked Questions (FAQ) for policy makers and others in a position to help to implement this idea. In preparing this material, Owen and I have drawn heavily on a CGD working group report: Preventing Odious Obligations: A New Tool for Protecting Citizens from Odious Regimes, that thoroughly investigated this idea and provides a comprehensive discussion of how it could work.If there was ever a time and place to try this new approach, that time is now, and the place is Syria. I first wrote about the potential of this proposed new policy tool to help stem the violence in Syria last August, when UN Secretary-General Ban Ki-moon called the situation “chilling and horrifying,” and U.S. Secretary of State Hillary Clinton was urging other nations to join the United States and boycott Syrian oil.Since then the United States, European Union, Arab League, and other countries have imposed strong sanctions against Syria’s oil sector and the central bank, but Russia and China have blocked action by the UN Security Council that could extend sanctions globally, even on arms and munitions. Yet among other nations, the rising violence has solidified an international consensus that the Assad regime is odious and illegitimate. The new tool would complement sanctions already in place, further isolating the regime and signaling that the economic squeeze on it will not loosen anytime soon.The Arab League plans to meet Saturday to ponder what further measures can be taken to pressure the Syrian government. I hope they will consider this proposal to join with the U.S., UK, and European Union and declare that any new loans to the Syrian government, or new contracts with the state-owned oil industry or involving arms transfer, are illegitimate and need not be honored by a legitimate successor government.CGD’s Prevention of Odious Debt Working Group set out to find ways to put pressure on illegitimate regimes that were violently suppressing human rights, using international financial resources such as public loans or resource extraction revenues to do it, and to save legitimate successor governments from having to repay those debts or honor those contracts. Syria epitomizes just such a situation.It’s time to try this new tool, and a forum to do so exists. The informal group of Western and Arab states known as “Friends of Syria” should declare that the Assad regime is illegitimate and that contracts signed after the date of the declaration would be unenforceable in the courts of those countries. The broader the group, the more legitimate and politically credible the declaration would be, but the U.S. and UK are the critical players because of the role that the international financial centers in New York and London play in world commerce.


CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.