Countries that throw off a repressive dictator are too often left saddled with illegitimate and odious obligations. To maintain access to international credit markets, legitimate successor governments must honor these debts and comply with other contracts negotiated by the prior regime, even if the proceeds were stolen or used to violently repress opposition.
Syria today epitomizes this mortgaging of the future. The regime of President Bashar Assad has killed thousands of people since protests began in 2011. The Arab League, United States and European Union have condemned the violence and imposed strong sanctions against Syria’s oil sector and central bank. But these have not stopped the regime from buying weapons from Russia, or from trying to sell to China and other countries the oil the United States and European Union refuse to buy.
A new policy tool would strengthen existing measures against the Assad regime: pre-emptive contract sanctions. CGD senior fellow Kimberly Elliott explains how pre-emptive contract sanctions could work in Syria in this short video:
A two-page policy memo and FAQ by Elliott and Owen Barder, CGD senior fellow and director for Europe, offers further detail on how the approach could work. Their application of this approach to Syria draws 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.
This working group was co-charied by by CGD visiting fellow John Williamson, non-resident fellow Michael Kremer, and Seema Jayachandran of Stanford University, with the support at CGD of Cindy Prieto, program coordinator. Their work is being carried forward by Kimberly Ann Elliott, Owen Barder, and Jenny Ottenhoff. For further information, please contact Jottenhoff@cgdev.org.