The Failure of the Foreign Bondholders Protective Council Experiment, 1934–1940
This article explores the contentious U.S. State Department–Foreign Bondholders Protective Council relationship in the context of interwar foreign economic policy and bureaucratic competition. U.S. officials created the council in 1933 to represent the interests of U.S. investors in the settlement of the numerous dollar bond issues that had gone into default. The article shows why the council failed to perform as U.S. officials expected and outlines the process by which they increasingly interposed themselves in debt negotiations. In doing so, it considers the limitations of using private organizations to accomplish the objectives of public policy.
Protecting Against Sovereign Defaults
Chapter 2 analyzes the various means used by creditors to mitigate sovereign risk well in advance – that is, when countries issue bonds, sign loan agreements, or are at an early stage of their borrowing cycle. Section 2.1 looks at sovereign bond and loan covenants: it presents the clauses that enable creditors to enforce contracts, secure repayment flows, avoid subordination, neutralize the risk of repayment on unfavorable terms, obtain specific guarantees, and make debt renegotiations easier once a default has occurred. The main provisions studied here are the choice of law, arbitration, currency, pari passu, and collective action clauses (CACs) as well as pledges, negative pledges, and “inflation-proof” clauses. Section 2.2 addresses the various insurance and insurance-like instruments that investors can rely upon to hedge against default risk; these include sovereign risk insurance covenants, contracts of guarantee offered by multilateral agencies, and credit default swaps (CDSs).
PUBLIC PARTICIPATION AND SOCIAL ACCEPTABILITY IN THE PHILIPPINE EIA PROCESS
Since 1992, the Philippines has employed an innovative requirement to demonstrate social acceptability in project planning as a means through which public participation can be established. This paper discusses the participatory mechanisms used and evaluates the effectiveness of public participation in three case studies from key development sectors. In doing so, the existing conceptual frameworks for evaluating public participation are further developed through insights to community empowerment and sustainability in particular. Whilst increased public participation has resulted in improvements in the EIA process and environmental decision making in the Philippines, the evaluation of the case studies also reveals substantial issues of conflict within the communities and of the representation of diverse local interests at core stages in the planning process.