S1E3. Lee Buchheit and Mitu Gulati on Debt-for-Nature Deals
Play • 1 hr 21 min
On this episode of Free Range, Mike Livermore speaks with sovereign debt experts Lee Buchheit and Mitu Gulati. Buchheit is a retired partner at international law firm Cleary Gottlieb Steen & Hamilton, whose practice centers on international debt restructuring and project finance. He has worked on more than two dozen sovereign debt restructuring deals, including leading the team that advised the Greek government during its 2012 debt crisis. Mitu Gulati is the John V. Ray Research Professor of Law at the University of Virginia School of Law. In addition to his academic work, he is the host of Clauses and Controversies, a podcast which examines the intersection of international finance and contract law. To start off, Buchheit and Gulati provide a bit of background into their careers and how the field of sovereign debt restructuring re-emerged in the 1980s, fifty years after it first appeared in the wake of the Great Depression. Buchheit then provides a detailed explanation of what, exactly, sovereign debt is, how it functions on the international stage, and its advantages and drawbacks, and then describes the kinds of circumstances that can cause nations to seek to restructure their debts (1:15 – 21:22). Continuing on from this, Buchheit explains the sovereign debt restructuring process, like the one Greece went through in the early 2010s, when the situation was so dire that some even suggested Greece sell the Acropolis (22:10 – 27:40). The conversation then shifts to analyzing broader questions about the current structure of global debt, and the potential sovereign debt crisis that looms over the global economy (28:52 – 41:00). The podcast concludes with a long discussion about a recent debt restructuring deal Buchheit worked on for the government of Belize, which incorporated certain environmental conservation goals as conditions of the restructuring. The specifics of the deal lead Gulati and Livermore to raise questions about whether sovereign debt contributes to economic disparities between the Global North and Global South (42:00 – 1:20:18). Professor Michael Livermore is the Edward F. Howrey Professor of Law at the University of Virginia School of Law. He is also the Director of the Program in Law, Communities and the Environment (PLACE), an interdisciplinary program based at UVA Law that examines the intersection of legal, environmental, and social concerns.
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