When the dictators execute the coup and become the head of the country do they pay the international debts of country?

Question

There are so many coups happened in the history, and many of them in 20th century only, and after every coup a single man becomes the main head of the country, often called as dictator. My question is if some army head, political radical or someone similar executes the coup and becomes the main head of the country by terminating the democracy then what will be his responsibility towards the international relations that his nation had before him?

Let's assume for simplicity that his nation took a loan from international market, and the debt was quite heavy on the country. It seems quite obvious that if he wouldn't pay the debts and try to make all the previous contracts dead he wouldn't be treated friendly by the international counter-parts. So, what it is that those dictators do after acquiring the power? Examples of international policies of the notorious dictators (that is those of Germany, Italy and Russia) will be preferred.

UPDATE: Some of the answers to this question have stated that "paying debt" or any other international obligation has little to do with the regime. I'm a little skeptical of that, as we know that developed countries like US force the developing countries of Asia to take part in international trade no matter if they produce enough food to feed their citizens, so if a dictator comes up (through some revolutionary method) to power and tries to do something against the contracts he will surely be sorely treated by the developed countries. A democratic government might surrender to the debt, these governments (if under debt) will say to the high economic countries that they are unable to pay the debt and consequently developed countries will see it as an opportunity to establish a monopoly in that country. But in the case of dictators (they hardly give up or surrender) they might say "from now on every agreement of the previous government is officially announced to be null and void" and then he will start getting international pressure. So, I'm a little less inclined to accept that democratic government and dictatorship will behave (even theoretically) similarly towards the international relations.

Answer 1

Sovereign debt is not cancelled by a change in regime. But sovereign nations cannot be compelled to do anything.

If I have a personal or business debt that I can't or won't pay, then there is a system of law that my creditor can use. They can go to the court and get a order that is given to bailiffs. The bailiffs can then come to my home and take my property. If I try to stop them by force then I may break the criminal law and be arrested and put in prison. This is because there is a government and a legal system that make me behave.

But if I am a country, there is no government. If I don't pay the debt, then there is no court that can get bailiffs.

So the dictator is in exactly the same position as any other ruler of a country, democratic or not. They can choose to pay their debt or not. If they choose not to then they will find it very hard to get loans in the future.

In your particular cases there were complexities surrounding "war debts" (the countries had borrowed to pay for the costs of the first world war) and "reparations" (the losers of ww1 had to pay the victors a punitive amount). There was a complex arrangement by which reparations were repaid by debts. There was hyperinflation. There was a worldwide recession. All of these made calculations of the debt complex, and repayment difficult or impossible. There were various debt restructurings in the 1920s and 1930s, but the second world war stopped repayment. Finally much of German debt was cancelled in 1953 (by agreement with the debtors)

I'll add that a dictator, or any national leader, has no personal responsibility for the national debt. The leader's personal wealth and debts are separate from the country's debts. Of course, lots of dictators have stolen from their country, but rather fewer (if any) have used their personal wealth to pay off any part of the national debt.

In short dictators have exactly the same responsibilities that a democratic leader has to repay debt.

Answer 2

There is the opposite concept, called odious debt. The new democratic government argues that the debts of the old dictatorship are not legimitate. Creditors are obviously not happy with the idea and fight strongly against it.

Answer 3

Is it the same country?

Usually even the largest regime changes assert a continuity with the previous country, acknowledging that they will consider the existing treaties valid. Of course, they may still default on some agreements (e.g. loans) as any other government can with the same consequences.

If this is not done and the new leadership is asserting that they are a truly new country and none of the previous treaties apply, then they would be up for a diplomatic (and often physical) fight to get recogntion from other countries - since if you don't have a treaty with your neighbours (and any interested overseas countries) in which they accept your sovereignty over your borders, then every other country is free to take over your lands, kill or enslave your people and take any goods and resources there - after all, they're sovereign to do as they please and (since the previous country and the old treaties have ceased to exist) they have no obligation to refrain from that; the default state of international affairs is unrestricted violence until/unless specific border treaties and recognition of sovereignty are made. So the new regime should be prepared to fight a war of independence or negotiate otherwise with everyone else so that it's in their best interest to keep your regime.

Enforcement of debt

In addition, if there are any other factions competing for power in your country, then any would-be dictator would be wise to proclaim that they will be paying any previous debts (which they often do) since otherwise the countries to whom you owe money are likely to support your opponents with money, arms and men as long as they promise to keep paying earlier debts. Historically, not paying your debts was also considered a reasonable casus belli justification to invade your lands and take wealth directly or seize resource-producing areas (e.g. mines) for repayment of debt; and supporting a side in civil war or inciting a civil war is also an option with historical precedent when countries try to renege on their debts.

Perhaps the Venezuela Crisis of 1902-1903 is a reasonable illustrative case study for your question; where the most recent claimant to power (Cipriano Castro) refused to pay foreign debts after gaining leadership - the reaction was military intervention by other countries.

Answer 4

As Peteris answered, this is related to the problem of Succession of States. If the new regime declares it is the successor to the old regime, it inherits its treaties, and its debts. If it declares it is a new state, it does not... though their creditors may not agree. Some regimes try to have it both ways: act as successor for the good parts, act as a new state for the bad ones. And some regimes argue about who is the true successor.

There's a third way out: Declare your predecessor an illegitimate government. Anything they did is null and void, including their debts.

Illegal acts of rebellious southern US state governments: 1861-1865

The United States had a problem when it came to reintegrating the rebellious states after their civil war. The US maintains that states cannot secede. If they can't secede they never stopped being US states. If they never stopped being US states, then they owe their war debt. But neither the states nor the Federal government wanted to pay Confederate war debt, and especially didn't want to deal with former slave owners making claims for the loss of their slaves.

They declared the states had never seceded. Instead, their state governments' actions were illegal. This allowed them to remove the rebellious state government while maintaining they never seceded. This also allowed the people to retain their US citizenship and not be declared traitors; they were victims of the state government's illegal acts.

The Fourteenth Amendment directly addresses the issue of debt. The US would have to pay their own debts fighting the rebellion, but they wouldn't pick up the debts of the rebellious state governments. Nor would the states have to pay their formerly rebellious state government's debts.

Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

The 14th Amendment says that if you chose to loan money to an illegal government that's your problem.

Illegal occupation of Korea by Japan: 1905-1945

South Korea claims to be to the successor state of the Korean Empire. The Korean Empire was conquered an incorporated into the Empire of Japan. Meanwhile, the Provisional Government of the Republic of Korea declared itself the true government-in-exile. South Korea claims to be the successor to the Provisional Government and thus the Korean Empire neatly skipping over 40 years of Japanese occupation. Any government acts during the occupation they consider to be Japan's.

Polish Puppet State? 1947-1989

When Germany was partitioned, who was the successor state? Who took on Germany's debts? Who paid their war reparations? This was covered in the Potsdam Agreement.

1. Reparation claims of USSR shall be met by removals from the zone of Germany occupied by the USSR, and from appropriate German external assets.
2. The USSR undertakes to settle the reparation claims of Poland from its own share of reparations.

East Germany would pay the USSR, the USSR would pay Poland. In 1953 the USSR pressured Poland to forgive most of East Germany's debts in exchange for resolving their border dispute in favor of Poland.

After reunification, Germany continued to pay Poland reparations, though it seems a significant point whether they paid Poland or organizations representing Polish citizens. A fine, but important point. There is an ongoing debate within Poland and Germany over whether Poland in 1953 was truly a sovereign state, or a puppet government of the USSR. And whether its agreement was solely with East Germany or reunited Germany.

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An issue with all these claims is consistency. A nation must maintain a consistent position with regard to its predecessor, either it was legal or illegal, or it must specific which bits were illegal as in the Potsdam Agreement.

All Nazi laws which provided the basis of the Hitler regime or established discrimination on grounds of race, creed, or political opinion shall be abolished. No such discriminations, whether legal, administrative or otherwise, shall be tolerated.

If it argues by what's convenient at the moment, both positions are weakened, and other countries are more likely to push their claims.

Answer 5

No.

https://cbonds.com/bonds/62843/

After 2014 Ukrainian revolution new democratic government refused to repay debt before Russia, signed in december 2013 by previous president Yanukovich with due december 2015.