The insurance seller has the same risk as an uninsured homeowner.” Likewise, if the bonds AIG insured did not pay out, the company was on the hook for those losses. “If you’ve sold insurance on a house, and the house burns to the ground, you have to pay. “Think about home insurance,” McDonald says. In these transactions, the insurance seller (in this case, AIG) in some ways becomes the bond owner. Most of the post-mortems of AIG focus on its selling of credit default swaps, which are financial instruments that act like insurance contracts on bonds. Their analysis showed, in fact, that these assets ended up losing money in the long term-meaning AIG executives’ assertions about the safety of these investments were incorrect. “I was deeply interested in learning whether that was true.” “After the crisis, there was a claim that these assets had been money-good,” meaning they were sound investments that may have suffered a decline in the short term but were safe overall, McDonald says. What’s more, McDonald and Paulson examined the assertion that the mortgage-backed securities underlying AIG’s transactions would not default. Securities lending, a less-discussed facet of the business, lost AIG $21 billion and bears a large part of the blame, the authors concluded. The company’s credit default swaps are generally cited as playing a major role in the collapse, losing AIG $30 billion. “There were multiple moving parts.” Why Did AIG Really Fail? “AIG is a mystery to a lot of people and it’s very complicated,” McDonald says. How, exactly, did AIG get to the point of failure? In a recent paper, Robert McDonald, a professor of finance at the Kellogg School of Management, and Anna Paulson of the Federal Reserve Bank of Chicago, pull together disparate data and information to create an economic narrative of what went wrong. Nevertheless, many of us-economists included-remain fuzzy about what happened. Both the Congressional Oversight Panel and the Financial Crisis Inquiry Commission produced detailed reports that included accounts of AIG, and the Federal Reserve Bank of New York made public a detailed account of its involvement. Further, most textbooks do not mention Southeast Asia and do not focus on the concerns which are relevant for students.Because AIG’s near-failure was a prominent and iconic event in the financial crisis, it provided a touchstone for subsequent financial reform discussions, and a great deal of information about AIG and the rescue is in the public domain. The cost of a textbook is another challenge, as they can cost the equivalent of a month’s living allowance for the average undergraduate student. Translation is a big problem, as nearly all undergraduate students study in their national language. While there are many excellent human rights textbooks available, they do not always suit the needs of students in Southeast Asian universities. Many lecturers at Southeast Asian universities spoke of the frustration of not having textbooks appropriate for their courses. Given that education on human rights is a human right itself, and that few students graduate from university with any knowledge of human rights, there is much work to do. This was in response to its objective of improving teaching on human rights in Southeast Asian universities. When the Southeast Asian Human Rights Studies Network (SEAHRN) was formed in 2009 one of its first activities was the development of a textbook for Southeast Asia students. ![]() Reflecting this, there are weakening mandates of NHRIs and reduced civil and political freedoms upon which civil society depends that challenges the ability to investigate and pursue cases. ![]() However, in Thailand and its neighboring countries where investments are located there has been an authoritarian turn. Further institutionalization of ETOs is significant to emerging regional and global agendas on business and human rights, including the UN Guiding Principles on Business and Human Rights that both the Thai and Malaysian governments have expressed commitment to. Whilst NHRIs are in positions of political authority to investigate cases, civil society also enable cases through networking, research, and public advocacy. The article argues that the emergence of ETOs in Southeast Asia, and its future potential, is dependent upon the collaborative relationship between the NHRIs and transnational civil society networks. Two large hydropower dams under construction in Laos submitted to NHRIs from Thailand and Malaysia, namely the Xayaburi Dam and Don Sahong Dam, are detailed as case studies. This article examines the role of National Human Rights Institutions (NHRIs) and transnational civil society in pursing Extraterritorial Obligation (ETO) cases in Southeast Asia as a means to investigate human rights threatened by cross-border investment projects.
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