Agenda for tackling debt crisis

Following the Fourth International Conference on Financing for Development in June, we reached a breakthrough moment. Governments, international financial institutions, and civil-society organisations, recognising the need to tackle today's debt and development crises, are ready for action ahead of the United Nations General Assembly (UNGA) in September.

- MARTÍN GUZMÁN MAHMOUD MOHIELDIN VERA SONGWE

Recent reports that we each coauthored — Healthy Debt on a Healthy Planet, the Jubilee Report, and the Report of the UN Secretary-General’s Expert Group on Debt — along with many other experts’ work, have definitively established the severity and urgency of these intertwined crises and their devastating consequences.

In 2024, developing countries paid US$25 billion more to external creditors than they received in new disbursements. That means 3.4 billion people — or more than 40% of the world’s population — live in countries that spend more on interest payments than on health or education.

Not only do many recognise the severity and urgency of the problem, they also agree on how we got here. The global financial system is not designed to meet the needs of people and the planet. Given historical inequities and low bargaining power, developing countries consistently face high borrowing costs and uneven incidence of prudential regulation. Without measures to ensure transparency, accountability, and strategic investment planning, borrowing and lending policies have failed to mobilise the productive investments that drive sustainable growth. Moreover, capital flows are highly volatile, with money flooding into developing countries during booms and flooding out in the wake of shocks. Meanwhile, the laws and policies governing debt restructurings have long encouraged delay, not resolution.