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Mae Buenaventura is the debt justice program manager of the Asian People’s Movement for Debt and Development, a regional alliance of people’s movements, community organizations, coalitions, NGOs and networks.
A potentially historic shift in public debt governance will take place this week in Washington DC. development financing.
The first organized by the UN borrowers’ forum It will be officially presented on April 15 next to 2026 Spring Meetings of the International Monetary Fund (IMF) and the World Bank. The initiative led by five countries – Zambia, Egypt, Nepal, Maldives and Pakistan – is one of the main achievements of last year’s Conference on Financing for Development (FFD4) in Seville, Spain.
The forum’s mandate is to establish a platform for borrower countries, supported by the UN Secretariat, to “discuss technical issues, share information and experiences in addressing debt challenges, increase access to technical assistance and strengthen debt management capacities, coordinate approaches and strengthen the voice of borrower countries in the global debt architecture”.
Instead of dealing with lenders alone, these countries will now use a UN-sponsored platform to share technical expertise and coordinate their approach to a global debt system. basically broken.
Debt keeps nations vulnerable to climate change
The human cost of the current debt architecture is staggering. According to UNCTAD, the United Nations Trade and Development Agency, approximately more than 40% of the world’s population. 3,400 billion people – live in countries where governments are forced to spend more on debt repayments than on health, education and social protection for their citizens.
In so-called low-income countries, governments spend an average of 7.5% of their total budget on debt service, and interest payments consume up to 20% of total government revenue in these regions.
The Philippines is a case study in this financial stranglehold. It is part of a global majority forced to watch its public services collapse and infrastructure lag, while its wealth is dissolved to satisfy foreign lenders.
Automatic credit policies -Ferdinand Marcos Sr. a legacy of the late president’s rule – he mandates debt servicing before any other public expenditure, putting the demands of lenders above the needs of the Filipino people. Even as it faces a $1.5 trillion regional funding gap to meet the 2030 Sustainable Development Goals (SDGs), its hands remain tied by a legal framework that values credit ratings over human life.
As a “middle-income country” (MIC), the Philippines is stuck in a depressing purgatory. It is often “too rich” for the G20’s debt relief framework, but too poor to absorb global economic shocks. Last year, Deputy Finance Minister Joven Balbosa hit the nail on the head when he called for help.beyond the simplistic categorization of income” which ignores the real weaknesses of a country.
Without an inclusive and equitable global debt architecture, nations including the Philippines face catastrophic climate risks and economic shocks with zero fiscal breathing room.
There is no respite from climate disasters
Regional evidence of this systemic failure is everywhere. Take Pakistan, which was hit by disaster in 2022 the floods which submerged a third of the country and caused billions in losses. Despite the climate-driven disaster, World Bank data shows that Pakistan made $11.8 billion in public and publicly guaranteed (PPG) external debt payments in 2023, and PPG external debt stood at $93 billion in the same year, surpassing the pre-pandemic debt of $87 billion (2020).
Sri Lanka Since 1991 it has followed the prescriptions of the IMF in 16 loan programs, becoming the first Asian country in this century. Its MIC status prevents the application of debt relief and restructuring measures. Today, the people of Sri Lanka are facing harsh conditions, including an increase in VAT from 8% to 15%, a reduction in food and fuel subsidies, and the erosion of hard-earned workers’ pensions.
Today, global lending and borrowing rules are set by a “Creditors’ Club” made up of the IMF, the World Bank and the Global Sovereign Debt Bureau it created, and the Paris Club.
These organizations measure “debt sustainability” through a narrow view of a country’s ability to pay on time. They largely ignore internal economic disparities, gender disparities and the existential threat of climate change.
Crises should cancel debt service
By hosting the new borrowers’ forum, the Global South signals the end of the era of passive “standard setting” by lenders.
The ultimate goal of the global civil society and debt justice movements is to establish a UN Debt Convention; a democratic, binding and inclusive framework that regulates both lenders and borrowers. Such a mechanism would ensure that debt restructuring and cancellation is sufficient for countries to meet their international human rights obligations and implement necessary climate action.
The Green Climate Fund selects sites in five developing countries
To be truly transformative, debt sustainability analysis must align with human rights and sustainable development needs. This means carrying out impact assessments – both before and after lending – to identify “legitimate” debts that do not benefit the public.
Crucially, we need an automatic debt service cancellation mechanism that is triggered in climate, environmental or health situations. We also need a binding global debt registry to ensure that every loan is transparent and subject to public scrutiny.
Whether the borrowers’ forum becomes a real landmark depends on how brave it is to face the situation. We can no longer allow debt to act as the “silent killer” of our future. It is time to demand a financial system that serves humanity, not just the balance sheets of the powerful.
