From Suffocation to Hope: Seville Opens New Paths for Debt Resolution in Countries

The Debtor Countries Forum has emerged as a crucial advancement in the pursuit of reforming the international debt architecture, supported by the United Nations. This forum has become a central element of the Sevilla Commitment, marking a milestone in how developing countries face challenges related to their debt.

Rania Al-Mashat, Egypt’s Minister of Planning and Economic Development, emphasized in a recent speech that the forum is not just a statement but a concrete action driven by the countries themselves. This effort aims to create a unified voice and a coherent strategy to tackle the issues arising from debt.

Rebeca Grynspan, Secretary-General of UN Trade and Development, noted that historically, developing countries have negotiated individually with their creditors, which limits their bargaining power. Currently, more than 3.4 billion people live in nations that allocate more resources to debt servicing than to essential sectors like health and education.

The forum, which responds to the recommendations of the Debt Expert Group, promises to be a space where developing nations can share experiences, receive technical advice, and strengthen their capacity for joint negotiation. This initiative addresses long-standing demands from the Global South for more inclusive decision-making in a global financial environment predominantly focused on the interests of creditors.

From Zambia, Foreign Minister Mulambo Haimbe expressed that this initiative will foster relationships based on mutual respect and shared responsibility. He also showed openness to the possibility of hosting the forum’s inaugural meeting. Spain’s Finance Minister, Carlos Cuerpo, referred to the current debt crisis as “silent yet urgent,” clearly alluding to the founding of the Paris Club nearly seventy years ago.

Mahmoud Mohieldin, UN Special Envoy for Financing the 2030 Agenda, highlighted that the forum aims to address a system that has left debtor countries on the sidelines for too long, seeking to prevent a future debt crisis.

However, the launch of this initiative takes place in a context of growing global concern about debt, particularly among developing countries. The Sevilla Commitment advocates for greater transparency in debt, better coordination among creditors, and the creation of a multilateral legal framework for debt restructuring, emphasizing national strategies that promote sustainability.

Despite these advances, civil society organizations have expressed disappointment, labeling the commitment adopted in Sevilla as a “missed opportunity.” Jason Braganza, a representative of the African Forum and Network on Debt and Development, criticized the lack of ambition in the final document, emphasizing that many African countries are facing debt crises that hinder investments in critical sectors like health and education.

Civil society voices have warned against the so-called debt-for-climate action swaps, which they consider “false solutions” that do not address the fundamental fiscal issues faced by developing countries. Some leaders have advocated for a new UN Fiscal Convention as a means to drive significant and effective reforms.