Civil Society FfD Group calls for systemic solutions to address the debt crisis. We call on governments to establish a Debt Workout Mechanism at the UN i.e a transparent, binding and multilateral framework for debt crisis prevention and resolution that addresses:
- Supporting and providing immediate debt cancellation to all countries in need by all creditors (bilateral, multilateral and private)
- Common and Binding Principles on Responsible Borrowing and Lending
- Using human rights and development impact assessments in debt sustainability analyses
- Assessing systemic risks posed by unregulated or inadequately regulated financial sector instruments and actors, including credit rating agencies
A fair and timely resolution will never result from lender dominated forums, that excludes the voices of people and governments of the Global South. United Nations, which is not a creditor itself, is the only forum that provides an inclusive and democratic space to provide a lasting multilateral solution to the debt crisis.
For more details on this civil society proposal, visit: https://csoforffd.org/2021/03/19/civil-society-meeting-on-international-debt-architecture/
The below database tracks recent statements by governments calling for ambitious solutions supporting debt cancellation and/or debt architecture reforms at the UN.
|LDC Group||2019||link to the UN Webtv video. Malawi and Jamaica’s statements are from 1:31:36 – 1:46:23||Malawi on behalf of LDC Group at UN General Assembly’s Second Committee in 2019|
: “There is no international framework for restructuring of sovereign debt and this forum should seriously think about that”
|CARICOM||2019||link to the UN Webtv video. Malawi and Jamaica’s statements are from 1:31:36 – 1:46:23||Jamaica on behalf of CARICOM at UN General Assembly’s Second Committee in 2019|
: “I was here in 2015 when we last tried to get a statutory debt restructuring mechanism. We failed, but maybe it is time for us to revisit it”
|AOSIS||2020||Link to statement|
|These actions should include the design of new and the enhancement of existing financial instruments to provide debt relief including through debt cancellation, debt suspensions, debt rescheduling and restructuring, as well as other support measures.”|
|Saint Lucia||2019||Link to statement|
|Statement by Allen Chastanet, Prime Minister of Saint Lucia: |
Reducing external debt to a sustainable level in the medium term through a multilateral debt workout mechanism. More systematic, transparent and coordinated steps towards restructuring external debt obligations are critical.
|South Africa||2020||Link to statement|
|Statement by President Ramaphosa, May 2020|
Developing country debt is a foremost concern. South Africa supports the call of the African Union for a debt standstill for two years. We endorse the call of Secretary-General Guterres for the development of a comprehensive debt framework. This should start with an across-the-board debt standstill for countries unable to service their debts, followed by targeted debt relief and a comprehensive approach to structural issues in the international debt architecture to prevent defaults.
|South Africa||2020||Link to statement|
|Statement by President of South Africa and Chairperson of the African Union, Cyril Ramaphosa, Sep 2020|
“Our view is that the Debt Service Suspension Initiative in its current form does not go far enough. South Africa supports extending the initiative and, in certain instances, considering the cancellation of debt.”
|Nigeria||2020||Link to statement|
|Statement by President Buhari, 2020|
Debts must be forgiven and cancelled. Free additional resources are needed urgently through an international consensus to enable poor countries work to reverse the devastation of COVID-19 to the human race
|LLDC||2020||Link to statement|
|Statement by Prime Minister of Nepal Rt. Hon. Mr. K P Sharma Oli on behalf of the Group of the Landlocked Developing Countries, 2020|
“concrete support measures should be put in place to address debt vulnerabilities including through debt cancellation for highly indebted countries, debt relief by international creditors, exchange or reprofile debt to reduce debt service, writing-off debt, debt swaps for highly indebted countries, debt buy-backs and support market access.”
|Gambia||2020||Link to statement|
|Statement by Mambury Njie, Minister of Finance and Economic Affairs , 2020|
The COVID-19 pandemic has heightened the challenge of debt sustainability. We support the recommendation of the discussion groups and reiterate the strong call by the African Union for some form of debt relief or debt cancellation. Unless we work collaboratively, the debt problem will continue to squeeze fiscal resources and impact life-saving interventions and sustainable investments in our economies to attain the SDGs.
|Cuba||2020||Link to statement|
|Statement by the Prime Minister of Cuba, Manuel Marrero Cruz , 2020|
We support the initiatives for debt relief, although they are insufficient; the unpayable external debt borne by the countries of the South must be eliminated, which, worsened by the socioeconomic impact of the pandemic, threatens the sustainable development of peoples.
|President of Trade and Development Board (Argentina)||2021||Link to statement|
|8. Perhaps one of the most urgent transformations needed is finding a durable solution to debt issues, with exacerbating debt vulnerabilities in developing|
countries being a central issue in the post-pandemic world. The current crisis provides an opportunity to reform the international debt architecture and the
international financial system. A single global sovereign debt authority, independent of multilateral, bilateral or private creditor or debtor interests, is needed to address the manifold flaws in the current handling of sovereign debt restructuring.
10. Furthermore, debt suspensions should be extended on a need-basis independently of income level, including private and multilateral creditors and debt
cancellations will need to be considered as well. A publicly controlled credit rating agency also needs to be considered. We should shift from a position where private Credit Rating Agencies can hold a position of “arbiters” by setting ratings, when
they are also players in the same market.
|LDC Group||2021||Link to statement|
|“Full debt cancellation of all bilateral, multilateral, and commercial debts owed by LDCs and a debt standstill with immediate effect and reallocation of Special Drawing Rights towards the LDCs”|
|Botswana||2021||Link to statement|
|We call upon all Creditors to work with individual Governments with less fiscal space, including both low and middle income countries, to provide grants and improve the debt architecture through suspending loan re-payments and where possible, writing them off.|
|AOSIS||2021||Link to statement|
|The Paris Club and IFI’s, donor governments, as well as other creditors, should consider a waiver of this year’s debt repayment for SIDS as a short-term measure, and the implementation of debt forgiveness as part of a long-term solution. Further actions should include the design of new and enhanced financial instruments to provide debt relief including: debt cancellation, debt suspension, debt rescheduling and debt restructuring, debt swaps, as well as other support measures.|
|Lesotho||2021||Link to statement|
|Lesotho would therefore like to encourage all international creditors; both commercial and private, to take bolder action to suspend debt repayments, apply debt cancellation and moratoria and provide additional resources for supporting economic growth|
|Kenya||2021||Link to statement|
|We continue to encourage creditor nations and multi-lateral institutions to consider debt servicing moratorium, debt swaps and debt cancellation for vulnerable economies.|
|Jamaica||2021||Link to statement|
|we also support calls for the establishment of a sovereign debt restructuring mechanism, one that will deal effectively with the long- standing problem of holdout creditors.|
|Madagascar||2021||Link to statement|
|Cela étant et pour faciliter le processus de relance économique post-covid-19, nous invitons les bailleurs et partenaires financiers à accorder l’effacement total ou partiel de la dette au lieu d’un moratoire.(Google translate: However, to facilitate the process of post-covid-19 economic recovery, we invite donors and financial partners to grant full or partial debt relief instead of a moratorium.)|
|Bolivia||2021||Link to statement|
|Para superar esta grave situación Bolivia propone:|
– Un acuerdo global de alivio a la deuda en favor de países en desarrollo (google translate: A comprehensive debt relief agreement for developing countries.)
– La condonación o refinanciamiento de la deuda externa a nivel global (google translate: The cancellation or refinancing of the external debt at the global level)
|Nicaragua||2021||Link to statement|
|La segunda medida es la condonación de la deuda de los países en desarrollo, al menos en el período 2020 – 2024. Es mejor para todos que se condone la deuda durante estos cuatro años como parte de la solución, evitando una prolongada cadena de impagos de la deuda soberana como parte del problema.(Google translate: The second measure is the cancellation of the debt of the developing countries, at least in the period 2020 – 2024. It is better for everyone that the debt is forgiven during these four years as part of the solution, avoiding a prolonged chain of defaults of sovereign debt as part of the problem.)|
|Argentina||2021||Link to statement||Speech by the President of the Argentine Republic, Dr. Alberto Fernández|
Desde este caso de “deudicidio”, que clama al mundo financiero global, enfatizo que resulta clave rescatar los principios de sostenibilidad de la deuda que se han debatido y acordado en las Naciones Unidas, en aquella resolución 69/319 del año 2015. Por eso, apoyamos también la idea de impulsar un acuerdo multilateral inclusivo, capaz de abordar de manera acabada las cuestiones referidas a la reestructuración de las deudas soberanas. (Google translate: I emphasize that it is key to rescue the principles of debt sustainability that have been debated and agreed at the United Nations, in that resolution 69/319 of 2015. For this reason, we also support the idea of promoting an inclusive multilateral agreement, capable of fully addressing the issues related to the restructuring of sovereign debts.)
|Malawi||2021||Link to statement||Statement by Dr. Lazarus Mccarthy Chakwera, President of the Republic of Malawi |
At the same time, to help us recover from the economic devastation caused by this pandemic, the starting point is three words: Cancel the Debts. This is the single most impactful thing that would help developing nations like Malawi build back better and not be left behind.
|Nigeria||2021||Link to statement||Statement by Muhammadu Buhari, President of Nigeria |
there is an urgent need to consider expansion and extension of the Debt Service Suspension Initiative to include all Developing, Least Developed Countries and Small Island Developing States facing fiscal and liquidity challenges. In addition, a review of the eligibility criteria for debt suspension, including outright cancellation, is needed for countries facing the most severe challenges.
|Group of LLDCs||2022||Link to statement|
|– it is crucial that debt moratorium packages be reintroduced or repackaged into long-term debt restructuring or cancellation programmes|
– multilateral debt should be addressed on a long-term basis, including by cancelling, exchanging or re-profiling debt for the most vulnerable highly indebted LLDCs
– private and commercial creditors from developed economies should also be encouraged to join debt restructuring initiatives
– To comprehensively address the issue of debt sustainability, there is need for a more coordinated effort from all stakeholders to address the emerging debt crisis, through fairer and more effective mechanisms for debt crisis resolution, as well as more responsible borrowing and lending
|Africa Group||2022||Link to statement|
|Global action is also urgently required to support the African countries to mitigate the looming risk of debt distress through debt restructuring and cancellation programmes.|
|Jamaica||2022||Link to statement|
|underscore Jamaica’s support for… reform of the international debt architecture to include a Sovereign Debt Workout Mechanism.|
|Nigeria||2022||Link to statement|
|Indeed, the multifaceted challenges facing most developing countries have placed a debilitating chokehold on their fiscal space. This equally calls for the need to address the burden of unsustainable external debt by a global commitment to the expansion and extension of the Debt Service Suspension Initiative to countries facing fiscal and liquidity challenges as well as outright cancellation for countries facing the most severe challenges|
|Argentina||2022||Link to statement (Spanish)|
|Las naciones endeudadas padecen mucho más los efectos del sistema establecido. Argen1na está entre ellas. Por eso, quiero dar gracias a todos los Estados que nos apoyaron y nos apoyan en el complejo proceso de renegociación de nuestra deuda externa. |
Es un endeudamiento que mi gobierno no generó pero que afronta con toda seriedad. Nuestros criterios son conocidos. Responden a lo dispuesto por esta Asamblea General en la Resolución 69/319 de 2015, cuando dispuso que las reestructuraciones de las deudas soberanas deben hacerse promoviendo el crecimiento sostenido e inclusivo, minimizando los costos económicos y sociales, garan1zando la estabilidad del sistema financiero internacional y respetando los derechos humanos. (Google translate: Indebted nations suffer much more from the effects of the established system. Argentina is among them. For this reason, I want to thank all the States that supported us and continue to support us in the complex process of renegotiating our foreign debt. It is an indebtedness that my government did not generate but that it faces with all seriousness. Our criteria are known. They respond to the provisions of this General Assembly in Resolution 69/319 of 2015, when it established that the restructuring of sovereign debts must be done promoting sustained and inclusive growth, minimizing economic and social costs, guaranteeing the stability of the international financial system and respecting human rights.)
|Ghana||2022||Link to statement|
|It has become clear, if ever there was any doubt, that the international financial structure is skewed significantly against developing and emerging economies like Ghana. The avenues that are opened to powerful nations to enable them take measures that would ease pressures on their economies are closed to small nations. To make matters worse, credit rating agencies have been quick to downgrade economies in Africa, making it harder to service our debts. The tag of Africa as an investment risk is little more than, in substance, a self-fulfilling prophecy created by the prejudice of the international money market, which denies us access to cheaper borrowing, pushing us deeper into debts. |
The financial markets have been set up and operate on rules designed for the benefit of rich and powerful nations, and, during times of crisis, the façade of international co-operation, under which they purport to operate, disappears… The necessity for reform of the system is compelling.
|Malawi||2022||Link to statement|
|One problem in desperate need of a solution for the most vulnerable LDCs is the unsustainable debt levels and distress they bear. It is not for nothing that the Scriptures, which are regarded as sacred to more than half the people on this planet, describe unsustainable debt as a form of slavery. And as leaders of generations past worked together to end old forms of slavery, so we too must work together to end this new form. |
Recently, the Managing Director of the International Monetary Fund called on the world’s major lenders to show leadership by relieving vulnerable countries of the debts that are shackling them, because even loans that were given and received in good faith have become unsustainable in the recent and current climate of relentless and unforeseen external shocks. I therefore join her in reiterating that call
|Belize||2022||Link to statement|
|The current tentative, reactionary and piecemeal approach to addressing the debt problem has proven hopelessly ineffective. |
We must break the pernicious cycle between debt and climate and disaster risk. IFIs must incorporate climate risk into debt sustainability tools..
In the current circumstances, there is a compelling urgency to advance a multilateral sovereign debt restructuring mechanism.
|Bahamas||2022||Link to statement|
|We support the call for reforms in the global financial system to make it more relevant to the needs of today. But those reforms need ambition. They need to go beyond the incremental. And they need to apply to all. |
For example, the community of international financial institutions are in a position to forgive the debt incurred by the economic shutdowns during the COVID-19 pandemic. They should do so.
Every year that we don’t do the right thing, the right thing to do becomes more expensive.
|Nepal||2022||Link to statement|
|The countries under debt stress need urgent debt relief, restructuring, and cancellation. The international community must swiftly help them come out of their debt crises.|