Helping developing countries free themselves from the burden of debt

More than three billion people worldwide live in economies forced to spend more on debt repayment than on health or education. To help developing countries free themselves from the burden of unsustainable debt, a new UN-backed forum was launched Wednesday. 

The Seville Debt Forum will promote fairer lending, faster restructuring and long-term reform of the financial system established after World War II.

Hosted by Spain and supported by the United Nations, this forum aims to maintain global attention on the debt crisis while translating into concrete actions the firm commitments made at the Fourth International Conference on Financing for Development (FFD4) in June in Seville.

Governments, finance ministers and creditors from developed and developing countries will participate in what the UN Secretary-General calls “a global dialogue on debt”, which aims to ensure financial justice and that borrowing benefits developing economies rather than disadvantages them.

“Developing countries spend $1.4 trillion a year servicing their debt,” Guterres said at the forum’s opening in Geneva.

“3.4 billion people live in countries that spend more money on debt servicing than on health or education. Countries should never have to choose between servicing their debt and serving their people,” he added.

The new forum will also support the Seville Commitment, an ambitious roadmap adopted at the FFD4 conference to make global finance fairer and more sustainable.

This document sets out plans to reduce borrowing costs, enable rapid and fair debt restructuring, and strengthen transparency and accountability.

A borrowers’ forum, launched in Seville in July, is also expected to help over-indebted countries coordinate their efforts, share legal and technical expertise, and make their voices heard in a system long dominated by major lenders.

The Seville process, which includes the Commitment and the Programme of Action, reflects growing concern that soaring debt is jeopardizing progress towards achieving the Sustainable Development Goals (SDGs) by the 2030 deadline, according to UN News.

More than 60 developing countries now spend at least 10% of their government revenue on interest payments, while many are seeing their access to affordable credit decline.

Within the context of this new framework, countries will seek to develop common principles for responsible borrowing and lending, strengthen crisis prevention mechanisms and explore reform of the global debt architecture, long considered outdated and fragmented.

“The Seville Debt Forum will help deliver the financial justice that people and countries need and deserve,” Mr. Guterres said. “The United Nations is proud to be part of this effort

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