Spain’s Debt Fix Kicks Off Now
Sevilla Hub Fights $102T Debt Woe
Geneva: A $102 trillion global debt crisis in 2024 has left 3.4 billion people in countries where loan payments eclipse health and education budgets, risking economic collapse amid climate shocks and geopolitical strife. Developing nations owe $31 trillion, paying $921 billion in interest alone, according to the United Nations Conference on Trade and Development (UNCTAD).
Now, a Spanish-led platform aims to unite creditors, borrowers, financial institutions, academia, civil society, and experts to address debt sustainability, management, and innovative solutions through working groups, monitoring systems, technical support, and inclusive consultations.
Backed by UNCTAD and the United Nations Department of Economic and Social Affairs (UN DESA), Spain launched the Sevilla Forum on Debt today in Geneva during the 16th United Nations Conference on Trade and Development (UNCTAD16), being held from October 20 to 23.
UN Secretary-General António Guterres, Spain’s Minister of Economy, Trade and Business Carlos Cuerpo, UNCTAD Secretary-General Rebeca Grynspan, and UN DESA Under-Secretary-General Li Junhua announced the forum, a key outcome of the Fourth International Conference on Financing for Development (FfD4), held in Sevilla from June 30 to July 3, 2025. It will operate under the Sevilla Platform for Action, complementing the Sevilla Commitment, a 42-page roadmap endorsed by over 190 nations to fund the 2030 Agenda’s 17 Sustainable Development Goals, including poverty eradication, gender equality, climate action, and reduced inequalities. Building on the 2002 Monterrey Consensus, 2008 Doha Declaration, 2015 Addis Ababa Action Agenda, and 2024 Pact for the Future, the Commitment tackles a $4 trillion annual financing gap with over 130 initiatives across domestic public resources, private finance, international cooperation, trade, debt sustainability, international financial architecture, science, technology, and data monitoring, with tailored provisions for least developed countries, landlocked developing countries, small island developing states, middle-income countries, and conflict-affected regions.
The Sevilla Commitment views sovereign debt as a major obstacle to Sustainable Development Goal (SDG) progress, as servicing costs drain vital funds. It calls for a fairer debt system with responsible borrowing and lending.
The Commitment proposes a UN working group with the International Monetary Fund (IMF) and World Bank to set voluntary borrowing and lending principles based on UNCTAD and G20 standards. It advocates a World Bank-hosted global debt registry for clear reporting. It promotes climate-resilient debt pause clauses in contracts. It seeks expanded concessional finance through multidimensional vulnerability indices. It encourages local-currency lending and innovative tools like debt indexation and thematic bonds.
The Commitment also seeks to establish a Small Island Developing States Debt Sustainability Support Service under the SIDS Centre of Excellence for legal, financial, and negotiation advisory, plus data enhancement. It proposes a liquidity facility, potentially within the World Bank or IMF, for coordinated support, including voluntary SDG debt swaps. It aims to enhance the G20 Common Framework for Debt Treatments, extending it case-by-case to middle-income countries, incorporating lessons, offering temporary suspensions during negotiations, and using the Global Sovereign Debt Roundtable for comparability assessments. It urges legislation to curb creditor holdouts via collective action clauses. It seeks scaled-up aid from the African Legal Support Facility.
The Sevilla Commitment refines the IMF-World Bank Debt Sustainability Framework for Low-Income Countries to include SDG priorities, climate factors, and growth impacts. It pushes for long-term, scenario-based credit rating methodologies and supports an Africa Credit Rating Agency to cut high premiums. It calls for a UN-led intergovernmental process to review the global debt architecture for efficiency and fairness. The Sevilla Forum puts these reforms into action through technical pathways, working groups, and progress tracking.
Guterres emphasised uniting developed and developing countries, finance ministers, and creditors to sustain Sevilla’s debt agreements and advance reforms. “This Forum will bring together all partners — including developed and developing countries alike, and finance ministers and creditors — in a global dialogue on debt. It will sustain political attention on the debt agreements reached in Sevilla, while developing technical pathways to bring them to life. This includes taking forward the commitment to consolidate and uphold principles on responsible borrowing and lending, and gathering new ideas to advance debt architecture reform, which is long overdue,” he said, urging fast, fair, development-focused solutions with UN system-wide support for the Sevilla Commitment and Platform for Action initiatives. Cuerpo highlighted Spain’s role in hosting and shaping the forum as a bridge for candid borrower-creditor talks and a hub for tracking debt initiatives. “The Forum could serve as a vital bridge between borrowers and creditors and a hub for candid discussion on initiatives to help overcome the mounting debt challenge. It will also play a key role in tracking the implementation of the debt initiatives agreed upon in Sevilla,” he said.
Spain’s multilateral efforts include the Debt Pause Clause Alliance, backed by Canada, France, the United Kingdom, and development banks like the Inter-American, European Investment, African, Asian, and Latin America-Caribbean Development Banks, to suspend payments for crisis-hit nations, and the World Bank-hosted Global Hub for Debt Swaps to convert debt into SDG investments like education or conservation.
Grynspan underscored the forum’s role in fostering dialogue among borrowers, lenders, academia, civil society, international organisations, and experts to share knowledge, promote coordination, and develop innovative solutions. “The Seville Forum will allow a substantive dialogue between all parties, borrowers and lenders, academia, civil society, international organisations and experts, to share knowledge, promote coordination, and develop innovative solutions to debt problems. We are pleased that this initiative is being announced during UNCTAD 16, since it represents a real breakthrough in supporting developing countries to tackle debt challenges. UNCTAD is fully committed to facilitating this process, ensuring that it leads to real, impactful outcomes for the countries most in need,” she said.
UNCTAD and UN DESA, with decades of expertise in debt crisis support, will provide research and facilitation. Li Junhua noted, “The Sevilla Commitment marked a pivotal moment in our efforts to build a fairer, more development-oriented debt architecture. The ultimate test, however, lies in implementing the full package of debt actions. This is where the Sevilla Forum on Debt can be our catalyst for action. As a platform for inclusive dialogue, the Forum can help build political momentum and convergence around key actions.”
The forum draws on past debt relief successes. The 1996 Heavily Indebted Poor Countries (HIPC) Initiative and 2005 Multilateral Debt Relief Initiative (MDRI) cut debts by about 60% for 36 nations, enabling Uganda to reduce debt-to-GDP from over 100% to below 20% and boost school enrollment from 62% to over 90%, Mozambique to improve health and infrastructure, Tanzania to expand education and vaccinations, and Ethiopia, Ghana, and Zambia to redirect funds to social services, though delays and climate risks persist. The 2020 Debt Service Suspension Initiative (DSSI) deferred $12.9 billion for over 40 countries, aiding Ethiopia’s COVID response. Zambia’s 2023-2024 Common Framework deal eased $6.3 billion, despite coordination issues. Peru’s debt-for-nature swaps preserved ecosystems. As FfD4’s first institutional outcome, the forum transforms Sevilla’s pledges into actionable governance, linking finance reform to the needs of billions, with success hinging on turning dialogue into tangible results.
– global bihari bureau
