Sevilla Forum on Debt

The Sevilla Forum on Debt is a New Hope for Global Financial Justice. Read here to understand what this forum means for the global debt crisis.

At the 16th session of the United Nations Conference on Trade and Development (UNCTAD 16) in Geneva (October 2025), a new global platform, the Sevilla Forum on Debt, was officially launched.

Spearheaded by Spain in partnership with UNCTAD and the UN Department of Economic and Social Affairs (DESA), this initiative seeks to reform the way the world handles sovereign debt crises, particularly in developing economies.

Table of Contents

The Global Debt Crisis

The global debt landscape has become increasingly unsustainable.

According to UNCTAD, total public debt worldwide reached US $102 trillion in 2024, with developing countries accounting for over US $31 trillion.
These nations spent nearly US $921 billion in interest payments alone, more than their combined spending on health and education.
Debt distress has intensified due to COVID-19 recovery costs, climate adaptation needs, global inflation, and rising interest rates.

Many low- and middle-income countries now face a “development-debt trap”: to sustain basic services, they must borrow more, often at higher rates, further aggravating their fiscal vulnerability.

Sevilla Forum on Debt

Launch: 22 October 2025 at UNCTAD 16, Geneva.

Led by Spain, in cooperation with UNCTAD and UN DESA.

Objective: To create a multilateral platform where debtor and creditor nations, financial institutions, civil society, and experts can discuss fair, transparent, and sustainable debt solutions.

Key Objectives

Reforming the Global Debt Architecture: Develop frameworks for predictable and fair restructuring processes that balance debtor needs with creditor confidence.
Promoting Responsible Borrowing and Lending: Encourage transparency, sustainability assessments, and accountability in debt contracts.
Ensuring Developmental Justice: Prevent debt repayments from undermining social spending, green transition, and Sustainable Development Goals (SDGs).
Supporting Debt-Climate Swaps and Innovative Financing: Encourage linking debt relief to environmental and climate adaptation outcomes.
Monitoring and Implementation: Serve as a bridge between high-level political commitments made under the Sevilla Platform for Action and actual technical and financial mechanisms.

Why Is It Important?

For Developing Nations: The forum provides a voice for debtor countries historically excluded from global debt governance led by the G20 or IMF.
For Global Stability: Unsustainable debt levels can destabilize entire regions, weaken trade and investment, and hinder climate action.
For Inclusive Global Governance: By involving civil society, academia, and multilateral institutions, the Sevilla Forum marks a shift toward participatory global financial decision-making.
For Achieving SDGs: Restructured, fair debt terms can free fiscal space for investments in health, education, and climate resilience.

Challenges

Fragmented Creditor Landscape: Diverse creditors, traditional lenders, private bondholders, and emerging economies like China, have conflicting interests, slowing coordination.
Lack of Binding Mechanisms: The forum is advisory and cooperative in nature; without enforceable commitments, implementation could lag.
Private Sector Participation: Ensuring private creditors adhere to restructuring terms remains a major obstacle in global debt reforms.
Geopolitical Tensions: Rivalries among major powers may influence or undermine multilateral debt negotiations.
Monitoring and Accountability: Translating political will into real economic relief requires consistent follow-up and data transparency.

India’s Perspective

Shared Interests: As a major developing economy and a voice of the Global South, India has consistently advocated for reform of international financial institutions and fairer debt management frameworks.
G20 Presidency Legacy: India’s 2023 G20 presidency had already placed debt sustainability and multilateral bank reform on the global agenda; the Sevilla Forum complements those efforts.
Strategic Opportunity: India can leverage its expertise in digital finance, sustainable growth, and South-South cooperation to shape the forum’s agenda.

Way Forward

Operationalise a Global Debt Resolution Mechanism: Establish transparent, time-bound procedures for debt restructuring under UN auspices.
Integrate Climate and Debt Agendas: Institutionalise debt-for-climate swaps and green bonds within the Sevilla Forum’s framework.
Enhance Data Transparency: Mandate disclosure of all debt contracts to avoid hidden or opaque lending.
Strengthen Developing-Country Representation: Ensure equal participation and decision-making power for debtor nations.
Coordinate with Multilateral Lenders: The IMF, World Bank, and regional development banks should align with the forum’s recommendations.

Conclusion

The Sevilla Forum on Debt represents a pivotal step toward a fairer and more resilient global financial order. By seeking to balance creditor rights with debtor needs, it aims to make debt a tool for development rather than a burden of dependence.

For the Global South, including India, its success could mean greater fiscal freedom to invest in social welfare, climate resilience, and inclusive growth.

As the world navigates economic uncertainty and climate risk, the Sevilla Forum embodies the growing realization that sustainable development and financial justice are inseparable goals, and both demand global cooperation anchored in equity and accountability.

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