The Sevilla Forum on Debt

During the 16th UN Conference on Trade and Development (UNCTAD16), which took place in Geneva from 20 to 23 October 2025, a new UN-supported forum designed to help tackle some of the most pressing debt issues across emerging economies was launched. The Seville Forum on Debt, led by Spain, aims to bring together both creditors and borrowers, as well as international financial institutions and academics.

The Need

The global debt has reached unprecedented levels.

· In 2024, public debt hit $102 trillion, with developing countries accounting for $31 trillion and paying $921 billion in interest payments alone. .

o Developing countries spend $1.4 trillion on annual debt servicing, while 61 of them spent 10% or more of their government revenues on interest payments last year.

· According to UNCTAD, 3.4 billion people now live in countries spending more on debt servicing than on health or education.

· As per the World Bank 2024 Report, developing countries spent a record $1.4 trillion to service their foreign debt as their interest costs climbed to a 20-year high in 2023.

o Currently, more than half of developing countries allocate at least 8% of government revenues to interest payments, a figure that has doubled over the past decade.

· This unsustainable debt trajectory threatens progress toward the Sustainable Development Goals (SDGs) and has amplified calls for comprehensive sovereign debt reform.

· Debt experts have warned that the situation for many developing nations - especially the poorest - is worsening against a backdrop that has seen wealthy nations from the United States to Europe cut aid and slash development financing in favour of defence spending.

Concerns of Rising Debt

· Impact on climate action: Developing countries need to increase climate investments from their current level of 2.1% of GDP to 6.9% by 2030 to meet the Paris Agreement targets. However, they are currently spending more on interest payments than on climate investments.

· Increase the cost of resolving debt crises: The increasing complexity of the creditor base makes debt restructuring more difficult as it requires negotiating with a broader range of creditors with diverging interests and legal frameworks.

· Inequalities in the international financial architecture: Borrowing from private sources on commercial terms is more expensive than concessional financing from multilateral and bilateral sources.

· Cut in public spending: Countries with high debt reduce expenditure in public services such as healthcare, education and social welfare. This can exacerbate poverty and inequality.

In these dire circumstances, a need was being felt to create a mechanism that would allow a substantive dialogue between borrowers, lenders, academia, civil society and experts to share knowledge and develop innovative debt solutions.

Hence, the Sevilla Forum on Debt has been launched.

· At the launch, UN Secretary-General António Guterres said: "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 agreements on debt 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."

The Forum

· The Forum, led by Spain and supported by UNCTAD and the United Nations Department of Economic and Social Affairs (UN DESA), aims to create a permanent, inclusive platform for dialogue and coordinated action on sovereign debt challenges.

· The forum – one of 11 recommendations by the UN Secretary-General's Expert Group on Debt – will allow countries to share experiences, receive technical and legal advice, promote responsible lending and borrowing standards and build collective negotiating strength.

· Its launch addresses long-standing calls from the Global South for more inclusive decision-making in a debt system dominated by creditor interests.

· It marks one of the first tangible outcomes of the Fourth International Conference on Financing for Development (FfD4) and is part of the broader Sevilla Platform for Action, which operationalizes the Sevilla Commitment.

o The Sevilla Commitment lays down a roadmap for strengthening development financing and ensuring debt sustainability in developing economies.

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.

Importance

· 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.

Way Ahead

· Promote responsible borrowing and Lending: Encourage countries to follow fiscal prudence and avoid excessive reliance on high-cost commercial loans.

· Enhance coordination among stakeholders: Foster collaboration between multilateral institutions, bilateral creditors, private banks and borrower nations.

· Link debt relief to development Goals: Tie debt swaps and relief measures to investments in health, education, climate action, and sustainable infrastructure.

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. 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.

The writer is a London-based academic.