General News
5 September, Debt Sustainability Analysis for Sustainable Development
FES and Jubilee USA 
organised a seminar with IMF and World Bank Executive Directors and senior staff in Washington DC, to discuss the recent set of studies on how to reform Debt Sustainability Analysis. The four studies are by Martin Guzman and Jo Stiglitz (The Practice of Sovereign DSAs), Gail Hurley (How Transparency Makes DSAs a Trusted and Effective Tool), Matthew Martin (How to Ensure DSAs Accelerate Sustainable Development) and Sherilynn Raga (An Appraisal of DSAs Amid Multiple Crises). Twenty-two Executive Board offices were represented. The Board members and staff generally received the studies very positively, and indicated that they will be valuable inputs to the current review of the LIC-DSF and any future review of the SRDSF. The four studies are published here.
25 July, Addis FSD Conference Plenary on Debt
Matthew Martin spoke in the plenary session on debt at the FFD Preparatory Conference for the FFD Summit to be held in 2025, held in Addis Ababa. His speech highlighted the depth and breadth of the worst ever debt crisis for countries of the global South, and made 5 practical recommendations from the July 2024 Norwegian Church Aid report to help countries hit by natural disasters, lower-income and market-accessing countries to reduce their debt service burdens sharply during 2025-30; and to reform the Common Framework so that it targets a level of 10% external debt service/revenue from year 1 of a debt relief agreement. These practical steps could save US$847 billion a year for spending on the SDGs, 60% more than the amount the UN Secretary General requested to fund the SDG Stimulus. In addition, to slow the next debt crisis, he proposed the adoption of a protocol to the UN Convention Against Corruption, preventing enforcement of predatory debt.
23 July, Addis FSD Conference - FES Debt Sustainability Side Event
The two debt sustainability studies prepared by Gail Hurley and Matthew Martin for Friedrich Ebert Stiftung were discussed in a side-event on Debt Sustainability Assessments and their Role in the International Financial Architecture at the Addis Ababa FSD Prepcon on 23 July. Very useful comments were provided by Robert Powell, IMF Representative to the UN in New York; Volker Hey of the BMZ; Patricia Miranda of LATINDADD; and the South African Ambassador to the UN in New York, Mathu Joyini. The studies were well received, and the ensuing discussion focussed on how to make debt sustainability assessments more SDG-linked and transparent, and use them to help return countries’ debt service to sustainable levels. The two studies are available here.
21 July, Resolving the Worst Ever Debt Crisis – 2024 Report Launch
The updated 2024 version of the Norwegian Church Aid study – Resolving the Worst Ever Global Debt Crisis – was launched at the Addis FFD conference. Its main findings are that average debt service to revenue and expenditure ratios have risen by 5% to 42% and that 91 countries will continue to have very high debt service for the next decade. It, therefore, makes proposals for differentiated debt relief to help countries hit by natural disasters, lower-income and market-accessing countries to reduce their debt service burdens sharply during 2025-30; suggests comprehensive reforms to the Common Framework and other legal and normative measures to be pursued in FSD and UNCAC, as well as laying out a roadmap for ending the debt crisis by the end of 2025. The study is available here, and a Guardian article covering it here. The full 2024 Debt Service Watch database will be published in October.
21 July, FES/UNFSDO Preparatory Day – Advancing Debt Sustainability and SDG Investments
To support the debt workstream of FSD Conference preparation, FES and UNFSDO organised the latest in a series of meetings to gather high-quality policy proposals to maximise debt sustainability and fund SDG investments. Matthew Martin spoke in Session 1: Sustainable and responsible borrowing and lending, and debt crisis prevention. He emphasised that we are way beyond the stage where short-term rescheduling or reprofiling of debt service will work (only Tajikistan and Uzbekistan have a short-term debt service problem this could resolve), and stressed the need to cancel debt service for countries hit by natural disasters; reform DSAs so that they include top-priority SDG spending needs and their positive effects on growth, agree in UNCAC to prevent enforcement of predatory debt or restructuring agreements, and enhance accountability of debt policies to parliaments and citizens in the global North and South. The discussion also focussed on reforming credit ratings, regulating bond issuance, and the need for a Framework Debt Convention to enhance the UN’s role in norm-setting on debt issues.
