External debt is one of the six chapters of the Monterrey Consensus and Doha Declaration on Financing for Development. Since 2002, it has been at the core of the FfD follow-up process, including through the work of the General Assembly and Economic and Social Council (ECOSOC). “External debt sustainability and development” is one of the selected topics from the FfD agenda examined by the Second Committee of the General Assembly under the item entitled “Macroeconomic policy questions.” The issue has also been central to Millennium Development Goal #8.
Debt defaults and debt restructuring have high costs for debtors and creditors and when problems occur in systemically important countries, it has negative implications for global financial stability as well. The financial and economic crisis has exerted new pressures on developed and developing countries in the area of debt sustainability. A review of debt sustainability frameworks which capture the new realities and ensure sustainable growth of developing countries in the medium- and long-term has gained prominence in the international agenda and intergovernmental discussions. Despite progress in introducing collective action clauses in bond contracts, several gaps remain for a comprehensive treatment of all components of debt in a debt restructuring. In order to facilitate mutual understanding amongst stakeholders, it is crucial to engage them in a discussion to identify the gaps in the financial architecture and build-up consensus on the possible policy options to improve the architecture.
The Financing for Development Office has been organizing multi-stakeholder consultations on external debt, with the participation of all relevant stakeholder groups (governments, international organizations, private sector and civil society) to identify issues in sovereign debt restructuring that need policy action to make crisis prevention and management more effective and ensure debt sustainability and orderly functioning of financial markets. The aim is to identify incremental steps that stakeholders can agree on and implement in improving the functioning of the international financial system for debt restructuring and follow-up on the commitment to policy actions on debt in the Monterrey Consensus and the Doha Declaration on Financing for Development.
For more information: GA documents on External debt
- Special joint meeting of the Second Committee of the General Assembly and ECOSOC on sovereign debt restructuring and debt resolution mechanisms (New York, 14-14 October 2014)
- Implications of the Argentine Debt Litigation for the International Financial Architecture (New York, 7-7 October 2014)
- Expert Group Meeting on “Sovereign Debt Restructuring: The Road Ahead” (London, United Kingdom, 25-25 April 2014)
- Panel Discussion “The Debt Problem of Small Vulnerable States: A Time to Act” (New York, 24-24 February 2014)
- Seminar on “New developments in sovereign debt restructuring” (Washington, D.C., 16-16 April 2013)
- Panel discussion on “Facilitating international adjustment through timely debt resolution” (Tokyo, Japan, 12-12 October 2012)
- Expert Group Meeting on “Sovereign Debt Restructuring” (closed meeting) (London, United Kingdom, 19-19 September 2012)
- Expert Group Meeting on “Sovereign Debt Restructuring” (closed meeting) (New York, 18-18 May 2012)
- New Policy options for dealing with sovereign debt problems: discussion on recent initiatives (London, United Kingdom, 8-8 September 2010)
- Consultation on Policy Options for dealing with the Impact of the Financial Crisis on the External Debt of Developing Countries (Geneva, 13-13 November 2009)
- Emerging Market Debt: Is the System Working Well Enough? (New York, 22-22 June 2009)
- Emerging Market Debt: Is the System Working Well Enough? (New York, 8-8 June 2009)
- Workshop II on “Debt, Finance and Emerging Issues in Financial Integration” (New York, 8-9 April 2008)
- Workshop on “Debt, finance and emerging issues in financial integration” (London, United Kingdom, 6-7 March 2007)