In News:

At the 16th United Nations Conference on Trade and Development (UNCTAD16) held in Geneva, the Sevilla Forum on Debt was officially launched — marking a major international step towards tackling the global sovereign debt crisis and promoting fair, sustainable debt solutions for developing economies.

About the Sevilla Forum on Debt

• Launched by: The Government of Spain, with support from UNCTAD and the UN Department of Economic and Social Affairs (UN DESA).
• Event: Announced at UNCTAD16 (October 2025) in Geneva.
• Part of: The Sevilla Platform for Action, building upon commitments made during the Fourth International Conference on Financing for Development (FfD4).

Aim and Objectives

• To create an open, inclusive, and action-oriented space for dialogue on sovereign debt reform.
• To connect all stakeholders—creditors, borrowers, multilateral institutions, civil society, and academia—towards developing innovative, fair, and sustainable debt management frameworks.
• To track and implement the debt-related initiatives agreed upon in the Sevilla Commitment, ensuring political pledges are translated into institutional mechanisms.

Context: The Global Debt Challenge

• Public debt worldwide reached $102 trillion in 2024, with developing countries accounting for $31 trillion of that burden.
• Developing nations paid around $921 billion in interest payments — surpassing their combined public spending on health and education.
• According to UNCTAD, over 3.4 billion people now live in countries where debt servicing outweighs essential social expenditure, underscoring the need for systemic reform of the global debt architecture.

Key Features of the Sevilla Forum

• Bridge Between Borrowers and Creditors:
  • Acts as a neutral hub facilitating candid discussions between debtor nations and lenders.
  • Encourages transparency, responsible borrowing, and fair lending practices.
• Catalyst for Global Action:
  • Sustains political attention on debt-related agreements under the Sevilla Commitment.
  • Supports coordinated multilateral action to ensure predictable and equitable debt governance.
• Knowledge Exchange Platform:Brings together policymakers, economists, and institutions to develop and share innovative debt management solutions, including debt-for-climate and debt-for-development swaps.
• Linked Initiatives by Spain:
  • Debt Pause Clause Alliance: Promotes temporary suspension of debt payments for nations in crisis.
  • Global Hub for Debt Swaps: Facilitates conversion of debt obligations into sustainable development investments.

Significance

• For Developing Countries: Offers a collective voice and platform to advocate for debt justice and reform of the global financial architecture.
• For Global Governance: Reinforces multilateralism through UN-led cooperation between creditors and borrowers.
• For Sustainable Development: Aligns with Agenda 2030 by linking debt relief with social and climate investments, particularly SDG 8 (Decent Work & Economic Growth) and SDG 17 (Partnerships for the Goals).

About UNCTAD

• Full Form: United Nations Conference on Trade and Development
• Established: 1964 by the UN General Assembly
• Headquarters: Geneva, Switzerland
• Mandate: To help developing countries leverage trade, finance, and technology for inclusive and sustainable development.
• Core Functions:
  • Economic and trade analysis
  • Consensus-building among nations
  • Technical assistance for policy and institutional strengthening
• Major Reports:
  • Trade and Development Report
  • World Investment Report
  • The Least Developed Countries Report