Open Letter to Ministers of Finance, Central Bank Governors, Governors and Alternate Governors of the World Bank Group and International Monetary Fund, and Leaders of International Financial Institutions
Ahead of the forthcoming World Bank Group and International Monetary Fund Annual Meetings, we implore leaders to urgently address the unsustainable debt challenges facing low and middle income countries and turn debt into hope.
The problem is clear: countries around the world are paying exorbitant debt servicing costs instead of paying for schools, hospitals, climate action or other essential services. Many of these countries are not formally defaulting on debt, but they are defaulting on development. African governments now spend an average of 17% of revenues on debt servicing. A cap of 10% in 21 countries could unlock enough money to provide clean water and sanitation to roughly 10million people, as well as avert roughly 23,000 under-5 deaths each year.
Current action is inadequate and slow: so far, the G20’s plan to tackle this problem has relieved just 7% of the total value of external debt owed by at-risk, lower-income countries.
There are common-sense, effective and practical solutions that leaders can put in place to restore growth, stability and hope across the world.
We urge leaders to deliver meaningful debt relief now and prevent future debt crises through:
Urgently reducing current debt burdens and servicing costs, including the World Bank and IMF replenishing their debt relief funds, and ensuring that countries can access a range of debt relief options that fit their unique circumstances.
Innovation and reform to ensure fair and fast debt restructuring, using the existing policy toolkit of international financial institutions more effectively to avoid
World Bank and IMF financing being used to bail out the holders of unsustainable debts, supporting changes to debt legislation to discourage hold-out creditors, and reforming the Common Framework process to make it more efficient and fairer.
Reforming how the World Bank and IMF assess debt. They must conduct debt sustainability analyses (DSAs) that are transparent, accountable, accurately reflect risks, and incorporate development and climate needs.
Promoting strategic alliances amongst borrowers. Support a ‘Borrowers’ Club’ so that borrowers can negotiate from a position of strength and accountability as regards debt resolution and prevention.
Bold action on debt means more children in classrooms, more nurses in hospitals, more action on climate change, more jobs, more trade, and less need for aid. These are outcomes that serve the global interest. We call on you to act decisively and with ambition to unlock stability, growth, and hope for the years ahead.
Signed by:
Mariana Mazzucato (Professor University College London; Director, Institute for Innovation & Public Purpose), along with 23 other academic economists, commissioners and experts contributing to Healthy Debt on a Healthy Planet, The UNSG’s Expert Review on Debt, and The Jubilee Report.
For further information, see also:
https://www.theguardian.com/business/2025/oct/12/urgent-call-debt-relief-imf-world-bank-debt-justice
