IEJ Sovereign Debt Working Paper Series #3
Authors: Ohene Ampofo-Anti, Charlotte Inge, Matthew Forgette, María Emilia Mamberti, and Kamal Ramburuth
The world is facing a deepening sovereign debt crisis that threatens socio-economic rights in low- and middle-income countries, particularly in the Global South. As debt repayments consume ever-larger shares of national budgets—surpassing spending on education, health, social protection, and climate action—the need for comprehensive reform becomes urgent.
IEJ’s Sovereign Debt Working Paper Series #3, developed with the Center for Economic and Social Rights, outlines how international human rights principles can guide the transformation of global debt restructuring frameworks. The current fragmented and opaque system fails to produce sustainable outcomes and often entrenches inequality. With no binding, comprehensive international legal mechanism in place, many restructuring processes overlook the rights and development needs of debtor nations.
This paper makes the case for a multilateral, statutory debt restructuring mechanism rooted in human rights standards. It details normative principles—including the right to self-determination, equality and non-discrimination, good faith negotiations, and essential socio-economic rights—that must underpin future frameworks. These principles demand a shift away from creditor-dominated processes toward more equitable, transparent, and accountable approaches.
Key recommendations include integrating human rights assessments into debt sustainability evaluations, ensuring minimum social spending regardless of fiscal constraints, and securing meaningful participation from affected communities. Crucially, the paper argues that the United Nations is best positioned to host such a mechanism, given its global mandate, technical capacity, and focus on human rights and equity.
By advancing a debt restructuring approach aligned with human rights, countries can not only navigate crises more fairly but also safeguard the public goods essential for long-term, inclusive development. Reforming the global debt system is not just a financial necessity—it is a human rights imperative.
Read the full paper to explore how rights-based debt reform can help realise justice and dignity for all.