In September, a resolution on a legal regulatory framework for a sovereign debt restructuring mechanism [SDRM] was overwhelmingly endorsed by the UN general assembly, with 124 countries voting in favour. Only 11 countries voted against the non-binding motion, including the US and the UK, with 41 abstentions.
Argentina has driven the UN push since its own default crisis in 2001, which provoked demands for the SDRM at the time, but was rejected by richer countries. Developing countries have long advocated that an international resolution mechanism should operate independently from debtors and creditors, including the IMF. Tim Jones of UK-based NGO Jubilee Debt Campaign said: “since the IMF is itself a major lender, giving it the job of resolving debt crises is like making the prosecution in a court case both judge and jury.”