Underscoring the human rights consequences of the evolving debt crisis (see Observer Spring 2024, Autum 2023) and the fact that the Sustainable Development Goals (SDGs) are widely off-track, on 11 February the UN Human Rights Council (HRC) held its Seventh Intersessional Meeting on Human Rights and the 2030 Agenda. The event’s opening remarks, including those of Volker Türk, the High Commissioner for Human Rights, highlighted the need to use the Fourth UN Financing for Development (FfD4) conference, which will take place from 30 June to 3 July, to reform the international financial architecture (IFA) so it proactively supports the realisation of human rights. Mr. Türk stressed, “the current debt architecture is broken – which is contributing to a global human rights crisis…debt servicing must not jeopardize a State’s international human rights commitments – which are a legal requirement.”
The meeting sought to provide space and share perspectives on human rights and the implementation of the 2030 Agenda, explore further measures that the HRC could take to support accelerated realisation of the SDGs and strengthen financing, and identify opportunities for improved cooperation between the High-Level Political Forum on Sustainable Development (HLPF) and human rights. The day comprised two thematic discussions: “Reforming the global debt architecture to accelerate progress on human rights and the SDGs” and “Applying a human rights lens to going beyond GDP.”
Participants reiterate urgent need for international sovereign debt architecture reform
The debt architecture reform session, moderated by the Bretton Woods Project, explored how human rights norms and standards can guide the global debt architecture review called for in the Pact for The Future (Action 50) through a discussion between a senior Human Rights official, two ambassadors from the Global South and a civil society participant from Sri Lanka. The panel discussion was supplemented by reactions and statements from State representatives.
Debt servicing must not jeopardize a State’s international human rights commitments – which are a legal requirementVolker Türk, UN High Commissioner for Human Rights
In their interventions, member states emphasised that the debt crisis is a human rights crisis which can only be solved through a shift in the economic paradigm and reform of the debt architecture to enable states to deliver on their human rights obligations, including preventing retrogression, maximising available resources for economic social and cultural rights, countering discrimination and inequalities.
Panellists agreed that the current international debt architecture, underpinned by the IMF and World Bank, the G20 Common Framework and the Global Debt Sovereign Roundtable, has failed to respond to the evolving debt crises. They highlighted the need for significant reforms in all aspects of relevant processes, from debt sustainability analyses (see Inside the Institutions, What is the World Bank & IMF debt sustainability framework for low-income countries?) to debt restructuring negotiations, and noted challenges posed by the IMF’s inherent conflict of interest as creditor and key player in the debt sustainability analysis and restructure processes. There was consensus on several additional issues, including the urgency to reform the use of Special Drawing Rights (see Briefing, Reconceptualising SDRs as a tool for development finance) and ending punitive IMF surcharges (see Observer Autumn 2024). The need to address the high costs of capital in the Global South, the urgency of reviewing and regulating the role of credit rating agencies and ensuring additional non-debt creating financing to support progress on the SDGs, including through multilateral development banks, was also underscored. Panellists stressed the urgency of ensuring the protection of human rights during times of crises and improved tax cooperation and domestic resource mobilisation.
Participants also emphasised the need to address the disparity of power within states and in the wider multilateral system between those charged with financial and fiscal management and those responsible for the human rights obligations. They highlighted the need for Treasuries and Ministries of Finance to incorporate safeguarding human rights into the formulation and implementation of economic policies and into their efforts to address the structural failures in the IFA. In that regard there was recognition that the HRC and broader human rights community must do more to develop concrete tools that states, multilateral institutions and civil society can use in debt restructuring negotiations, and in cases where the IMF undertakes debt sustainability analyses and designs its financing programmes, in order to ensure states are able to meet their human rights obligations.
