(6th meeting) Preparatory Committee for the Fourth International Conference on Financing for Development, Second Session

Good afternoon everybody, Excellencies, distinguished delegates. It's past three o'clock and I like to start on time. So I call to order the sixth meeting of the second session of the Preparatory Committee for the fourth International Conference on Financing for Development. I now invite the Committee to continue its consideration of agenda item 4b, preparations for the conference, substantive preparations. This afternoon, the Committee will hold its sixth and seventh interactive discussions, first on debt and debt sustainability, and secondly on addressing systemic issues. So I now invite the committee to proceed to its sixth interactive discussion on debt. I'm opening or have opened the floor for the interactive discussion. So I can see that many have already pressed the button in order to request the floor. Please do so. I would like to remind speakers though of the time limit of three minutes for interventions in order to give all those wishing to speak the opportunity to take the floor. And if we have a very long list of speakers, we will count while the first ones speak, we may have to shorten the speaking time in order to hear from everybody. You know, of course, that there is a countdown clock on the screen to alert speakers when it's time to conclude their statements. And the microphone will be automatically deactivated when the time limit has elapsed. Can I also remind that speakers on behalf of groups should just inform the secretariat and we will give groups precedence in the order of speakers. But then it looks like we can start. I will start by giving the floor to the distinguished representative of the European Union to be followed by the distinguished representative of Yemen. EU, you have the floor.

Mr. President, the assessment that high global debt vulnerabilities in developing countries are among the challenges threatening the achievement of the SDGs, we strongly believe that stability oriented macroeconomic policies coupled with sound public debt management and debt transparency remain essential for maintaining debt sustainability. There is a need to step up the implementation of the G20 common framework for debt treatments. Recent progress shows that common framework delivers. We need to make debt treatment process under this framework timelier, and more predictable for debtor countries. We also support extending this framework for all countries that need it. We need to do more to ease liquidity constraints in vulnerable countries to prevent them from falling into debt distress. We support the ongoing work by the IMF and the World Bank on a three-pillar approach to support vulnerable countries facing liquidity challenges. We are in favor of promoting a better implementation of existing mechanisms, platforms, and initiatives instead of creating new ones. The priority today is not to create new debt relief instruments but to improve those that exist. We support the global sovereign debt round table, which allowed for progress on technical issues related to debt treatment by involving both creditor and borrower countries. The discussions in this round table could be extended to broader and more inclusive audiences, depending on the topics addressed. We strongly support the continued mainstreaming of collective action clauses in debt contracts. We welcome the ongoing review of the low income countries debt sustainability framework by the IMF and the World Bank to strengthen climate aspects in debt sustainability analysis. And we also support the call to further develop climate resilient debt clauses. Thank you very much.

I thank the distinguished representative of the European Union also for his brevity, and I now give the floor to the distinguished representative of Yemen, Asanaz, to be followed by the representative of the Democratic Republic of the Congo on behalf of the Africa Group. Yemen, you have the floor.

Thank you, Chair. Yemen appreciates the opportunity to contribute to this important discussion on debt and debt sustainability. We strongly support the elements paper emphasis on the need for comprehensive support for countries facing severe debt challenges and high debt servicing costs. As a country affected by prolonged conflict, Yemen has experienced significant deterioration in our debt servicing capacity while facing urgent needs for reconstruction and development financing. We particularly welcome the proposal for a debt sustainability support surface to help debt vulnerable countries, such a facility could provide crucial coordinated support through financial tools like guarantees, credit enhancement and debt swaps along with technical assistance for liability management. Yemen endorsement Yemen endorses the call for strengthen to strengthen the G20 common from work by expanding eligibility to high indebted countries currently in eligible standard eligible standardizing debt services suspension during negotiation and establishing clear timelines timelines we also support proposals to improve coordination among creditors and enhance technical support for debtor countries we also call for to enable us to have an automatic standstill standards of debt during crisis and conflict. The element paper rightly emphasizes the importance of debt transparency as we work to rebuild our systems for debt management and recording. We see great value in proposals to enhance debt transparency through improved disclosure, reporting and data reconciliation, including through streamlining existing debt database and creating a single global central debt data registry. We would like to highlight the particular challenge faced by conflict-affected countries in managing debt. The paper actually recognizes the need for capacity building initiatives to help developing countries to better manage their debt and effectively invest borrowed resources in relevant sectors. We encourage adding specific provisions for countries emerging from conflict in the proposed measures. Thank you.

I thank the distinguished representative of Yemen and I now give the floor to the distinguished representative of the Democratic Republic of the Congo on behalf of the Africa Group, to be followed by South Africa. You have the floor, sir.

Thank you very much. I have the honour to deliver these remarks on behalf of the African Group. In 2022, Africa's external debt, which is targeting $656 billion, amount to 28% of the continent GDP. Alarmingly, more than 60%, 68% of African countries now allocates more resources to debt servicing than to critical sectors such as healthcare. The African group welcomes some positive proposals in the LM paper, particularly the emphasis on standardisation, state contingent debt clauses during global crisis, enhancing the common framework for debt treatment, which despite its potential has fallen short due to procedural bottlenecks. bottleneck and the exclusion of many African countries in debt distress. However, let us be clear, incremental reforms are insufficient. The African group firmly believes that a transformative approach is needed specifically. We call on the establishment of multilateral sovereign debt. We urge the creation of a global debt authority. We reiterate our call for the suspension of IMF surcharges. While we acknowledge the reference in the LMN paper to initiating intergovernmental process to close gaps in the international debt, architecture, we need more tangible and action-oriented proposal. The zero draft of outcome document must set a clear pathway for structural reform. The African group is also encouraged by proposal in the element paper to enhance debt sustainability assessment and address the shortcoming in credit rating agency evaluation. These measures, if effectively implemented, can significantly improve the accuracy of debt risk assessment and reduce the financial burden placed on developing countries. Africa's debt challenges demand bold and transformative solutions that align with the principles of equity, sustainability, and shared responsibility. The financing for development process must rise to the occasion. Thank you.

I thank the distinguished representative of the Democratic Republic of the Congo. Just before I give the floor to the distinguished representative of South Africa, I would like to ask if there are any more groups that are requesting the floor. We have a list of more than 40 speakers wanting to speak in the next hour and a bit. And I'm going to have to cut the speaking time, but I would like to give groups the benefit of having three minutes if there are any groups left. Doesn't seem to be that. The speaking time will now be two minutes. I give the floor to the distinguished representative of South Africa to be followed by the representative of Germany.

Thank you very much, Chair. And let me begin by fully aligning ourselves with the statement delivered by the African group and also by thanking you and your co-facilitators for putting together what we think is a very comprehensive menu. For what we can do on, on debt, um, we, we support the recommendation for an intergovernmental process to agree updated principles on sovereign lending and borrowing to address the root causes of recurrent debt crises. With regard to paragraph two A or action two A, we, we, we should add. to that, that official creditors should also ensure that liability management operations, such as debt buybacks and debt exchanges, which are already entrenched practices in sovereign debt management, are not seen by credit rating agencies as an act of default or intention on the part of debtor countries not to faithfully honour their payment obligations. We can also support the idea of a protocol to UNCAC to make illegitimate debts unenforceable, and many of the other ideas that have been presented. We also agree that pre—emptive debt restructuring should be encouraged where needed, and we support debt suspension during common framework negotiations for debt treatment. In my final 30 seconds, I have a question, which is you make a reference to the Pact for the Future here and the debt review. that is being done, so I just wanted to ask how you envisage this would relate to the FFD4 process and if we might get some kind of report from the SG or feedback that we could take into account in developing the outcome document. Thank you.

I thank the distinguished representative of South Africa and we will have to come back with an answer to your question. And just also to remind everybody that since we have cut the time here, you are of course very welcome to send your full statement in writing through e-statements, just so I've said that. I now would like to give the floor to the distinguished representative of Germany to be followed by the representative of Australia.

Thank you, Chair. Germany welcomes the elements paper as a valuable contribution to ongoing discussions on debt sustainability. It reflects many priorities that Germany has been advocating for, especially further enhancing the G20 common framework and improving debt transparency. The G20's note on lessons learned from the first country cases serves as a useful starting point to further improve the framework by developing guidelines for the restructuring process, improving information sharing and ensuring consistent participation of private creditors. Where appropriate, national legislation can contribute to ensuring private creditor participation. Where needed, coordinated, faster and deeper debt restructuring should also be available beyond low income countries. We acknowledge the important role of the United Nations in global economic governance. To ensure coherence and avoid duplication, we believe that our efforts should build upon existing mechanisms and processes, particularly the G20 comm framework and Paris Club, as well as the International Monetary Fund and the World Bank. Also, the creation of additional intergovernmental processes and the proposal of a working group on design tools for monitoring and implementation risk diluting the focus and effectiveness of existing mechanisms such as the global sovereign debt roundtable. We also appreciate the emphasis on debt transparency and restructuring efficiency. We should abstain from creating additional data registries, but rather enhance existing structures, especially the debt reporting system, for instance, by integrating creditor data more efficiently. The paper's reference to state contingent clauses in various forms is welcomed. It is of importance for Germany that debt financing is climate and disaster proof. Germany reiterates its commitment to advancing practical and innovative solutions that ensure debt sustainability while safeguarding fiscal space for transformative investment in SDGs and climate goals. Enhancing debt sustainability assessments is an important step in this regard. Thank you.

I thank the distinguished representative of Germany and give the floor to the distinguished representative of Australia to be followed by the representative of Cote d'Ivoire.

Thank you, Madam Chair. Australia's comments are focused on four quick points. One, we must strengthen the common framework and increase participation for country and private creditors in debt treatment negotiations. The framework should be predictable, timely, ordered and coordinated and underpinned by the principle of comparability of treatment. Two, Australia supports enhanced public debt disclosure, which can improve debt reporting, risk pricing, and accountability for both creditors and borrowers. Australia advocates for greater debt transparency through initiatives like the World Bank's sustainable development finance policy. Three, Australia will join other lenders in offering climate resilient debt clauses in all bilateral sovereign lending from the end of 2025. We encourage further take-up of these clauses and other innovative mechanisms to support debt sustainability. And four, Australia welcomes the IMF and World Bank's three-pillar approach and welcomes the Debt Sustainability Support Service and advocates for tailored support to SIDS that acknowledges their unique context. Thank you, and I look forward to discussing these important issues with everyone here this week.

Madam President, the use of debt for financing for.

Development is a very important issue. is a path of economic and social policy. However, the reimbursement conditions worsen the vulnerability of indebted countries because of the priority of reimbursing debt. And that's why my country calls for a reform of the international financial architecture to take into account the adoption of measures that include the position of multilateral development banks. for granting long-term loans with different repayment and longer repayment periods. The aim is to improve the governance of this debt to strengthen confidence between bilateral and multilateral creditors and governance of countries in need. Also, this policy is appreciated by the credit ratings agencies with the rating of a high rating of Cote d'Ivoire, which is now fifth in Africa and is solidly in the BB category in the report before us. In conclusion, we would like to see the fourth financial development conference successful to allow for concrete positions to be adopted that meet the hopes and expectations that we have. Thank you.

I thank the distinguished.

Representative of Cote d'Ivoire.

And give the floor to the distinguished representative of Colombia to be followed by the representative of China.

Thank you, Madam Chair. Colombia wishes to express its gratitude for the way in which this section on debt sustainability was structured. We believe that this structure should be retained in the zero draft that is to be presented, such as to ensure there is a proper distinction made between the measures required to guarantee sustainable lending and then to between those and the need to expand fiscal sustainability. fiscal space of those countries in debt and then the introduction of measures to manage countries in debt crises. These need to be separate and work on them needs to be complementary. Looking now at section two on the need for fiscal space. These needs are not simply those facing countries that are vulnerable or in crises. All developing countries require fiscal space to invest in SDGs. And as such, these proposals have to address all developing countries, including, and this includes all initiatives such as debt swaps, for example, all initiatives not only in terms of how our instrument will be used, but we also need to tackle the systemic problems that we need to address to foster use of these instruments. There needs to be a multilateral structure in place to foster the use of debt swaps. We hope that that will be in the text and we need to have a mechanism that limits transaction costs. There needs to be reference made in this section to rating agencies as part of this strategy. In section four, we wish to welcome the idea of incorporating risk and the impacts of climate change and the loss of biodiversity in debt analysis. And there is a report on the ramifications that debt has for climate action that emerged from an expert group in COP29. The speaker has been cut off.

I thank the distinguished representative of Colombia and now give the floor to the distinguished representative of China to be followed by the representative of Spain.

Chair, at present, developing countries are facing high challenges such as a shortage of high debt, and the aggressive monetary policy of certain countries have further exacerbated that service burden and the vulnerability of those countries. The debt issues is a development issue in essence, and international community should comprehensively assess the debt plight of developing countries, analyze the causes, prescribe the right methods, and address both symptoms and root causes. and development resources should be widely mobilized, the financing channel broadened, innovative financing methods adopted, and developing countries should effectively fulfill their ODS and climate finance commitments to help developing countries to capacity building, multilateral financial institutions and commercial creditors, which account for more than 8% of the sovereign debt of developing countries, should fully participate in debt treatment according to the principle

of common action and fair burden.

The World Bank and IMF should play a better role. And private, public-private partnership should be strengthened. And private sector finance active mobilized, that instruments such as debt swaps and climate debt releases clauses can play a complementary role. And it should be promoted on the basis of voluntary and case-by-case cases. China attaches good importance to debt problem of developing countries and has fully implemented the DSSI and the common framework. and we have relieved the largest amount of debt among the members of G20. China is ready to work with all parties to effectively, comprehensively and systematically promote a solution to the global debt problem and common development of all countries and the implementation of the G20 agenda.

Thank you.

I thank the distinguished representative of China and now give the floor to the distinguished representative of Spain to be followed by the representative of Honduras.

Thank you. Thank you, Madam Chair. The element paper includes a myriad of proposals that our country support. Allow me to underscore a number of them. We request an update of and the development of a global set of endorsed principles on sovereign lending which is responsible, and those principles should be drafted through an inclusive process. There is a debt registry that we need to include. The debt suspension clauses in loans with low-income countries need to be extended to disruptive circumstances outside of climate change. Official creditors need to provide coordinated and improved support in the management of liquidity and liabilities for developing countries. That is where the debt sustainability support service comes in. We also support the use of debt swaps in countries that are not in situations of debt distress. There should also be other principles incorporated that ensure that debt is acquired or assistance handed out taking into account social criteria and environmental criteria. Member States, we should draft a model law so that the MFC initiative can be incorporated into countries' domestic legislation. We should see credit rating agencies improve their mythology. The common framework needs to be reinforced, and we need to look at the suspension of debt payments during negotiations on the common framework. We should also what we're doing should have a positive impact on what the IMF is doing and should take into account current reform processes within the UN. We hope that all of these recommendations will see the light of day in Seville.

I thank the Permanent Representative of Spain for his statement and now give the floor to the distinguished representative of Honduras to be followed by the representative of Saudi Arabia.

Thank you, Madam Chair. The FFD4 is around the corner, and so we want to see in the zero draft the following reflected: the importance of reducing debt as a positive step forward in efforts to decrease debt distress and to increase fiscal sustainability in the long term; initiatives, global initiatives that is, on debt sustainability should have proper space and be addressed in a just fashion, as should all needs of developing countries. heavily indebted developing countries, including middle income countries. Emphasis should be placed on the situation of countries whose credit rating has been reduced by credit rating agencies. Many countries affected are countries that are still developing and criteria used to rate countries should be in line with and take stock of the multidimensional nature of vulnerabilities. The zero draft should also seek to further strengthen the common framework and its full, transparent, predictable, timely, ordered and coordinated implementation as a so-called middle-low income country. The restructuring of our debt is vital because public debt continues to be a challenge for us, particularly in terms of external debt. The appropriate management of our financial commitments to improve our fiscal sustainability is vital, as is our need to become less vulnerable to possible financial crises. We encourage those doing this work to ensure proper incorporation of the private sector and other stakeholders. Thank you.

I thank the distinguished representative of Honduras, and I now give the floor to the distinguished representative of Saudi Arabia, to be followed by the distinguished representative of Egypt.

Thank you, Chair. We note the proposals for debt clauses. However, it's important to note that such mechanisms may impose rigid conditions that limit fiscal flexibility. The concern is that the debt relief could face challenges if these mechanisms lack adaptability for economies that are transitioning or resource dependent. Debt sustainability frameworks should provide flexible approaches to account for diverse economic structures, ensuring that they remain inclusive and equitable. Strengthening the common framework also requires measures to reduce the stigma associated with debt restructuring and the impact for credit ratings. Lastly, the debt sustainability assessments should account for risks other than the climate and nature, for instance, health-related. Therefore, references related to climate and nature in the elements paper shall be omitted. Discussions on such topics is taking place elsewhere and this forum should not prejudge those discussions. Thank you.

I thank the distinguished representative of Saudi Arabia, and I now give the floor to the representative of Egypt to be followed by the United States.

Thank you, Chair. We thank the co-facilitators for their efforts in this section. However, we would have wanted to see more ambitious and concrete proposals here. We acknowledge the proposals in the text on enhancing the common framework to tackle its main limitations and make it fit for purpose. We do hope that this conversation moves forward during our discussions, knowing that there have been numerous proposals before regarding how to reform the common framework in various reports and fora, yet no significant steps have been taken to tackle its main shortcomings. We were looking forward to more ambitious and action-oriented proposals regarding the reform of the international debt architecture, to be specific in this text, including having proposals to create a multilateral sovereign debt workout mechanism and the establishment of a global debt authority. Debt distress can't continue to be handled through ad hoc workout mechanisms alone, particularly given the growing complexity of the debt landscape. It's also not enough to continue to propose only improving existing frameworks, which have so far failed to appropriately tackle this crisis. We see two references in this section to the IMF debt review to be carried out as mandated in the pact of the future. We consider that this will be a separate process taking place outside of the UN without inputs from Member States, and therefore we wouldn't consider that this document is the right place to mandate anything new to it, like we see in subpoint 1b, or referring to the results of the work expected as we see in 3f. So we would like the deletion of both references. We also recognize the proposals on enhancing debt sustainability assessment, but have concerns that this is envisaged to be incorporated only to relevant ongoing review by the IMF and World Bank, and think there is

-- I thank the distinguished representative of Egypt, and I now give the floor to the distinguished representative of the United States, to be followed by the representative of Tanzania.

The United States is committed to helping countries in debt distress restore debt sustainability and economic viability. We share the frustration regarding progress on some elements of the international debt architecture. Achieving improvements requires the participation of all creditors, including new and emerging bilateral creditors. Our coordinated and persistent efforts over the past several years have yielded meaningful progress, including notable IMF debt restructuring related policy reforms, and deliverables achieved in the G20 and in the GSDR. We've steadily expanded transparency, timeliness, and the efficiency of the debt restructuring process. In addition to these efforts to improve the common framework, we highlight the work underway at the IMF and World Bank as part of the three-pillar approach aimed at helping countries with sustainable debt to address their temporary liquidity challenges through domestic reforms and revenue mobilization, enhance concessional financing and efforts to lower debt servicing costs. Calls for new intergovernmental processes would undercut this important work and momentum to advance a faster and more predictable common framework and adoption of responsible lending and borrowing principles in finance tracks. Rather than working in silos, we could accomplish more of our shared interests and goals if we work together and develop synergy between our lines of effort. The UN can play an important role in mobilizing collective actions from all official bilateral creditors to accomplish these goals in the appropriate multilateral fora and to help amplify borrowers' voices in existing multilateral discussions on debt, especially in coordination with South Africa's upcoming G20 presidency agenda in 2025. I thank you.

I thank the distinguished representative of the United States and I give the floor now to the representative of the United Republic of Tanzania to be followed by the representative of Brazil

thank you chair debt sustainability is fundamental to achieving sustainable development and the United Republic of Tanzania emphasizes the urgent need for comprehensive reforms in global debt framework, which currently hinders progress towards achieving sustainable development goals. To this end, Tanzania proposed the following key actions. One, access to concessional financing is critical for addressing pressing development challenges in enabling investment. Two, inclusive debt restructuring mechanism, We advocate for efficient, inclusive, and equitable debt restructuring framework that ensure all creditor bilateral, multilateral, and private sector, private shares to share the responsibility for debt relief. Three, we call for innovative solutions such as debt for climate swap in the intersection of debt, climate change, and underdevelopment. Four, credit rating must be reformed to reflect countries' commitment to sustainable development, climate action, and social progress. And lastly, debt sustainability transcends financial management. It is integral to human development. We must collectively work together to global financial architecture that is equitable, inclusive, and responsive to needs of all. And in conclusion, Madam Chair, Tanzania reaffirms its commitment to collaborating with the international community to advance meaningful reforms that empower countries to pursue their debt aspiration.

I thank the distinguished representative of the United Republic of Tanzania. And I now give the floor to the distinguished representative of Brazil to be followed by the distinguished representative of France.

Thank you, Chair. Today, the debt crisis is perhaps the single greatest challenge for developing countries to achieve the SDGs. According to data from UNCTAD, service on external public debt reached 847 billion in 2023, compared to 223 billion in ODA that same year. In 2023, a record 54 developing countries, equivalent to 38% of the total, allocated 10% or more of government revenue to interest rate payments. 3.3 billion people live in countries that spend more on debt service than on health or education. We find ourselves in the absurd situation where the net capital flows are going from the poor countries, from the global south, developed countries in the north. This is unacceptable. Addressing this issue requires a comprehensive and multifaceted approach that considers not only debt relief but also building long term resilience. Urgent action is needed across three priority areas, strengthening debt crisis prevention, including through sound debt management and transparency. Finding solution for countries that face severe fiscal constraints, debt overhangs, and insufficient reforms to address underlying problems to invest in the SDGs. And thirdly, a more effective debt crisis resolution mechanism. We need to restructure the credit rating system, which is a key component in the high cost of capital in the developing world. We call for improved international debt mechanisms to support debt review, debt payment, suspensions, and debt restructuring when necessary. We recognize the need to consider a concrete tool to incentivize, encourage, or enforce the participation of private creditors in debt treatments alongside the official sector to ensure the comparability of treatment in Canada and Brazil to help push this agenda forward. Thank you, Chair.

I thank the distinguished representative of Brazil. Due to the high number of inscriptions received, the list of speakers is now closed and no further inscriptions can be accommodated. I now give the floor to the distinguished representative of France to be followed by the distinguished representative of Maldives.

Thank you. With a few comments on the current situation, the vulnerabilities linked to sovereign debt have increased in a certain number of countries. However, IMF analysis shows that these vulnerability remains lower than what was seen in the 1990s when the highly indebted poor countries initiatives was created. Finally, we'd also note that there are fragilities in short-term debt financing, which could be problematic for some countries facing situations. would like to focus on three responses that we support. Firstly, proposal number one, faced with the needs of indebted countries who are not in default but who need short-term refinancing, we support the option for having liquidity support for those who have engaged in reform programmes and we support the element paper on this. Number two, faced with over highly indebted countries, we'd like, we should continue to improve debt architecture around the common framework, the common framework reflects a new debt landscape and progress has been made in recent months with the common framework, for example, with Sri, Ghana and Zambia. or outside of it, as the case in Sri Lanka. Proposal three. Finally, France, as chair and secretariat of the Paris Club, is mobilized to improve the debt architecture and coordination between creditors and foster the creation of a common understanding between all stakeholders. This is why we propose that an annual dialogue be launched between the Paris Club and the UN, which will bring together the IMF and the World Bank as well. Finally, a cross-cutting comment, we'd like to make one point. We do not want to see the creation of new governance bodies or mechanisms, and we would think it preferable to use existing ones. Thank you very much.

I thank the distinguished representative of France, and I now give the floor to the distinguished representative of Maldives, to be followed by the representative of Algeria.

Thank you, Chair. Uh, to ensure countries can achieve long-term debt sustainability and fiscal resilience, improving debt management and transparency is essential. This can be accomplished through greater involvement of MDBs and IFIs in helping developing countries manage debt challenges and access more affordable financing options. Restoring debt sustainability requires a comprehensive and holistic approach. That includes sustained fiscal consolidation, robust economic growth, and the pursuit of additional concessional financing to replace more expensive borrowing options. MDBs must play a pivotal role in this effort by expanding access to concessional and semi-concessional finance and enhancing country credit profiles to mitigate high cost borrowing. Greater MDB involvement in credit enhan- enhancement and facilitating direct access to sustainable finance providers can reduce dependence on commercial international financial institutions, thereby ensuring more cost effective and sustainable outcomes. MDBs, MDBs can also play a key role in providing liquidity support and facilitating liability management. Innovative financial mechanism such as debt swaps and ESG bonds, offer significant opportunities for small island developing states such as the Maldives. The Maldives propose a debt forgiveness for climate resilience instrument that enhances climate resilience while reducing unsustainable debt burdens and reducing default risks. To achieve this, we require technical assistance and capacity building support. In this regard, we reiterate the importance of technical assistance and knowledge sharing, particularly in leveraging past experience in structuring debt swaps and ESG bonds. Such support is vital for governments seeking the most effective pathways to long-term debt sustainability and fiscal resilience. I thank you.

I thank the distinguished representative of the Maldives. And I now give the floor to the distinguished representative of Algeria, to be followed by the representative of Jamaica.

Thank you, Madam Chair. Algeria attached great importance to the forthcoming outcome document of the fourth conference on financing development and have carefully examined the element paper circulated previously by the co-facilitators. In light of this, we would like to highlight for the high debt levels, they divert scarce resources away from predictive investments in areas like education, infrastructure and healthcare that are critical for improving living standards and reducing poverty in developing countries. In this regard, I would like to highlight the following recommendations to be considered in the outcome document. First, the need to put in place an improved global sovereign debt architecture that is better equipped to preventively resolve unsustainable debt situations and provide timely debt restructuring processes. Second, the International Monetary Fund should suspend its policy of applying surcharges on the interest it charges to countries with high debt burdens. Third, the need to establish systematic debt relief operations to address the long-term vulnerabilities of developing countries. To conclude, we reiterate our support for the efforts of the co-facilitators and we look forward to further constructive discussions to produce an ambitious outcome document that reflects the priorities of all countries. Thank you.

I thank the distinguished representative of Algeria and I now give the floor to the distinguished representative of Jamaica to be followed by the representative of Morocco.

Thank you very much, Chair.

I have just three quick suggestions. One, for SIDS like Jamaica that are classified as upper middle income countries, I would suggest that we have access to increased concessionality in loans as we still face issues of low growth, high public debt, and susceptibility to exogenous shocks. Two, States that have a high debt burden could be encouraged to develop fiscal rules to facilitate a path for achieving debt reduction. And three, In addition to encouraging multilateral lenders to increase local currency issuances, the paper could also include a strategy to provide TA to SEEDS who wish to issue local currency in the international capital markets, particularly in the context of a possible stronger US dollar. While multilateral lenders may increase local currency loans, they may still impose limits, and satisfying the majority of local currency needs in the domestic market may result in a crowding out of the productive sector.

Thank you.

I thank the distinguished representative of Jamaica and I now give the floor to the distinguished representative of Morocco, to be followed by Ghana.

Thank you, Madam Chair. Excellencies, ladies and gentlemen, in a context where we're seeing reduced margin for manoeuvre in terms of budgets and the crises that have beset the world in recent years, countries' appeals have increased for a reform of the international debt architecture. That reform should ensure better access to finance and better, easier debt service. Today, our discussions provide us with an opportunity to develop clear guidelines for what we should do with our outcome document at the upcoming conference. Our goal is to put in place international financial mechanisms which meet the specific needs of various countries. Moreover, it would be useful that the outcome document in question we're able to address this problem of debt through three lenses. One, strengthening repayment capacity in the long term, measures to encourage countries to do so and support for them should be provided for in the document to be adopted in order to allow countries to return to healthy economic policies, preserve macroeconomic balance and ultimately build up their foreign exchange reserves. Innovative international mechanisms would be appropriate as material for the outcome document they should focus on the buyback of debt or measures for the restructuring of debt architecture. There's no need to recall the impact that the credit rating system can have on countries. The outcome document should propose tangible measures to define new parameters to assess countries' credit ratings. This should take account not only macroeconomic realities, but the potential for growth among African countries. Urgent liquidity needs need to be addressed. They should be taken into account in the outcome documents so that rapid responses to liquidity crises can be provided, and this is particularly relevant for several African countries. Thank you.

I thank the distinguished representative of Morocco. And I now give the floor to the distinguished representative of Ghana to be followed by the representative of Cuba.

As the Africa Group has made clear, debt is not an abstract issue. It's an existential challenge. We cannot afford to tinker around the edges or offer piecemeal solutions. Ghana alongside the Africa group calls for nothing less than a transformative approach, a comprehensive rethinking of how we address sovereign debt challenges. In this regard, we urge the establishment of a multilateral sovereign debt workout mechanism that ensures that debt relief is not a stopgap, but a step towards lasting economic stability. We call for the creation of a global debt authority and also for the immediate suspension of the IMF surcharges for nations already grappling with high debt distress. We also insist on enhancing the G20 common framework, shifting the focus from merely extending maturities or reducing interest rates to delivering real relief through debt cancellation. Let us not forget that debt burden is not merely an economic strain. It is a moral test. It asks us as a global community whether we would act with courage, conviction to ensure that every nation has a fair chance to thrive. I thank you.

I thank the distinguished representative of Ghana. And I now give the floor to the distinguished representative of Cuba to be followed by the representative of India.

A very good afternoon to you all. Thank you for giving me the floor, Madam Chair. Very good afternoon, colleagues. The question of sovereign debt has been characterized by the lack of a multilateral mechanism universal in nature and able to guarantee a timely focus to debt and negotiations on it that are just and transparent. Indebted countries are subject to a regime that is characterized by ad hoc case-by-case operations. This approach has been fostered by the narrow interest of a creditors and they're wishing to serve their own interests and efforts to address debt are fragmented. The IMF and World Bank are tackling debt, but they use these ad hoc instruments for creditors. And what's happening is we're not seeing a proper analysis of the links between debt sustainability and the need for financing for development. Institutions that have perpetuated debt cannot be those that issue recommendations to eradicate debt because what we'll be seeing the same thing time and time again, the G20 framework, for example, hasn't worked to date. Very few countries have been able to access debt treatment through it. Time frames and mechanisms are not clear and are very exclusive and marginalized people. We need to have an intergovernmental process within the UN to establish a multilateral inclusive mechanism in which developing countries have a voice and a vote. In our view, this section should focus and perhaps ultimately only establish the commitment that appears in G. Maybe that's all it should do. Thank you.

I thank the distinguished representative of Cuba. And I now give the floor to the distinguished representative of India to be followed by the Russian Federation.

Thank you, Chair. To facilitate effective debt resolution, global coordination is essential, including by stepping up the common framework's implementation in a predictable, timely, orderly, and coordinated manner. We support enhanced debt transparency through early collaboration between debtors and creditors, quick reconciliation of outstanding debt and stronger incentives for creditor participation. We suggest considering inclusion of state contingent debt clauses that are not covered by standard force majeure clauses in debt contracts, starting with official lenders on a voluntary basis, based on evidence, and in ways that do not translate into increased borrowing costs for vulnerable countries. Mechanisms such as CRDCs and debt swaps offer tailored solutions but require careful adaptation to individual country contexts. A one-size-fits-all approach is not feasible, as their success depends on effective design and implementation. Here, we would like to also express caution on the issue of debt service standstill, which may need further examination. Addressing debt crises requires a shift towards long-term solutions and preventative measures that are country-specific and voluntary. Frameworks like HRPC initiative and the DSSI are necessary but should be complemented with robust guardrails and strategies for debt reduction to avoid reliance on ad hoc solutions. Chair, we support the review of IMF World Bank's debt sustainability framework, which underscores the importance of aligning borrowing with productive investments and improving institutional transparency to ensure long-term debt sustainability. Thank you. We'll table the detailed statement. Thank you.

I thank the distinguished representative of India. And I now give the floor to the Russian Federation be followed by the distinguished representative of Bangladesh.

Thank you, Madam Chair. The addressing the debt of developing countries need to be comprehensive, sustainable, and we think it's the crucial importance of achieving the SDGs through external finance. There needs to be a balanced approach and a clear vision of the possible consequences. In this connection, a series of provisions contained in paragraph one on sustainable plan responsible lending and debt crisis prevention, we think are the same. As it seems, some of the provisions affect the sovereign rights of creditors and borrowers, the principle of sovereign responsibility of states for their own development, and practically they could have a negative impact on the readiness of creditors and borrowers to work together. We do not rule out the fact that proposed measures would lead to new obstacles in financing for development, which runs account, uh, runs counter to the declared goal that we've set ourselves and could only, uh, dissuade potential investors. approaches create unhealthy competition on development issues. As it appears, the debt and sustainability section needs fine tuning as a whole. One of the key reasons for the debt crisis is difficult access for developing countries to international financial markets and high cost of credit, which is linked to the activities of the credit rating agencies broadly. It is also important to therefore develop effective measures to address these debt crises and viable instruments need to be created to protect countries from external shocks and for the crediting within their national currencies. We support the G20 common framework here. We need to expand access for developing countries access to IMF resources and other resources in international finance institutions. Thank you.

I thank the distinguished representative of the Russian Federation, and I now give the floor to the distinguished representative of Bangladesh, to be followed by the United Kingdom.

Thank you, Madam Chair. My delegation would like to propose a set of concise and actionable recommendations. Advocate for a consolidated, globally endorsed framework on responsible lending and borrowing, ensuring partners accountability through inclusivity. Support the establishment of a unified global debt registry to facilitate standardized reporting and improve transparency in sovereign debt. Promote the incorporation of state contingent clauses in debt contracts, addressing issues such as climate change, pandemics, and other crises to mitigate fiscal stresses during emergencies. Advocate for scaling up debt swaps to fund SDG-aligned projects. Advocate for the provision of guarantees, credit enhancement, and other financial instruments by IFIs to lower borrowing costs. stimulate private sector investment in LDCs, propose the creation of a model law under the UN system to help member states implement fair and effective debt restructuring processes, urge the IMF and World Bank to incorporate SDG financing needs, climate risk, long-term growth potential into their debt sustainability frameworks. call for an open, transparent review process for the revised methodology, ensuring LDC-specific vulnerabilities are adequately addressed. Thank you, Madam.

I thank the distinguished representative of Bangladesh and now give the floor to the distinguished representative of the United Kingdom, to be followed by the representative of Indonesia.

Thank you, Chair. Effectively tackling unsustainable debt is critical to ensuring progress on the SDGs. Debt servicing costs are at their highest levels in 25 years and are crowding out spend on climate and development. 50% of low-income countries are in or at high risk of debt distress. We must both address immediate liquidity challenges and the underlying drivers of unsustainable borrowing from both creditor and borrower perspectives that have led to repeat debt crises. We support stepping up efforts to strengthen the existing debt architecture. The G20 common framework must be able to deliver debt relief for developing countries with unsustainable debt positions reliably, effectively, and swiftly. We continue to support strong private sector participation in restructurings and reiterate the importance of majority voting provision clauses in lending contracts to increase debtors' resilience and ensure more efficient restructurings when needed. We also call on all sovereign MDB and private creditors to offer natural disaster clauses by the end of 2025. We support the IMF and World Bank's leadership on assessing debt sustainability. This includes through the ongoing review of the debt sustainability framework, which should include integrating climate and nature risks and rewarding resilient investments. Like Australia and the US, we welcome the agreement at the World Bank and IMF annual meetings to pursue a three-pillar approach to tackling liquidity challenges and encourage its incorporation in the zero draft. We are committed to strengthening channels for engagement with the most vulnerable countries to shape the debt architecture. Tackling unsustainable debt is only one part of this commitment. We need to see faster and more ambitious reforms to the whole global financial system so it can better support countries to unlock the finance they need for climate and development. Thank you, Chair.

I thank the distinguished representative of the United Kingdom and now give the floor to the distinguished representative of Indonesia to be followed by the representative of the Netherlands.

Thank you, Chair.

Excellencies, distinguished colleagues, we would like to highlight the importance of ensuring that the document reflects the unique challenges and perspective of countries, particularly the developing ones. The global debt sector must not only provide technical solutions, but also recognize the socioeconomic context that heavily influence debt management and sustainability. Developing countries often face often face the dual pressure of financing immediate development needs while managing debt vulnerabilities. Expanding fiscal space for investment in SDGs requires innovative approaches to financing. In Indonesia, we have pursued creative solution such as blended finance mechanism, which combine public funds with private investment to mobilize resources for projects with significant social and environmental impact. Additionally, debt for nature swaps offer promising opportunities to align debt relief with environmental sustainability. Indonesia's forest and climate partnership with other countries with ties payments for forest preservation to emission reduction demonstrates how innovative financing can address debt servicing challenges while achieving environmental goals. These examples highlight the need for greater support to scale up such initiative globally. Moreover, while we support the strengthening of the 20 common framework, we are of the view that any enhancements to the framework should integrate principles of equality and fairness, ensuring that countries development priorities are not compromised. Addressing these aspects will foster

I thank the distinguished representative of Indonesia and now give the floor to the distinguished representative of the Netherlands to be followed by the representative of Antigua and Barbuda.

Madam Chair, let me thank again the co-facilitators for the elements paper. It cannot be said enough, I would say. The Kingdom of the Netherlands acknowledges the importance of sustainable debt management and the need for timely debt restructuring as fundamental to the FFD4 agenda. FFD4 should, in our opinion, connect and build on existing initiatives as much as possible, in particular the G20 common framework, and remove bottlenecks rather than set up new mechanisms. The Netherlands supports proposals to achieve greater transparency and accountability in the debt environment. There's room for improvement here, for example, through enhancing existing databases into a comprehensive debt registry at the international level and effective parliamentary oversight at national levels. Regarding the assessment of responsible lending, we would suggest building on and implementing the recommendations on sustainable lending practices and export credits and the G20 operational guidelines for sustainable financing. And lastly, capacity building remains key. The Netherlands recognizes the value of providing legal, financial and debt management support to low income countries. The Elements Paper explicitly mentions the African Legal Support Facility to which the Netherlands is one of the key partners. We very much welcome initiatives to build capacity for long term resilience. Thank you.

I thank the distinguished representative of the Netherlands and now give the floor to the distinguished representative of Antigua Barbuda to be followed by the representative of Iraq.

Thank you, Madam Chair. The notion that the UN should not pronounce on debt sustainability is one that Antigua Barbuda do not agree with. We therefore welcome the chapter on debt in the elements paper. More than 40% of SIDS are either highly indebted or nearing debt distress. A modified debt sustainability framework that incorporates climate risk and provides contingent debt clauses can help mitigate these risks and provide much needed physical space for countries like Antigua and Barbuda. A multi-layered debt relief approach that includes debt swaps, reprofiling, and restructuring has been shown to reduce annual debt servicing and reduce total debt stock significantly. The established the said debt sustainability support service. which uses a layered approach to debt relief, including contingent clauses and debt swaps. We are pleased to see its inclusion in the Elements Paper. While this was a SIDS initiative, the DSIS can be expanded to other developing countries, including LDCs, and provide a more holistic support structure. The DSIS must be a tangible outcome from FFD4. There's a need to improve the debt architecture for quicker, fairer, and deeper debt resolution to restore countries to a path of sustainable development. Additionally, there's a need to create an automatic debt service cancellation mechanism for countries like Antigua and Barbuda when hit by qualifying climate disasters to enhance physical space and credit worthiness. The reform of the credit rating agencies is paramount for debt sustainability. SIDS endure borrowing cost of up to 12% and are required to pay the principal within just 10 years. This creates an inequitable financing system where the debt repayment burden on SIDS is 14 times greater than any other group of countries. Essentially, SIDS must shoulder significant cost under far more stringent terms by the credit rating agencies. Reforming, therefore, is essential in debt sustainability.

I thank the distinguished representative of Antigua and Barbuda and now give the chair to the distinguished representative of Iraq to be followed by the representative of Nigeria.

Thank you, Chair.

We'd like to insist on the importance of a flexible framework for debt management in order to best adapt it to the needs for development and to increase opportunities for growth and investment. The debt sustainability initiatives should take into account risks, including risks to long-term development. These evaluations should also take into account the economic and social aspects which impact stability and investment should be strengthened which then builds state capacity to address external or foreign difficulties, challenges. We would support the appeal to strengthen sovereignty while creating multilateral mechanisms to restructure debt through practical methods in a simplified way, while also building capacity in developing countries so that this can be an effective and sustainable process. Mechanisms should also be created to alleviate the debt burden, all the while addressing the root causes of debt. and the aim being to make it easier to have sustainable economic growth in developing countries. Thank you.

I'll give the floor to the distinguished representative of Nigeria to be followed by the representative of Pakistan.

Thank you, Madam Chair. At the outset, let me align our statement with that delivered by the Democratic Republic of Congo on behalf of the Africa Group, and I wish to make the following remarks. Debt remains a critical challenge, particularly for the broader developing world, as governments have continually allocated significant portions of public funds to debt servicing. In our joint statement with Egypt and Pakistan, we emphasize the need to initiate negotiations for a multilateral legal framework for debt restructuring that will ensure fair and transparent processes and prioritize development objectives. We further support the creation of a multilateral sovereign debt workout mechanisms and the establishment of a global debt authority alongside reforms to exert sustainability analysis, all with a view to place development as a core of fiscal decision making. Accordingly, Nigeria urges the FFD4 process to address the following: one, debt relief and restructuring by expanding and reforming current debt relief mechanisms to ensure timely action for countries. combating illicit financial flows, countries lose significant resources annually to IFF. So we therefore call for stronger international cooperation to recover these funds and ensure they are reinvested into development. Furthermore, we reaffirm the need for credit rating reforms as establishing a public credit rating agency under UN auspices would promote transparency and fair access to financial markets for developing countries. Finally, Nigeria advocates for enhancing the common framework to ensure...

I thank the distinguished representative of Nigeria, and I now give the floor to the distinguished representative of Pakistan, to be followed by the representative of Kenya.

Thank you, co-chairs, for your efforts. We feel that the elements paper on the debt section is currently weak. We cannot rely on ad hoc existing frameworks alone, nor on ephemeral promises to strengthen them, and neither on waiting for the outcomes of a review on which we have no clarity and no control over, especially on its timing. We do support COFAX, the recommendations you have included for reforming the common framework. However, prior experience has taught us that many similar recommendations never see the light of day with the excuse that the UN does not possess the mandate to dictate specific reforms on frameworks outside of the UN. Hence, for us, the main outcome of this action area should be the strengthening of the role of the UN in the area of debt. Our proposal in our submission with Nigeria and Egypt is the creation of a sovereign debt workout mechanism under UN auspices. This could include a standing intergovernmental platform or process, as well as a sovereign debt authority. This could perform various functions. It could aid intergovernmental deliberations to develop principles on responsible sovereign lending and borrowing. It could provide a space for borrowers to discuss technical issues, coordinate approaches, and share information and experiences. We do not understand why the functions performed by the sovereign debt roundtable could not be performed here under the General Assembly, where all developing countries are equally represented. A sovereign debt authority would support this intergovernmental platform. Our detailed proposal on this will be sent in writing. We are greatly concerned by the lack of any reference to debt relief or debt cancellation in this entire section. We also believe we need to find a way to deal with the issue of multilateral debt. In conclusion, co-facilitators, we cannot wait for the outcomes of reviews or frameworks over which highly indebted developing countries have no control over. We need to move beyond creditor-centric frameworks. An intergovernmental UN mechanism can ensure this. I thank you.

I thank the distinguished representative of Pakistan and now give the floor to the distinguished representative of Kenya to be followed by the representative of Vanuatu.

Thank you, Chair. We cannot talk of fostering debt sustainability without an enabling environment for economies to access finance in a fair manner outside multilateral institutions. Further, debt should be demand-driven but not supply-driven, since supply-driven debt worsens the debt situation of debtor countries. On the elements paper, we wish to have the following issues taken into consideration. One, the differential treatment in accessing finance extended to African economies through than normal interest rates based on risk profiling which are deterrent factors and contribute to unsustainable debt this needs to be addressed in the ffd4 outcome document to address the differentiated interest rates applied to African economies visavi other economies in accessing funding from the international capital markets and international financial institutions three official creditors are not best placed to provide coordinated liability management support to developing countries. This is because of conflict of interest and may not be effective. This should be left at the discretion of debtor countries. Four, commitment on review of credit rating agencies methodology to remove bias towards developing countries country ratings. Five, country ownership and leadership should be respecting in sourcing for debt by debtor countries. Six, principles or non-negotiable terms of both multilateral and bilateral lenders to be reviewed to make debt more accessible with the low servicing costs, for example, conditions like commitment fees. And lastly, capacity support on debt sustainability analysis and effective public debt management. I thank you.

I thank the distinguished representative of Kenya. I now give the floor to the distinguished representative of Vanuatu to be followed by the representative of Lebanon.

Thank you, Chair. The importance of the discussion on debt and debt sustainability for SIDS cannot be overstated. Climate change, rising sea levels and extreme weather events are not distant concerns for SIDS. They are daily realities. Many SIDS have been forced to take on crushing levels of debt to finance their recovery from climate-related shocks, which are becoming more frequent and severe. Between 2000 and 2022, debt levels in SIDS rose from 42.3% of GDP to around 60%. In order to live up to the commitment to leave no one behind, the outcome document of LFD4 must seek to break the cycle of crisis and recovery that many seats find themselves in. Debt relief or restructuring is crucial for creating the necessary fiscal space for SEEDS to grow and make progress towards the SDGs. For now, calls for support from donor partners to access technical assistance and build capacity to enable better debt management. efforts will fall short without meaningful progress to improve debt transparency. We call for the FFD outcome document to explicitly recognize that underpinning the debt crisis in SEEDS are structural vulnerabilities which are beyond the control of SEEDS governments. The Antigua and Barbuda agenda for SEEDS adopted at the fourth international conference on SEEDS which took place earlier this year provides our sound base. It is also committed to consider how the MFI could be incorporated into existing policies and practices for debt sustainability. We also note that the current credit rating methodology do not adequately consider the unique vulnerabilities of SEEDS, leading to inadequate ratings and higher borrowing cost. We call on credit rating agencies to reform their methodologies to enhance SEEDS access to international capital markets, support their long-term growth and climate resilience. Thank you.

I thank the distinguished representative of Vanuatu and now give the floor to the distinguished representative of Lebanon, to be followed by the representative of Madagascar.

Thank you. Thank you, Madam Chair. Lebanon wishes to thank the co-facilitators for their efforts in drafting this section on debt and debt sustainability, as it highlights the financing challenges that developing countries face in light of increasing debt distress, the urgent need to address debt sustainability, and the elevated debt burdens. The international financial system and the global economy are severely impacted by increasing debt vulnerabilities, threatening the financial stability, especially in developing countries. And in addition, we would like to remember in this regard, since we only have two minutes, we're just going to reflect some elements, that developing countries, including middle-income countries like my country, face a lack of essential support and access to both concessional and non-concessional financing, making it more difficult for them to manage their increasing debt burdens, as well as to tackle climate vulnerabilities and social inequalities. In order to achieve sustainable development goals, we should improve the global sovereign debt architecture. We need to have an inclusive participation of developing countries. In this regard, we know that the global initiatives on debt sustainability does not address sufficiently the needs of highly indebted developing countries, including, of course, middle income countries and my country. This issue needs to be reflected in this paper in a more ambitious way, as well as we need to focus on how to develop a more effective debt crisis resolution mechanism. In this regard also, uh, it is vital to find solution to enable indebted developing countries to invest in sustainable development calls. Furthermore, we should take concrete measures to assist developing countries in overcoming challenges related to technical assistance, for example. Lastly, as reflected in the Elements paper, we welcome the creation of and support existing platforms for borrower countries to discuss technical issues, coordinate approaches and share information and experience in addressing debt challenges, as reflected in the paper. And we look forward just to hearing from you on how you will proceed on this matter.

I thank you.

I thank the distinguished representative of Lebanon and now give the floor to the distinguished representative of Madagascar to be followed by the representative of UNCTAD.

Thank you, Chair. My delegation aligns itself with the statement made by the Democratic Republic of Congo on behalf of the African group. In 2024, a growing number of low-income countries are facing debt distress or are facing a higher risk of debt. According to most recent debt sustainability analysis from the IMF for low-income countries, 10 countries are facing debt distress and 52 others are facing a moderate or high level of debt. Out of these 62 countries, 40 of them in Africa. This situation has been exacerbated by global shocks, which has led to an increase in the level of debt across the continent. What are the consequences of growth and development then? High levels of debt and cost of debt servicing are a major obstacle to sustainable economic growth in the long term in many African countries, and this limits spending in essential areas such as health, education, infrastructure, and this then compromises progress towards the SDGs. Therefore, we would insist on the fact that discussions should focus on the increase of access of LDCs to concessional finance, cancellation of accumulated arrears, improving international mechanisms for debt alleviation, reducing cost of borrowing, and on sovereign borrowing. This is perhaps a message that's already been shared in previous meetings on financing for development, however, it's important to insist on it. and reiterate this message during this session too. Thank you very much.

I thank the distinguished representative of Madagascar.

To the distinguished representative of UNCTAD to be followed by the representative of Red Latinoamericana por Justicia Economica y Social, Latinidad.

Excellencies, according to UNCTAD calculations, At least two-thirds of developing countries experienced a deterioration in their external debt sustainability between 2017 and 2023, for the simple reason that the cost of servicing their external debt increased at double the rate.

Of the increase in their export and remittance earnings.

In a similar fashion, More than two-thirds of developing countries experienced a worsening of their public sector debt sustainability over this period.

Because their interest costs on government debt increased at a faster rate than government revenues. While these debt sustainability trends do not mean all of these countries are in imminent danger of default.

The scale of the problem is significantly larger than is suggested by a narrow focus on the Poverty Reduction.

And Growth Trust eligible countries.

While the number of the PGRT countries at high risk of or in debt distress has remained.

Stable at 34 for two years, 28 of them, or 82%, have been stuck in this situation since at least 2019.

Excellencies, the system is not providing a way out for them.

Addressing the systemic reasons behind these data is what lies ahead for us at FFD4.

It is important to ensure that the solutions we propose, such as a sovereign debt workout mechanism, are consistent with a long-term vision of a reformed, development-focused international financial system, where development is the winner, not the loser. I thank you.

I thank the distinguished representative of UNCTAD and I now give the floor to the distinguished representative of Red Latinoamericana por Justicia Economica y Social, Latinad, to be followed by the representative of the South Centre.

Thank you very much. I am speaking on behalf of the civil society mechanism. The current debt crisis is unprecedented in nature. Developing countries have been weathering a debt burden that has been increasing as a result of the manifold crisis besetting the world and as a result of the scant will on the part of creditors to take effective measures to resolve the situation. Initiatives implemented by international organisations, both official and non-official, have not been of great help to heavily indebted countries. On the contrary, they've actually worsened the situation with short-term measures and measures that are based on a liquidity approach, and this includes countries that can be considered solvent through traditional debt measurements. But in fact, these countries are increasingly devoting income to debt services and that percentage is increasing for developing countries. This situation is unsustainable in every sense. It's been shown that austerity measures are not the solution. Far less are they market solutions to debt. Increasingly, these austerity measures take us further and further away from the goals we established here in terms of sustainable development. Consequently, we need other mechanisms which will help countries in the global South to emerge from the debt trap and achieve economic justice and financial sovereignty that will allow them to finance the SDGs, Agenda 2030 and the climate agenda. With this in mind, we welcome the statements made by delegations and also the contributions made to the element paper that propose a different alternative solution. They propose establishing a multilateral framework that addresses the aforementioned issues. From the civil society, we appeal to you for a framework convention on sovereign debt, one which will allow us to make progress in the right direction and ensure that the FFD becomes the appropriate forum in which to take just and transformative decisions. Thank you.

I thank the distinguished representative of Latinidad and I give the floor now to the distinguished representative of the South Centre to be followed by the representative for the Society for International Development Asian People's Movement on Debt and Development. But South Centre, you have the floor.

Thank you, Chair. Several developing countries are today facing increasing debt crises with their external debts growing twice as fast as those of advanced economies. Many developing countries are having to allocate a larger share of their budgets to debt servicing than to health, education, and climate change adaptation and mitigation. Interest rate hikes in systematically important economies have further worsened debt vulnerabilities in the past two years, leading to capital outflows, currency depreciation, and financial distress in the countries of the global south. Urgent action is needed to address these challenges. Key measures include improving communication from major central banks to enable developing countries to anticipate and mitigate the negative impact of rate hikes. Strengthening the global financial safety net, particularly through counter-cyclical financing from institutions like the IMF, can provide essential liquidity to countries at the time of need. multilateral lenders must reduce delays in financial assistance and offer more concessional financing, debt swaps and credit enhancements to manage commercial debt. Regional and public development banks should also complement these efforts. At the same time, reforming the current system for sovereign debt restructuring is vital. The G20 common framework cannot be considered as a reform of the international debt architecture. Expanding its country coverage, redefining its terms of reference, clarifying its present timelines, definitions and scope of creditors be necessary to increase its effectiveness. The FFD4 conference offers an important opportunity to countries to address these systemic gaps and weaknesses in the international financial architecture and to advance the policies and measures for promoting debt sustainability and macroeconomic stability in developing and least developed countries. Thank you, Chair.

I thank the distinguished representative of the South Centre and now give the floor to the distinguished representative of Society for International Development, Asian People's Movement on Debt and Development, to be followed by the representative of the IMF.

Madam Chair, I'm May Benaventura speaking on behalf of the Civil Society Financing for Development Mechanism. We wish to highlight shared views by Yemen, Egypt, Nigeria, Pakistan, Zambia, the African group, and several other member states on the need for a legally binding UN framework and mechanism in sovereign debt.

This speaks to a broad.

Acknowledgement of sovereign debt problems as profound and global, which therefore calls for substantive, long-term solutions that are arrived at through democratic, transparent, and inclusive processes with both lenders and borrowers at the table. We are thus concerned that the FFD Elements Paper and member states have endorsed the further strengthening of the G20 common framework for quicker, fairer, and deeper debt resolution despite evidence to the contrary. The G20 common framework goes no farther than seeing the debt problem as an issue of liquidity, when.

Clearly it is both a problem that is systemic and structural in nature.

Several member states, among them the Netherlands, France, and the European Union, also lauded the common framework, even as it excludes crisis-hit middle-income countries and continues to fail in providing timely debt relief measures and significantly reducing debt burdens.

Promoting the G20 common framework, which is short-term, an arrow in scope and lacks clarity and credibility can potentially undermine the credibility.

Of FFD4 in paving the way towards arriving at durable and strategic solutions to the debt problem. This is a risk that FFD4 cannot and should not take. Thank you.

I thank the distinguished representative for the Society for International Development Asian People's Movement on Debt and Development and now give the floor to the distinguished representative of IMF to be followed by the representative of the European Network on Debt and Development, Eurodad.

Let me respond directly to the question raised by the delegate from South Africa and implicitly by a few others. The recent invitation is a very important one. in the pact for the future for the IMF to carry out a review of the debt architecture was, I think, timely. Now, while the full-fledged review of the sovereign debt architecture is unlikely to be completed by the time of FFD4, we should have advanced several of our work streams on debt, which will ultimately inform the comprehensive review. This includes ongoing efforts through the G20 common framework, where we have put on the table a number of ideas. the global sovereign debt roundtable to improve further the debt restructuring processes together with actions to help increase resilience and prevent the buildup of unsustainable debt. We're also working on a stock taking of recent sovereign debt restructuring cases and are poised to reexamine the international architecture for resolving sovereign debt involving private sector creditors. In parallel, we are advancing with the World Bank the comprehensive review of the joint IMF World Bank debt sustainability framework for low-income countries, as well as our joint proposal to help countries whose debt is sustainable, but which face elevated debt servicing challenges that impede their development path. Obviously, the critical part of our agenda, and that's the three pillar approach that a number of people have pointed to. So as we prepare for FFD4, we are reflecting on how to bring all these elements together and how best to engage with our development partners. By the time we gather in Seville, we expect to provide a full update on this work through a formal document approved by our executive board. Thank you.

I thank the distinguished representative of the IMF and now give the floor to the distinguished representative of European Network on Debt and Development, Eurodad, to be followed by the representative of IFAD.

Thank you, Chair. Sovereign lending and borrowing conducted in a prudent and disciplined manner can promote growth and development, but irresponsible financing can have harmful consequences for the debtor country, its citizens and its trading partners. This is a quote from the UNCTAD Principles for Responsible Lending and Borrowing from 2015. We agree. Despite commitments in the Addis Ababa Action Agenda and repeated commitments since then, there are still no widely adopted principles for sovereign lending and borrowing. It is clear that current voluntary approaches have not improved the quality of financing. We are encouraged by the focus on this topic, both in the Elements Paper and attention in member states' input, as well as in this room just now. However, the ambition falls short of what is needed. We urge governments not to start a lengthy process to update the guidelines. Instead, the guidelines we have should be made legally binding and into enforceable instruments. Without a reliable and statutory framework for restructuring unsustainable debt, there is also no incentive to stop irresponsible lending and borrowing. Yes, borrowers should borrow responsibly, but creditors also need to know that they stand to take losses for bad lending decisions. This, I'm sorry to say, is not the system we have today. We also welcome the proposal in the Elements Paper to establish a single global central debt data registry. This would be crucial to address the current lack of transparency about government debts and restore much needed trust in governments. If the public is expected to pay, then the public must also be able to see which debts are taken out and on what terms they were entered into. So we propose to establish a public global debt registry independent from creditors and borrowers that apply to all lenders. Registering loans should be binding and debts not included in the registry should not be enforceable by national courts.

I thank you.

I thank the representative of the European Network on Debt and Development and now give the floor to the distinguished representative of IFAD who will be the last speaker on this topic.

Thank you, Chair.

We note that high debt distress limits countries' ability to invest in functioning agri-food systems, which are catalytic entry points to deliver on multiple SDGs. Debt distress of borrowing countries also limits their availability to borrow on concessional terms for productive purposes. We welcome placing solutions on the table for the most debt-distressed low-income countries, such as debt swaps to help free up domestic resources, and we welcome opportunities to look into this specifically in the agricultural sector, given links to multiple development outcomes.

Thank you very much.

I thank the distinguished representative of IFAD for her remarks and the brevity of them at this time. That was the last speaker. We are moving straight into the next segment, which is the interactive discussion on addressing systemic issues. The floor is open. You know what to do. Press the button. Approach the secretariat if you are speaking on behalf of a group, and we will give you precedence. We will again start with three minutes, and we will count the list of speakers and may have to shorten the time during the discussions. Okay, I think we seem to be ready. So let's use the time we have available and I will give the floor first to Uganda, speaking on behalf of the Group of 77 and China, to be followed by the representative of Brazil. Uganda, you have the floor.

Thank you, Chair.

I speak on behalf of the Group of 77 and China. The G77 and China thanks the co-facilitators for their work on this section of the elements paper, and we take this opportunity to reiterate some of the group's submission on this section in preparation for the zero draft. The group appreciates the recognition that the current architecture does not accurately reflect the diversity and complexity of the world and that the representation of the developing countries in international institutions is insufficient. In this regard, we insist on the need for an urgent and more ambitious reform of the international financial architecture, including international financial institutions and their governance structure, to be equitable and responsive to the financing needs of the developing countries to enhance their effectiveness and to broaden and strengthen the voice and participation and representation of developing countries in international economic decision-making, norm-setting and global economic governance, including the aim to accelerate the achievement of sustainable development. We call for realignment of quota shares to better reflect members' relative positions in the world economy while protecting the quota shares of the poorest members in IFIs and for the development by June 2025 of possible approaches as a guide for the quota realignment, including through a new quota formula under the 17th GRQ. We call for the rechanneling of unutilized quotas, existing and newly allocated special drawing rights from developed countries to developing countries most in need of liquidity and to regional development banks. We reiterate the call for the issue of a new general allocation of SDR with distribution to developing countries according to their needs. We insist on the temporary suspension of IMF surcharges for countries high risk of or in debt distress until a further comprehensive review of this policy is carried out. We call for the adoption of a new approach to debt sustainability analysis that puts development at its center. We also call for the reform of the credit rating system to ensure accuracy of risk assessment, transparency, and encourage investment in the sustainable development priorities for developing countries. Chair, we propose to establish a UN convened technical assistance program with the aim of providing indicative sovereign credit rating opinions for the member states among the 54 developing countries that do not currently have sovereign debt ratings. Including in conclusion, the G77 and China will continue to constructively engage in the FFD for intergovernmental consultations.

I thank you, Chair. I thank the distinguished representative of Uganda speaking on behalf of the Group of 77 and China, and I now give the floor to the distinguished representative of Brazil to be followed by the representative of Vanuatu.

Thank you, Chair. Brazil aligns itself with the declaration made by Uganda in the name of the G77 countries and would like to make a few comments in our national capacity. Although gender issues have been mentioned in the Elements Paper, there's another very important systemic issue that has not received the attention it deserves, which is the need to combat racism, racial discrimination, xenophobia, and related intolerance, and all their abhorrent and contemporary forms and manifestations. President Lula has even spoken of an 18th SDG, which Brazil has adopted voluntarily, namely the fight against racism and discrimination. Although this is often considered a 3C issue, it is also an inseparable part of the economic agenda. Sustainable development cannot be attained without policies that seek to promote inclusion and fight xenophobia. We kindly request the inclusion of this issue in the zero draft. The reform of the international financial system requires realigning IMF quotas, reviewing World Bank shareholding, and strengthening the global financial safety net. MDBs need to be strengthened and their capacity to finance the SDGs enhanced. The slow pace of reforming the governance of IFIs has caused significant frustration among developing countries, prompting calls for a stronger role for the United Nations in shaping the international financial architecture. Another key systemic issue is the need to strengthen language on combating poverty and hunger. We must address the current fragmentation of financing for food security and nutrition, which hinders effective implementation through small, short-term projects and a lack of coordinated priorities. In this context, we highlight the Global Alliance to End Poverty and Hunger, launched during Brazil's G20 presidency, which is open to all countries. This initiative not only mainstreams proven policy instruments, including targeted cash transfers, school meal programs, and support for family farming, but can also play a pivotal role in enhancing alignment and mobilizing increased financing for food security and nutrition. This is also a key systemic element for achieving sustainable development, which we would kindly request to be reinforced in our next document, our zero draft. Thank you kindly.

I thank the distinguished representative of Brazil, and I now give the floor to the distinguished representative of Vanuatu to be followed by the representative of India.

Thank you, Chair. I will focus my remarks on two issues of importance to Vanuatu and all small island developing states. Firstly, vulnerability. The Elements Paper notes the current global architecture does not accurately reflect the diversity and complexity of the world. SEEDS have long argued that major shortcomings is the lack of recognition of the unique vulnerabilities and development challenges of SEEDS, particularly in the allocation of concessional finance. Despite being among the most vulnerable countries to adverse impacts of climate change, including more frequent and severe climate-related shocks, SEEDS receive only a small proportion of ODA, face some of the highest debt burdens, and pay almost twice as much in interest on sovereign debt as developed countries. The Elements Paper refers to vulnerability as a label, but Vanuatu would like to see the outcome document go much further and address vulnerability as a systemic issue, engaging with a suite of ways in which a country's vulnerabilities impact its financing needs. The reform of the global financial safety net, as proposed in the Elements Paper, must have a sharp focus on vulnerable countries, in particular to ensure predictable financing for recovery from climate-related shocks. Like many states, Vanuatu faces a significant financing gap to address climate emergency while ensuring poverty reduction and sustainable development. Access to grant-based finance for adaptation development is an ongoing challenge exacerbated by restrictive eligibility criteria. For now, two welcomes the MVI and calls for the FFD4 outcome document to meaningfully progress to use as a criterion for access to concessional financing as a complement to existing policies and practices. The second issue I wish to highlight is representation global institutions cannot be effective if they are not representative. The new financing framework must be supported by a reformed global architecture and ensure equitable representation and participation of seats and all development countries in decision-making fora to deliver more effective, credible and legitimate institutions. In this regard, Vanuatu calls for the AFD4 outcome document to build on the commitments in the Antigua and Barbuda Agenda for Seas and recently adopted Pact of the Future. I thank you.

I thank the distinguished representative of Vanuatu, and I now give the floor to the distinguished representative of India, to be followed by the representative of Indonesia.

Thank you, Chair. The global economy, though remained resilient in the recent past, still faces multiple headwinds that are amplifying the challenge of maintaining financial stability while achieving inclusive growth and sustainable development. To make the international financial architecture more resilient to geopolitical situations, interest rate fluctuations and climate uncertainties, we re-emphasize following a multi-faceted approach focusing on promoting macroeconomic stability, improving global economic governance and strengthening regulatory frameworks. For strengthening regulatory reforms and macroeconomic stability, a nimble policy approach is needed, with growth supporting fiscal consolidation and careful management of inflation and financial stability, ensuring enough fiscal headroom to support development financing. Chair, to improve the global economic governance, we support reforming and recapitalizing the MDBs to meet the financing needs of developing countries through concessional finance, grants, and innovative measures such as risk sharing and guarantees. Cooperation on debt resolution and restructuring for heavily indebted poor countries is crucial for economic resilience. We propose a comprehensive approach with tighter regulations to address the financial stability risk posed by rising of non-banking financial institutions. We underscore that the IMF should be well-resourced and remain as the center of the global financial safety net to help countries tide over the debt challenges and address macroeconomic issues. Further, it is imperative to undertake governance reform of the IMF for better representation of EMDs and LICs. Chair, the geo-economic fragmentation is reconfiguring global trade and capital flows. In this backdrop, we call for international cooperation and capacity building to support developing countries more effectively and equitably during systemic shocks and make the financial system more stable. Thank you.

I thank the distinguished representative of India. And I now give the floor to the distinguished representative of Indonesia, to be followed by the representative of the United States.

Thank you, Chair, distinguished delegates. We thank the co-facilitators that the LMN paper highlight the importance of advancing the reform of international financial architecture. The outcome of FFD4 can be built upon recently adopted pack for the future that has outlined a number of initiatives to continue the reform of international financial architecture. The current architecture is unable to respond to increasingly high challenges stemming from rising catastrophic and existential risk. Therefore, the reform is needed to ensure their work is more efficient, more equitable, fit for the world today, and responsive to the challenges in closing the SDGs financing gap, particularly faced by developing countries. We also support the view on the need to enhance representation and voice of developing countries at international economic and financial institutions. We wish to add that there is also an increasing need to strengthen existing and establish more systemic links and coordination between the United Nations and international financial institutions at the highest level to allow synergies. In addition to the reform, we wish that the LMN paper also discuss the importance of addressing the direct impact of the system mysteries systemic risks to the people, especially policy recommendations that safeguard the people during the shocks. Learning from COVID-19 pandemic that taught us valuable lessons on a deep-rooted problem in our societies, which is the vulnerability of our existing social protection. In this context, the FFD needs to explore coordinated actions to support countries in applying a more adaptive social protections that builds capacity for people living in vulnerable situations in order to prepare, cope and adapt with potential sudden shocks such as pandemics and natural hazards and gradual climatic change. This is also in line with the existing discussion on the element paper that suggests the inclusion of climate risk and environmental sustainability into financial regulation. I thank you.

I thank the distinguished representative of Indonesia, and I now give the floor to the distinguished representative of the United States, to be followed by the representative of the European Union.

Thank you, Chair. The FFD4 outcome document should embrace the comparative advantages of different bodies in achieving the SDGs. We aim to prioritize UN effectiveness and efficiency in delivering for development, including by utilizing existing means of implementation rather than creating new structures. We appreciate that the elements paper welcomes the recent IMF review of surcharges, which reduced the cost of borrowing for members by about $1.2 billion while maintaining the fund's framework to safeguard the IMF's resources and underpin the revolving nature of IMF lending to its members. The United States recently delivered a $21 billion loan contribution to the IMF Poverty Reduction and Growth Trust, demonstrating our commitment to support low-income countries. We are committed to supporting the IMF to adapt to the changing landscape so that it remains a strong, quota-based, and adequately resourced institution at the center of the global financial safety net. We support other countries choosing to channel SDRs to the MDBs if a technically sound option exists. In lieu of a new general SDR allocation, we believe the current context calls for more targeted solutions. Steps regarding representation, resources, and strategic objectives at the IMF, World Bank, and other IFIs are the purview of the respective governing bodies of these organizations. We highlight their broad membership with 189 shareholders in the World Bank and 191 members in the IMF. We do not believe financial regulation is an appropriate focus for FFD4 and call attention to the Financial Stability Board and international standard setting bodies efforts, those with relevant technical expertise that have worked to enact significant reforms to improve financial regulation of banks and non-banks. Central banks and financial regulators may, within their mandates, support private investment by fostering a stable investment environment, conducting sound monetary policy, and safeguarding financial stability. We support efforts like those of the African Development Bank to support countries in improving data quality and availability to facilitate investment. In closing, we believe the official sector should maintain the principle of tech neutrality, including with regard to payment instruments, and we strongly support the G20 Payments Roadmap, which seeks to address the underlying legal and regulatory frictions in cross-border payments. With that, I thank you.

I thank the distinguished representative of the United States, and I now give the floor to the distinguished representative of the European Union, to be followed by the representative of Spain.

Thank you, Chair. We are actively engaged in the international financial architecture reform towards better addressing global challenges and ensuring delivery towards emerging markets and developing economies. We acknowledge the urgency of the IMF quota realignment to better reflect members' positions in the world economy. We welcome the decision to create a 25th chair at the IMF Executive Board and to include the African Union at the G20. which is enhancing the voice and representation of sub-Saharan Africa. We also look forward to a successful outcome of the upcoming World Bank Group shareholding review in 2025. Overall, negotiations and decision-making on IMF and World Bank governance need to be fully anchored in the relevant IMF and World Bank bodies. We also support ongoing work to strengthen diversity and gender representation of IFIs management and staff.

We welcome that the international community has exceeded the G20's

global ambition of 100 billion US dollars in special drawing rights voluntarily channeled by advanced towards vulnerable countries. We encourage additional countries to join this global effort while preserving the role of SDRs as an international reserve asset and respecting national legal frameworks. EU member states who pledged approximately US$37 billion are leading the way in transferring the resources to the IMF trusts. We welcome the IMF's review of its surcharge policy and of its concessional facilities, including the Poverty Reduction and Growth Trust. We also support the continued provision by the IMF of long-term financing linked to climate reforms via the Resilience and Sustainability Trust. In parallel, we need to foster the necessary private investments in climate mitigation, adaptation and transition. A last point with respect to MDB reform. We believe that MDBs should focus on the implementation of the G20 roadmap for better, bigger and more effective MDBs. We call on the MDBs to work better as a system, to make the most efficient use of concessional finance and to engage more systematically with the private sector through risk sharing initiatives. Finally, discussions on potential capital increases in MDBs should take place in their respective boards. Thank you.

I thank the distinguished representative of the European Union, and I now give the floor to the distinguished representative of Spain, to be followed by the representative of Australia.

Madam President, the Elements paper takes up a number of ambitious proposals that Spain supports. I am going to point to a number of them in this statement. Governance, first of all, we believe that the representation of developing countries should better reflect the reality of the world. their relative positions in the global economy. Consequently, the voice and representation of these countries in IFIs should be accordingly adjusted. We must also commit to improving the diversity of and gender balance in executive boards of international organizations. Spain is setting about achieving gender parity by 2030 in its governance institutions to strengthen the global network of financial security, I'd like to make the following points. In our view, the IMF should dispose of a larger pool of resources which is accessible to all countries without excessive structural conditions being attached to accessing that financing. There should be flexibility for rapid disbursement in response to shocks or emergencies. We encourage countries that are able to do so to commit to channeling 50% of special drawing rights to trust funds that benefit developing countries. These include the poverty reduction and growth trust or the resilience and sustainability trust. There should be proposals made for countries that can do so to re-channel their SDRs through development banks, there should be approaches that allow ad hoc reassignment of special drawing rights in such a way as to specifically respond to the needs of vulnerable countries during future financial shocks and crises. We're also in favour of seeing resources from the resilience and sustainability trust of the IMF being expanded to other priorities of partner countries beyond climate ones. We also welcome the review of the IMF surcharge policy, but there should be more ambition here, both in terms of reducing the surcharge and possible use of the resources generated from that policy. There should be stronger regional financial frameworks established and coverage gaps should be closed. Finally, to improve macroeconomic stability and financial regulation, there needs to be better coordination of our monetary policies and clear and transparent communications of changes to such policies to reduce negative effects on liquidity and capital costs. We also need to create an effective financial normative framework which tackles the social and environmental impact and we need to have short-term incentives for appropriate regulation of non-banking financial intermediaries, digital financial assets and crypto assets. There must be more transparent criteria used for credit rating allocation. Thank you.

I thank the distinguished representative of Spain, and I now give the floor to the distinguished representative of Australia, to be followed by the representative of China.

Thank you, Madam Chair. Australia's comments are focused on three quick points. First, FFD4 provides a valuable opportunity to prioritize reforms that enhance global economic governance by amplifying the representation and voice of developing countries in global decision-making processes. Two, as rightly emphasized in the Elements paper, we must commit to improving diversity and gender balance within international organizations. Australia also strongly endorses the Elements paper's call to strengthen transparency and accountability in decision making within international financial institutions. Three, FFD4 offers an opportunity to elevate social protection and inclusion as central components of sustainable development. Gender-responsive budgeting is a proven mechanism to promote more inclusive decision-making and equitable outcomes. We must also recognize the critical need to scale up financing support tailored to indigenous people, FFD4 should prioritize establishing and expanding financing streams that directly address the unique needs of indigenous communities, ensuring no one is left behind. Thank you.

I thank the distinguished representative of Australia, and I now give the floor to the distinguished representative of China, to be followed by the representative of France.

Madam Chair, Solving systemic problems requires the joint efforts of the international community. The current unjust and unreasonable international economic order undermines the sustainable development of developing countries, and unilateralism and protectionism are on the rise. We need to practice genuine multilateralism, strengthen solidarity and collaboration, advocate inclusive economic globalization, effectively address the imbalance amongst and within countries and achieve common development for all. China believes that FFD4, the outcome document, should emphasize the following points. We must accelerate the reform of the international financial architecture to better reflect changes in the global economic landscape to effectively enhance the representation and voice of developing countries. and to ensure their full participation in the decision-making of international financial institutions. We must accelerate the reform of the governance structure of the IMF and the World Bank, improve their financing capacity and efficiency, and review the World Bank's equity according to the timetable and roadmap agreed upon by all parties and adjust the quota share of the IMF. We must strengthen macroeconomic policy coordination and maintain the stability of the international financial market. Developed countries must effectively assume their responsibilities and prevent negative spillover effects of their monetary policy adjustments. We should improve the financial risk supervision system, strengthen cooperation in areas such as digital currency and taxation, and to build a strong global financial safety net. We should actively cultivate new productive forces, strengthen cooperation in digital transformation and integration of the digital economy and fiscal economy, and rule setting in emerging fields, ensure that emerging technologies such as AI are beneficial to all, and to create an open, inclusive and non-discriminatory environment for developing countries. I thank you.

Thank the distinguished representative of China. And I now give the floor to the distinguished representative of France, to be followed by the representative of Germany.

Madam Chair, France support an international financial architecture governance that would make it more effective, more equitable, and better adapted to the contemporary world. To this end, we encourage the strengthening or increased representation of emerging and developing countries within international financial institutions. This kind of strengthening must, however, be accompanied by a greater taking of responsibility on their part in terms of financial contributions for development and the fight against climate change, as well as a greater participation in multilateral frameworks and bodies. France also supports the work to increase geographic diversity and gender representation in boards amongst leaders and amongst the staff. Here we welcome the recent creation of a 25th seat for sub-Saharan Africa at the IMF. In terms of global security nets, we would recall the major changes that have been achieved in recent years. This proves that the international financial system can adapt and reform. France supported the general allocation of SDRs in 2021 and the mobilization of SDRs for countries that need them the most. France welcomes the achievement of more than $100 million of special drawing rights for the most vulnerable countries in June 2023, which led to the Paris Pact. And France also will hold its commitment to mobilize 40% of SDRs, encourage countries to do the same. France is open to explore potential new methods to increase the mobilization of these drawing rights for countries that need it the most. However, any new allocation must meet a need for reserves and France can only be cannot be in favour of a new allocation of special drawing rights or the implementation of a systemic allocation mechanism in case of a crisis. We welcome the conclusion of the review of overcharge and charges of the IMF in autumn 2024. which maintains the incentive function and preserves the financial solidarity of the fund, which was a long time coming. It should lead to reducing the cost of borrowing for IMF member states by 36%. We also welcome the recently approved reforms by the IMF to strengthen its capacity to support low-income countries, particularly via this programme. Thank you very much.

I thank the distinguished representative of France. And I now give the floor to the distinguished representative of Germany, to be followed by the representative of Canada.

Thank you, Chair. Systemic issues and the international financial architecture remain central to our discussions. Reforming the international financial architecture is an urgent step to ensure it becomes more fit for purpose, equitable and responsive, while amplifying the voice and participation of developing countries. Regarding the 2025 World Bank shareholding review, Germany welcomes the opportunity to enhance representation within the institution. While it is essential to make the bank more representative, the review should be mindful of the interests of its smallest and poorest members, safeguarding their voting power. While we are supportive of increasing the representation of developing countries, this should not compromise IFIs efficiency and governance via proliferation of additional positions. We encourage an approach where form should follow function to ensure effective decision-making processes. We strongly support enhancing staff diversity and gender balance as a step toward making international organizations more inclusive and representative. Strengthening the global financial safety net is another key priority. We welcome discussions on enhancing crisis response mechanisms, and we also encourage countries to strengthen their regional safety nets. As for regulation for a sustainable financial system, proposed language should respect the mandates of the relevant international institutions and build on their strength while refraining from measures that could create collateral damage. The incorporation of climate transition plans and climate stress testing into financial regulation represents a necessary step forward. Transparent and robust methodologies will help financial institutions align their portfolios with global climate goals while minimizing systemic risks. I thank you.

I thank the distinguished representative of Germany and now give the floor to the distinguished representative of Canada to be followed by the representative of the Russian Federation.

Thank you, Chair. Canada welcomes the recognition in the elements paper that the renewed global financing framework must contribute to the advancement of gender equality and the empowerment of women and girls in all their diversity. As seen in our own submission, this is indeed a systemic issue and not just a cross-cutting theme. We are pleased to see references to the importance of gender responsive budgeting and taxation, supporting women's economic empowerment, including access to financial services for women, strengthening gender disaggregated data, eliminating gender based price differentiation and the gender digital divide, and ensuring gender balance in the executive boards of international organizations. Nevertheless, gaps remain as the elements paper fails to acknowledge the power of gender lens investing and gender responsive climate finance. With climate finance growing globally, leveraging women's roles as consumers, workers, borrowers, entrepreneurs, and community leaders is imperative to advance climate goals. Additionally, there are opportunities to strengthen linkages with respect to investments towards gender inclusive peace processes in fragile and conflict affected settings and advancing the women peace and security agenda. Women's and girls rights organizations also need to be better represented as the world looks to a renewed global financing framework. Women's rights organizations are critical stakeholders in advancing gender equality and the empowerment of women and girls in their countries and communities. At the same time, they are critically under-resourced, receiving a mere 0.13% of total ODA resources worldwide. They are too often overlooked in funding decisions, which limits the impact and effectiveness of their development contributions. Canada urges all member states to ensure they are highlighted in the FFD4 outcome document, including in sections on domestic public resources and international development cooperation. Distinguished delegates, the evidence is abundant and it is clear. Nearly three quarters of the SDG targets are directly or significantly reliant on making progress on gender equality. According to the World Bank Group, if women earned the same as men over their lifetimes, the world could reap a significant gender dividend of $172 trillion. If the objective is generating more finance than addressing the high cost of inequality, including gender inequalities, is a clear solution. Advancing gender equality and the empowerment of all women and girls has a critical multiplier effect on poverty eradication and helps drive sustainable economic growth and development across countries and communities. Investing in women and girls in their education, health, and access to assets and jobs has a multiplier effect on society as a whole. We look forward to working together with all of you towards a successful FFD4 in Seville. Thank you.

I thank the distinguished representative of Canada and now give the floor to the distinguished representative of the Russian Federation to be followed by the representative of Saudi Arabia.

Thank you, Chair. If I may, on exceptional basis, I'll make statement in English. And I also appreciate that today our Presidium is led by women. On this section on addressing systemic issues, our delegation emphasizes that the role of international financial architecture should be comprehensive in nature, reflecting the actual state of the global economic landscape. We insist on improvement of the engagement of developing countries in decision-making process in international financial institutions. The current distribution of quotas and voting rights in the IMF still does not fully reflect the expanding role of developing countries in the global economy and does not provide sufficient access to the resources of the fund for member countries. Moreover, this reform should be done while protecting the shares of the poorest countries. Also, we would like to remind that language on improving diversity of the governing bodies should explicitly talk about geographical representation and emphasize that the main criteria for candidates should be professional skills and expertise and not the gender balance. In this section, we suggest reflecting following principles. First, sovereignty and immunity of participants and assets. Second, principles of impartiality, inclusivity, and transparency, including in the work of the IMF and the World Bank, providing for fair, just, and equitable process of decision-making, as well as unhindered access to financial resources. And third, principle of non-discriminatory and not politicized international economic cooperation. We are looking for some stronger language on ensuring transparent, unbiased, and objective credit ratings, supporting trust and reliability of those. And we find suggested references to incorporating climate transition plans and financial regulations to be unbalanced and too prescriptive. Thank you.

I thank the distinguished representative of the Russian Federation and now give the floor to the distinguished representative of Saudi Arabia to be followed by the representative of Pakistan.

Thank you, Chair. The document advocates for quota realignment and redistribution of voting power within the IMF and World Bank to enhance inclusivity. Saudi Arabia expressed its agreement on reforming IMF quota. IMF quota reforms should enhance equitable representation while preserving the decision-making influence of all contributors to global financial stability. We must ensure full implementation of the IMF Board of Governors Resolution number 66-2 from the 14th General Review of Quotas in 2010, to honor the commitments to reduce the number of executive directors representing advanced European countries in favor of emerging markets and developing economies. Following this change, maintain the resulting regional composition of the IMF Executive Board for balanced representation. These steps combined with the allocation of 1% of the European chairs, quota shares to EMDEs are crucial for enhancing the representation of EMDEs Furthermore, realignment should ensure the protection of shares for EMDEs and the poorest members. Furthermore, strengthening regional financial safety nets is emphasized as a complementary measure to global mechanisms. While Saudi Arabia actively supports regional financial stability, fragmentation between regional and global safety nets could undermine systemic cohesion. The IMF is adequately resourced. to the context that it managed to deal with COVID-19 shock effectively. Moreover, in 2021, there was a significant increase in SDR allocation to boost reserve for all vulnerable countries and increase the capacity to lend of the IMF. We support the invitation of issuing new SDRs to help address the developing country debt crisis only in case voluntary financial contributions is recognized in quota discussions. We need to adopt a phased approach to integrating sustainability while stressing the importance of ensuring adequate capacity building and regional adaptation. Thank you.

I thank the distinguished representative of Saudi Arabia and now give the floor to the distinguished representative of Pakistan to be followed by the representative of the IMF.

Thank you, co-chairs. We believe that this section is well formulated. We would focus on two key issues. First on STRs, we fully support the invitation for a new issuance of STRs and welcome the reference made to the 50% target for re-channeling. We would request that the language be made more direct with regards to calling on countries to commit to re-channeling of 50% of the 2021 allocation and also containing an outright commitment to issue a new allocation of STRs. In addition to welcoming the rechanneling pledges so far, we believe the outcome document should also track progress in translating pledges into actual rechanneling to developing countries. We also believe that in the outcome document, we must examine and consider the impediments to rechanneling through MDBs, considering that the IMF has already approved such rechanneling, but no SDRs, to our knowledge, have been rechanneled through this modality as yet. The formulation of vulnerable countries used throughout this section is not an intergovernmentally agreed one, hence we request it be changed to developing countries. Second, on credit rating agencies, we support the proposals made in this regard. In particular, we would support the reference made to creating a space for regular dialogue among member states, credit rating agencies, regulators, standard setters, and other public institutions. for a regular dialogue amongst these actors. We believe such a dialogue could enable more regular and structured dialogue in order to enhance understanding and close informational gaps the credit rating agencies may have about measures taken by developing countries. We believe such a dialogue could be housed under the GA or the ECOSOC and hope the zero draft contains this reference. We also support the reference to consistent regulatory regimes for rating agencies and hope the zero draft can provide some recommendation on how such consistent regimes can be formulated. And lastly, we support the reference to a public entity, which could introduce more competition in the credit rating marketplace. and we believe such an entity could be housed within the UN, perhaps under UN DESA, but we would need to agree on specific standards to ensure its independence. We hope that this idea of a public entity is also further elaborated in the zero draft and is not lost. I thank you.

I thank the distinguished representative of Pakistan and now give the floor to the distinguished representative of the IMF, to be followed by the representative of the African Forum and Network for Debt and Development, AFRODAD.

Thank you, Chair. The 80th anniversary of the Bretton Woods Conference is a good moment to take stock of the future of the world economy, multilateral cooperation, and the central role of the International Monetary Fund. And I can assure you there's a lot of thought going on in Washington, just as there is in New York on this important topic. I've already discussed the IMF's critical role in both domestic resource mobilization and the debt strategy during earlier dialogues, so let me now comment on a few other elements of our contribution to FFD4. Some of the IMF's most important contributions to FFD4 have now been agreed. The IMF executive board, as has been noted by a number of speakers, has recently agreed a set of important measures that will first safeguard the IMF financial strength underpinning its lending capacity. Second, reduce charges and surcharges by around 36%. And third, and this is really important given the Secretary General's push for more financing deliver a comprehensive package that more than doubles, that's more than doubles the concessional lending capacity of the IMF, that's the PRGT. And I'm sure FFD4 will want to welcome these very important developments. Importantly, these measures received unanimous support from all IMF members, all 191 members. This did not just happen. We had to work very hard for it and our staff iterated many times with our membership to deliver a result that in the end could work for all. Now these reforms come on top of the earlier creation of the resilience and sustainability trust that a number of speakers have talked about with its longer term lending terms and our efforts to channel SDRs to provide lending resources for concessional lending as well as potentially through and the multilateral development banks. For the IMF to do its job well, we must strive for inclusivity and fair representation. And work is ongoing with our board to develop possible approaches as a guide to better reflect members weight in the world economy, including through a new quota formula. And as others have mentioned, on November the 1st, our board welcomed a third director for Sub-Saharan Africa, strengthening Africa's voice in discussions. Finally, there is the IMF's unique role at the center of the global financial safety net. Since the onset of the pandemic, we have set records for both our total lending volume and the number of countries assisted. The 50% quota increase, which all members need to ratify, solidifies our lending capacity. And we will, of course, continue to...

I thank the distinguished representative of the IMF, and I now give the floor to the distinguished representative of the African Forum and Network for Debt and Development, AFRODAD, to be followed by the representative of Christian Aid.

Thank you very much, Madam Chair. I speak on behalf of the African Forum and Network on Debt and Development and the Civil Society Financing for Development Mechanism. We commend the efforts to pull together the elements paper based on over 300 submissions. Addressing systemic issues in FFD4 is more than rhetoric. It is about establishing norms and practices that restore trust in the multilateral system and more importantly address the fundamental inadequacies in present initiatives to address the polycrisis and move us meaningfully towards the SDGs. For example, the elements paper proposal on credit rating agencies calls for to create or find space for regular dialogue amongst member states, credit rating agencies, regulators, standard setters, long term investors and other public institutions. Initial discussions could address, for example, more appropriate rating actions during debt swaps and restructurings. This proposal, however, falls way short of expectations and bears little appreciation of the pervasive role that credit rating agencies that have been articulated by several member states, such as Indonesia, Yemen, Zimbabwe, the Group of 77 in China, and the Africa group throughout this week. Credit rating agencies are a deterrent to effectively addressing the debt crisis that is the major impediment towards SDG financing, given the crowding out effect due to debt service interest repayments. They disincentivize restructuring processes and dissuade countries from seeking assistance for fear of downgrades. Furthermore, the opaque and subjective methodology tends to create bias in ratings and increase the cost of borrowing from international capital markets. As such, civil societies strongly recommend a more radical and progressive approach to addressing the disruptive role of credit rating agencies, which undermines debt resolution. We therefore call, firstly, for the establishment of a universal intergovernmental commission to regulate credit rating agencies and the UN should lead in the further furthering of CRA supervision and regulation. The commission should further also study proposals such as establishing an international public credit rating agency at the United Nations and provide more transparent and equitable assessments of credit worthiness. And second, under the establishment of a UN framework convention of sovereign debt that has regulation of credit rating agencies as one of its pillars, in setting out both the principles and normative approaches to addressing the regulation of credit rating agencies. Thank you.

I thank the distinguished representative of the African Forum and Network for Debt and Development, AFRODAD. And I now give the floor to the distinguished representative of Christian Aid, to be followed by the representative of the Society for International Development, Bretton Woods Project.

Thank you very much, Your Excellencies. My name is Emma Bergesser with Christian Aid, and I'm also speaking on behalf of the CSO FFD mechanism. The Elements Paper rightly sets out that representation of developing countries in international institutions is insufficient. Yet we share Brazil's frustration at the incredibly slow pace of IFI governance reform and feel that the proposed measures for reform in the paper remain deeply inadequate, as they will fail to give greater voice and vote to countries in the Global South, especially within the Bretton Woods institutions. Today, the US and just the seven largest European countries and former colonial powers control nearly 40% of the IMF's vote shares, while 46 sub-Saharan African countries hold just 4.7%. That state of affairs meant that just one country was able to unilaterally block an SDR allocation for an entire year in the middle of a global pandemic crisis, and that when it was allocated, those countries most in need received the least. What's worse, the most recent IMF quota review has actually made it harder to increase the vote shares of developing countries in future reviews, while the starting point of the upcoming World Bank shareholding review is that some of the largest global north countries are overrepresented. In other words, given their undemocratic governance structures, when left to their own devices, the unequal distribution of power within these institutions means that they have not and will not deliver on democratizing global economic governance, only fostering more distrust and disenfranchisement between its membership and the notion that these institutions do not serve their membership even-handedly. We therefore call for a UN-led intergovernmental process to review and rethink the ecosystem of public development banks and international financial institutions, including a review of the mandates and governance structures of IFIs. And to address the inadequacies of the SDR system, we welcome the Elements Papers proposal to create a new playbook on SDRs that strengthens their role. This should include a rules-based approach to SDR issuance decisions and consider approaches that allow SDR allocations to respond to specific needs, such as decoupling the triple function of the IMF quota system. Thank you very much.

I thank the distinguished representative of Christian Aid, and I now give the floor to the distinguished representative of Society for International Development, Bretton Woods Project, to be followed by the representative of Geleris Instituto da Mulher Negra, and I apologize for the pronunciation.

Thank you very much, Madam Chair. My name is Luis Vieira with the Bretton Woods Project, and I'm also speaking on behalf of the CSO FFD mechanism. I'd like to begin by calling for the establishment of a UN framework to adequately regulate and supervise financial institutions, including non-banking financial institutions and hedge funds. We also call for a global agreement on capital account management under UN auspices and a global regulatory framework for the asset management industry. These calls reflect our growing concern about the displacement of public development resources by the deepening financialization of development finance, including through an increasing reliance on innovative financing instruments and securitization. These trends exacerbate the extreme limitations of the current monetary and financial frameworks, which undermine economic, monetary, and financial sovereignty of developing countries. trapping them into disadvantageous currency hierarchies, liquidity challenges, and tight monetary policies that restrict their policy and fiscal space for structural transformation and economic diversification. These have real economy effects on the cost of living, employment opportunities, social expenditures, and the ability of states to meet their human rights obligations and indeed the aspirations of their citizens. It is unacceptable that developing countries operate under such sovereignty limitations and have no agency in reshaping these frameworks from their developmental perspective. Past financial crises not only represented a massive failure in macroeconomic and financial regulation, but also exposed a significant vacuum in governance over financial actors, particularly non-banking actors. Yet, the asset management industry has grown exponentially since the last crisis. generating even higher systemic risks for the global, for global financial stability. It is essential for all UN member states to assess the current system from both the developmental and global financial stability perspectives and to undertake decisive steps towards financial regulation, recognizing the limitations of voluntary non-binding measures. It is therefore imperative that the FFD process provide the right framework and processes to restore state capacity to regulate in the public interest. Thank you very much.

I thank the distinguished representative of the Society for International Development, Bretton Woods Project, and I now give the floor to the distinguished representative of GLEDIS Instituto da Mulher Negra, to be followed by the representative of Religions of the Sacred Heart of Mary.

Thank you, Chair.

My name is Gabriel Dantas. I represent Galadas Black Woman Institute from Brazil, and I speak on behalf of the civil society FFD mechanism. The financing for development process launched in the Monterrey in 2002, reminds us of a crucial fact. The global financial system has deep inequalities that cannot be solved by individual nations alone. The systemic issues rooted in colonial history continue to harm many countries, especially in the global south, causing repeated crises and significant social and economic suffering. I'd like to congratulate and highlight the Brazilian intervention made in the beginning of the discussion, because the ongoing financial crisis have pushed millions into poverty and reverse development progress. Women and marginalized groups, especially people of African descent, face the heaviest burdens. Structural racism and sexism reinforce inequality, while financial systems often fail to consider race and gender. As the International Decade for the People of African Descent comes to an end, we must recognize that many of its goals remain unfulfilled. Structural barriers continue to block these communities from accessing resources and participating in the decision-making process. People of African descent face barriers to accessing credit, formal employment, and economic opportunities. These inequalities are not personal failures, but the results of systemic exclusion and directly undermine SDGs one, eight, and 10 by perpetuating poverty, economic exclusion, and inequality. We urgently need systemic reforms in global finance governance, prioritize racial and gender equity in development policies. We hope that the zero draft highlights this systemic issue. This is a vital step toward building a more inclusive global system that benefits everyone.

Thank you.

I thank the distinguished representative of Instituto da Mulher Negra. And now give the floor to the distinguished representative of Religions of the Sacred Heart of Mary, to be followed by the representative of ILO.

I am Veronica Brand. I'm speaking on behalf of the NGO Committee on Financing for Development. Excellencies and distinguished delegates, structural forms of discrimination pose systemic barriers to addressing the urgent need to increase the volume of climate finance above across all three dimensions of mitigation, adaptation, loss and damage, and simplify the access to finance. Clear evidence from our experience of COVID pandemic The devastating impacts of recent extreme weather events and ongoing war and conflict has made clear it is the most marginalized who suffer the most. This is due to deep-rooted structural forms of oppression against women and girls, indigenous communities, racial minorities, communities discriminated on work and dissent, and LGBTQI communities. Reforms and measures taken by national governments to address the issue of discrimination faced by these communities are mixed and need to be strengthened. We offer some recommendations. One, the structural forms of discrimination need to be explicitly acknowledged in the outcome document from the FFD4 conference with clear strategies for guaranteeing the basic human rights of socially marginalized and vulnerable groups. Two, social protection measures regrettably not mentioned in the elements paper. have proved vital in times of crisis and should be promoted as contributing to long-term sustainable and inclusive economic growth. Three, address the intersectionality of gender and violence and the urgent need to support people in vulnerable situations, particularly women and girls, ensuring representation and voice in policy and decision making. Four, develop strategies to overcome structural barriers that prevent women and minorities from accessing financial services. Included among these barriers are restrictions on property rights, the right to enter contracts, and the ability to fully participate in the formal sect and formal economy. I thank you.

I thank the distinguished representative of Religions of the Sacred Heart of Mary, and I now give the floor to the distinguished representative of ILO, to be followed by the representative of Bangladesh, who will be the last speaker.

Thank you, Chair. The challenge we face in financing for development is not a lack of resources, but rather our failure to fully utilise the tools of international cooperation already at our disposal. The international financial institutions, particularly the multilateral development banks and the IMF, have significant unexploited potential to mobilise resources for developing countries. In particular, Unlocking investments for social protection systems that will generate transformative effects are much needed. Social protection not only prevents poverty and reduces multiple inequalities, but also acts as a counter cyclical macroeconomic stabilizer with economic multipliers. Moreover, social protection systems enhance people's adaptation to climate change while also buffering the population and protecting them from the adverse consequences of climate mitigation policies. Let me outline three concrete actions that could transform our financing landscape. First, we propose that developed countries and China donate 60% of their 2021 SDR issuance, approximately USD 265 billion, to finance climate mitigation and adaptation in developing countries. This builds directly on the commitments already made in the Pact for the Future. By channeling these resources into integrated policy approaches, including social protection financing, we can simultaneously mitigate risks and improve resilience to climate shocks. Second, we recommend adjusting IMF's operating model for SDR issuance, particularly through the Resilience and Sustainability Trust. This trust should serve as a funding window rather than a direct lender working through the multilateral development banks established project finance expertise. We should also reconsider the current restrictive conditions on these loans. This would better align with development finance needs. Third and finally, we recommend promoting the collaboration between the international financial institutions and UN entities to expand the fiscal space for financing the SDGs. Since 2019, the ILO and IMF have been working together at the country level, bringing ministries of labor and finance together with workers and employers organizations that represent the real economy to explore sustainable ways to expand fiscal space for social protection. This collaboration is crucial because well-designed social protection programs boost domestic demand, promote macro stability, and reduce the need.

I thank the distinguished representative of the ILO and I give the floor to the distinguished representative of Bangladesh, who will be the last speaker.

Thank you, Madam Chair. Bangladesh believes that the needs and aspirations of partner countries must be at the forefront of any efforts to reform the international financial architecture. Our primary goal should be to reduce both intra and inter-country inequalities in line with the principle of leaving no one behind. In this regard, we want to highlight a few brief points. We advocate for further quota realignment to better reflect LDCs economic realities, ensuring quotas and basic votes for the poorest members are safeguarded. We call for accelerating the equitable redistribution of voting power during the 2025 World Bank shareholding review. We would suggest a regular assessment of geographic and gender diversity in the leadership of IFIs, ensuring representation of LDCs. We call for expanding IMF lending capacity through the new SDR issuances and expedited rechanneling of unused SDRs to vulnerable countries. We advocate for IMF resources to be allocated based on need, not borrowing limits, and ensure access to concessional financing. We call for regulatory frameworks to improve credit rating transparency, objectivity, and long-term orientation. Finally, we request incorporating climate transition plans into financial regulations to encourage investments aligned with sustainability goals. Thank you, Madam Chair.

I thank the distinguished representative of Bangladesh for his intervention and I thank you all for your participation. We will reconvene tomorrow morning at 10 a.m. in this conference room to hold the interactive discussion number eight on data monitoring and follow-up, followed by a conclusion of the general debate. Have a good night.