The IMF and World Bank annual meetings were marked by the influence of geopolitical tensions, reduced attention to the structural problems of public debt across the world, and the promotion of private investment as a silver bullet solution to multiple challenges in a shifting landscape of high uncertainty and facing different risks beneath the apparent calm. The economic outlook was revised upwards, but exposure to protectionism, shocks and other adverse factors was highlighted. The future of finance and its link to technology was also on the agenda, as were the challenges of AI for the economy and jobs.
During the meetings, the G20 Ministerial Statement on Debt Sustainability reaffirmed its position on the G20 Common Framework as the space for resolving debt conflicts. As in many international forums, they also point to false solutions, such as debt swaps, as a response to growing debt pressures. That week saw the launch of the Global Hub on Debt for Development Swaps), following up on the Seville Commitment. In the days leading up to the meetings, more than 160 civil society organisations sent a letter to the President of South Africa, as this year’s G20 leader, calling for more ambitious responses and structural changes in the governance and functioning of the current financial architecture, in a context where a new distribution of quotas in the IMF and World Bank is also being discussed in order to give a greater voice and vote to southern countries.
The International Monetary and Financial Committee (IMFC) has maintained the same G20 line. In terms of debt governance, the G20, IMF and World Bank consider that the Global Sovereign Debt Roundtable (GSDR) offers significant progress. The reality is quite the opposite.
The complex composition of public debt and difficult coordination with private creditors are recognised as one of the main challenges for debt restructuring processes. To address this, the IMF published a policy paper that, among other things, points to gaps in the contractual framework for resolving privately held sovereign debt, particularly in the case of commercial banks and other non-bondholders.They explain that renegotiation processes have been longer in recent years, with an average duration of 2.5 years in 2020–24, significantly longer than the 1.1 years for external debt restructurings in 2014–20. However, the proposals put forward overlook some advances that could change the weak results obtained in the cases studied.
Global public debt is expected to exceed 100% of GDP in 2029. In recent years, the issue of debt has been at the centre of the agenda. However, it has not been a central topic in the autumn discussions of the IMF and World Bank, which meant there were no announcements or responses to the debt and development crisis, even despite recent agreements by UN member states on debt that could lay the groundwork for initiating some reforms.
For Global South economies, there are growing pressures, very limited fiscal space and greater difficulties in financing public investment to meet the essential needs of their populations and build climate resilience. During the annual meetings, the approach to addressing debt and financing problems was superficial, reaffirming a partial diagnosis that points only to (temporary) liquidity squeezes and a contained, albeit still high, debt stocks. Thus, they offer responses framed within their three-pillar approach that was presented a year ago. These proposals are not new, nor do they offer a way out of the debt and development crisis. They emphasise austerity (and mobilisation of internal resources), offer greater financing for low-income countries, and the use of risk-sharing instruments for countries with high debt servicing costs.
Along the same lines, under the premise that has characterised the IMF throughout its history, the Fiscal Monitor advocates ‘smart spending’ to achieve greater output ‘from a given level of public expenditure’. They suggest redirecting spending towards infrastructure investment, which, according to their analysis, ‘would raise output by around 3.5% in emerging and developing market economies over a period of approximately 25 years’. The report ignores the fact that countries in the South currently allocate more resources to interest debt payments than to health or education, making it increasingly difficult to advance sustainable development goals. Research by Development Finance International (2025) shows that debt servicing payments already exceed total combined spending on education, health and social protection by 20%.
The overall message for countries with greater financing needs is: do more with fewer resources, relegating the responsibility of both institutions and advanced economies in shaping a failed system.
At the press briefing, they acknowledged that beyond the level of debt measured by the debt-to-GDP ratio, the cost of this indebtedness increases the vulnerabilities of countries (in the South). Despite this, in various discussions, the IMF and World Bank place the responsibility on borrowing countries and attribute their situation to domestic decisions without considering the structural problems of the financial system. In a new Jubilee year, debt reduction and relief policies are absent from the radar of the Bretton Woods Institutions (BWI).
On the other hand, as an alternative to provide immediate liquidity, the Group of Twenty-Four (G-24) calls for regular issuances of Special Drawing Rights (SDRs). LATINDADD and CEPR released a working paper during the same week calling on the IMF to design a playbook on SDRs within the framework of the Seville Commitment to provide operational guidance and reinforce their role during crises and shocks.
For Latin America and the Caribbean, the IMF continues to encourage fiscal consolidation policies in response to high debt and persistent fiscal deficits, and addresses the need to boost growth through structural policies that favour ‘business dynamism’. A chapter is devoted to the interaction between fiscal and monetary policy, highlighting the role of fiscal policy frameworks and reforms to strengthen the independence of central banks.
Looking ahead, the IMF Managing Director’s global policy agenda – entitled ‘Navigating a World in Transition’ – maintains an orientation that is not precisely suited to today’s rapidly changing world. Among the priorities on the agenda are a decisive push for ‘sustained fiscal adjustments to ensure debt sustainability and rebuild fiscal buffers,’ the independent role of central banks and their mandate to preserve price stability, and enthusiastic promotion of policies that favour the private sector to ‘unlock growth’ in the face of reduced fiscal space.
It also highlights the ongoing reviews of IMF Comprehensive Surveillance Review, the Review of Programme Design and Conditionality, and the review of the Debt Sustainability Framework for Low-income Countries, and mentions an update to the Guidance Note on the Debt Sustainability Framework for Market-access Countries.
This story merely illustrates the unwillingness of major decision-makers in the current system to offer lasting, fair and inclusive solutions. Following the 4th United Nations Conference on Financing for Development held in Seville a few months ago, the IBWs avoided addressing the issues in which Member States assigned them a role under the conference agreements (Seville Commitment). None of the institutions will reform on their own, and in the absence of democratic global economic governance, renewed multilateralism is needed. In a system where decisions are made by and for the few, this is the only way to guarantee that every nation has a voice and a vote.
