The rules-based international order is fading fast, and the major economies are building new blocs, weaponising finance, and rewriting the rules to suit their own interests.
For the Global South, the clearest area that needs to be reshaped is the rules on global sovereign debt, since with interest rates high and climate shocks intensifying, debt-servicing is crowding out public investment.
However, in this landscape, acting alone is not an option. The debtor countries need to form their own coalition to negotiate fairer terms, and Egypt is uniquely positioned to help lead the push by making reform of the global debt architecture a core project of its South-South diplomacy.
Such considerations formed the backdrop to the Fourth International Conference on Financing for Development (FfD4), a pivotal debt-related conference held from 30 June to 3 July in the Spanish city of Seville last year. Governments and civil-society groups arrived with the hope that the gathering would deliver meaningful reforms to the global debt and development system. After years of rising debt burdens, slow restructurings, and shrinking development finance, the Global South needed action.
But by the end of the conference, the high-income countries had succeeded in blocking meaningful reforms and proposals that would have made the world’s debt and the financial architecture work for development and greater growth in the Global South. The conference’s output document lacked bold commitments and reforms, delivering vague language, non-binding processes, and unclear commitments. For many countries struggling under heavy debt loads, the message was unmistakable: the current system is biased, unequal, slow, and deeply creditor-centric.
The frustration is rooted in the fact that the global financial system is draining resources from the countries that need them most. That reality can be demonstrated by two observations.
First, private creditors are now taking more money out of the Global South than they are putting in. According to the World Bank’s 2025 International Debt Report, developing countries sent $741 billion more to their external creditors than they received in total new financing between 2022 and 2024. The figure is the biggest net outflow in at least half a century, and the debt-servicing of the developing countries has reached record highs, and they are sending unprecedented sums to external creditors.
Second, debt restructurings themselves are slowing. The International Monetary Fund (IMF) admits that the average time for recent restructuring from 2020 to 2025 now takes about 2.5 years, compared to 1.1 years in 2014-2020. The longer the talks drag on, the more countries remain trapped, unable to invest in recovery or essential services and forced to operate under persistent economic uncertainty. These are the expected results of a system built around creditor interests.
The most important debt-related outcome from the Seville Conference was a UN-led process to examine gaps in the debt architecture. However, the major creditors ensured that it was non-binding. The EU and the US objected to a debt workout mechanism and resisted any move towards binding responsible lending rules. The EU publicly criticised these efforts, while the US withdrew from the negotiations. The countries that benefit most from the current system have no intention of changing it. That leaves debtor countries with one realistic option: building a platform for collective negotiation.
In the Seville outcome document, there is a policy development with potential impact: the creation of a Borrowers Forum. Were this recommendation to be adopted, for the first time the debtor countries would have a formal space to coordinate positions, share information, and strengthen their collective voice.
The good news is that this is already being put into motion as the Egyptian Foreign Ministry moves to make the forum a reality. On 22 September last year it co-organised a high-level event with Zambia at the UN General Assembly to lay the foundations for such an organisation that would be the first institutional step towards a Global South debtor coalition.
By co-leading the initiative to establish a Borrowers Forum, Egypt is helping to design a platform through which debtor coordination can take shape. It is coordinating several geopolitical spheres and can engage with different blocs. By using its diplomatic influence, Egypt can help align Africa’s reform goals, the drive of the BRICS group of countries for a multipolar financial system, and the Arab world’s debt concerns with Western partnerships through the IMF and EU.
Egypt has become a regional and global leader in debt-for-development innovations, including debt-for-climate swaps and agreements involving Chinese debt. These are practical tools that a future debtor coalition could adopt and scale up.
When the global picture is put together, a debtor union is no longer a remote idea; it is becoming inevitable. At present, the system is extracting resources from the Global South, debt resolution is dysfunctional, and creditor states are blocking reform. The emergence of the Borrowers Forum is the logical next step. With its diplomatic reach and policy innovations, Egypt is positioned to be one of its principal architects.
The Seville Conference did not bring the reforms the Global South was hoping for. However, it indicated that unity is the key to reshaping a system that has long worked against them, with Egyptian diplomacy positioned to lead a much-needed coalition.
The writer is an economic researcher and public policy consultant specialising in how international financial institutions, debt dynamics, and International Monetary Fund conditionalities shape inequality across the MENA region, and a researcher at the BUC Centre for Global Affairs.
* A version of this article appears in print in the 2 April, 2026 edition of Al-Ahram Weekly
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