Secretary-General, at Launch of Borrowers Platform, Urges All Eligible Countries to Join Historic Initiative Aimed at Making Economic Power Relations More Equitable

Following are UN Secretary-General António Guterres' remarks at the launch of the Borrowers Platform, in Washington, D.C., today:

Allow me to start by saying that this is a historic meeting. We live with a deeply unfair international economic and financial ecosystem and a deeply unfair international financial architecture. And it is unfair, because of a question of power. And obviously those that have dominated the international financial system have not been very, I would say, supportive of the changes that are necessary to make it equitable and to make it adaptable to the needs of the world as a whole. And power, I learned as a politician, is very difficult to see being given.

Power normally needs to be taken. I believe the creation of the Borrowers Platform is an essential instrument in order for a change in power relations to be possible in the future, and that changing power relations is absolutely essential to have a fair international financial architecture and a much more equitable echo of the international financial and economic ecosystem.

So, congratulations for this extremely important, I would say, again, historic initiative. And I'd like to thank the Chair of the Working Group, Egypt, and the Vice-Chair, Pakistan, as well as Working Group representatives from Colombia, Honduras, Maldives, Nepal and Zambia, the initial group.

And I also would like to say that we have on the other side some allies, and I would like to underline that last year's historic conference on financing for development that resulted in the Sevilla Commitment was made in Spain, and we had strong support from Spain to the kind of initiatives that we intend to move forward.

I also want to acknowledge the central role of the United Nations Conference on Trade and Development (UNCTAD) as secretariat of the important initiative we are launching today. I'm encouraged to see such broad interest and support from across regions and income groups. That diversity speaks to both the urgency of this effort and the shared recognition that the global debt system must change.

Today, we launched a breakthrough in global financing. A platform in which borrowing countries sit together, learn from each other and speak with a collective voice.

Creditors have long had dedicated spaces to coordinate - the Paris Club, the London Club, the Institute of International Finance and other regular consultation mechanisms. But borrowers have had no equivalent. When debt crises hit, they do not have a proven playbook to draw on. They often lack the technical capacity or the institutional memory that the other side of the table takes for granted. At times, borrowers are left out of the discussion altogether.

I will never forget the words of one African President describing the restructuring of his country's debt in the context of the Group of Twenty (G20) initiative. All stakeholders were present at the negotiating table except the country itself. The costs of these gaps are significant. Many countries are trapped in cycles of unresolved debt crisis. Many more are held back by vast debt repayments that drain public resources and undermine long-term investments.

Over the past decades, developing countries have paid, on average, more than twice the interest rates faced by advanced economies. For African economies, the premium reaches three times benchmark rates.

This leaves developing countries at a distinct disadvantage in assessing the financing they need, which is another clear example of inequality lurking at the heart of the global financial architecture. We need to fix the system that makes it two to three times more expensive for developing countries to finance education, health or what the system is.

Meanwhile, since 2014, interest payments on government debt in developing countries have more than doubled. Today, 3.4 billion people live in countries that spend more servicing debt than health or education. Developing countries are forced to climb the development ladder with one hand tied behind their backs.

These pressures are intensifying. The war in the Middle East is sending shockwaves through the global economy. Rising fuel and raw material costs are tightening fiscal space. Transportation systems and supply chains are strained. Growth is slowing, and borrowing costs are climbing, even higher, especially for the most vulnerable.

The new Platform aims to give developing countries a place to come together around four shared objectives.

First - to accelerate learning. Today's global economy includes a dizzying choice of creditors and credit instruments. Navigating those choices requires most technical expertise and experience.

The imperative is heightened during episodes of debt distress, when countries contemplate debt restructuring, but typically do so without access to the full knowledge of what the process will entail. It is no wonder that the G20 Common Framework has completed restructuring for just three countries in the past 40 years.

Countries require assistance to find out what works and what does not; how different creditor classes should be engaged; how to structure proposals; and how to navigate complex and technical sovereign debt instruments, including debt swaps.

The Platform will create a permanent space for peer exchange so that countries can enter negotiations armed with information and experiences gained from countries that travelled a similar path.

And it's important also to take into account that no one size fits all. Many of the countries around this table have different dimensions and different kinds of depths. It's important that those experiences are also shared. And it's important that all situations are taken into account when in the work of the Borrowers Platform.

Second - the Platform will give borrowers the tools to engage with creditors on equal terms. Developing countries can arrive at negotiating tables informed and armed with positions backed by shared analysis and collective experience. When both sides of the table are well informed and well prepared, negotiations move faster and the agreements take shape.

Third - the Platform will send the clear market signal to creditors. Better debt management, better data and better transparency directly affect our markets' perceived risk.

When borrowers strengthen their practices collectively, learning from one another, the signal reaches investors. Transparency, strength and certainty, which can lower borrowing costs and provide fiscal space to invest in development.

And fourth - the Platform gives borrowing countries something they have lacked until now: a collective voice within the global debt architecture. It is another step toward the global debt system that places borrowers at the centre of discussions that determine their futures and ensure their perspectives are coordinated, informed and heard.

At a deeper level, the Platform reflects the reality of today's world. Developing countries are rising economic actors. Their influence is growing. And global governance must adapt accordingly.

There is one thing that I've been telling developed countries and that is the following: if you look at the Group of 7 (G7) in every single day, the G7 has a smaller share of the global economy than in the day before. And if you look at the emerging economies, some of them sitting in this meeting, every single day, the group of the emerging economies has a share of global GDP that is higher than in the day before. And this change is a structural change, and this change will help transform the power relations that have until now prevailed.

Indeed, developing countries are rising economic actors, their influence is growing and global governance must adapt accordingly. This Platform does not substitute for reform of the international financial architecture, but it makes the case for it even clearer.

Last July, Member States agreed to rev up the engine of financing for developing countries to the Sevilla Commitment. The Commitment and the Platform we are launching today - along with other key initiatives, including the High-Level Expert Group on Beyond Gross Domestic Product (GDP) to offer new ways to measure progress and well-being - all recognize a critical truth.

In the end, the cost of finance is not measured only in balance sheets. It's measured in hospitals and schools; in food, water and sanitation; in jobs, social protection and housing; in transport systems and resilient infrastructure; and it's measured in people's lives.

The Borrowers Platform cannot generate solutions that allow countries to invest in these fundamentals - and to do so on fairer, more sustainable terms.

I'm deeply encouraged by the energy and commitment behind this initiative, and I call on every eligible country to join. And I offer my full support as the Borrowers Platform moves from the launch pad to take-off.

Thank you, and I wish you the best success.