The Sevilla Commitment marks a meaningful effort in sovereign debt governance, but creditor fragmentation, weak enforcement and missing actors could keep it closer to a coordination platform than a reformed governance architecture
In April 2026, New York hosted the 2026 United Nations (UN) ECOSOC Financing for Development Forum, marking the first major review since the landmark adoption of the ‘Sevilla Commitment’ at the UN’s Fourth International Conference on Financing for Development (FfD) in 2025. This was followed by the annual review report released in April 2026. Every few years, the FfD has produced a major commitment about the global financial architecture: in 2002, it saw the adoption of the Monterrey Consensus to mobilise international aid for the Millennium Development Goals (MDGs); the 2008 Doha Declaration was adopted in the shadow of the global financial crisis and the breakdown of the Doha World Trade Organization Round; and the 2015 Addis Ababa Action Agenda focused on transitioning from the MDGs to the Sustainable Development Goals. The Sevilla Commitment, as a recast of the 2015 Addis Ababa Action Agenda and a new post-COVID-19 global framework, is the most ambitious of them all. It focuses on financing sustainable development, with actions across three strategic areas: investment, debt, and international financial architecture reform. This is especially critical in an era of multifaceted instabilities, particularly as the assumptions and institutions underpinning such commitments have weakened.
Uptake by debtor nations of the G20 Framework has been limited, with only four countries (Zambia, Chad, Ghana, and Ethiopia) applying under the framework, owing to its ad hoc nature and ambiguity
The launch of the G20 Common Framework for Debt Treatments (G20 Framework) in November 2020 was an acknowledgement that the economic devastation of the COVID-19 pandemic had fundamentally transformed what began as a short-term, acute liquidity crisis (which the G20 attempted to address through temporary pauses under the G20’s Debt Service Suspension Initiative) into deep-seated structural solvency issues for low-income countries. Historically, debtor nations had to negotiate separately with fragmented creditor classes, which impacted restructuring outcomes, particularly given the changed creditor landscape. The G20 Framework attempted to resolve this by bringing the Paris Club and non-Paris Club bilateral creditors (especially China, the world’s largest bilateral lender) together under a unified Official Creditor Committee (OCC), while subsequently obligating private creditors (who are not part of the G20 Framework) to offer similar haircuts by imposing the Comparability of Treatment (CoT) requirement on debtor nations. However, uptake by debtor nations of the G20 Framework has been limited, with only four countries (Zambia, Chad, Ghana, and Ethiopia) applying under the framework, owing to its ad hoc nature and ambiguity, as reflected in these restructurings. While the subsequent issuance of operational guidelines, including the Global Sovereign Debt Roundtable (GSDR) playbook, provided some clarity, the framework remains ambiguous on other critical issues, as highlighted below.
Commitment Issues: Endorsed through UN General Assembly Resolution 79/323, the Sevilla Commitment, on the debt front, focuses on debt management, debt sustainability, and responsible borrowing and lending. However, the final version of the commitment is a highly diluted version of the zero draft. For instance, the initial proposal envisaged a ‘model law’ on debt restructuring for adoption by UN member states as part of their domestic legislation, alongside the development of a ‘multilateral sovereign debt mechanism’ to address gaps in the existing architecture, including the G20 Framework. In contrast, the final commitment preserves the G20 Framework as the primary anchor, with a suggestion to expand its coverage to middle-income countries. An intergovernmental process will now propose recommendations through stakeholder dialogue. Efforts to move beyond geopolitical inertia were blunted, leaving the outcomes closer to a coordination platform than to a reconstituted governance architecture.
Without buy-in from the US, despite the efforts embodied in the Sevilla Commitment, these debt restructuring issues involving private creditors will persist, particularly in times of crisis.
The New York Quotient: Despite a diluted Sevilla Commitment, the United States (US) ultimately withdrew from it, opposing, among other things, the UN’s involvement in the global debt architecture—a move Washington deemed an encroachment on the International Monetary Fund (IMF)’s turf. This non-cooperation affects the initiative’s viability, as over 52 per cent of global sovereign bonds are governed by New York law and the vast majority of international private bondholders operate out of New York. As demonstrated during Sri Lanka’s debt restructuring, it took urgent interventions by the United States (US), the United Kingdom (UK), and France for a New York court to stay a lawsuit brought by holdout creditors seeking full repayment and attempting to disrupt the restructuring process. The G20 Framework has faced significant difficulties in bringing private creditors to a restructuring agreement and enforcing the CoT principle. While Sevilla encourages jurisdictions to pass domestic legislation to address the issue of holdout creditors, some efforts on this front were already underway through the introduction of the Sovereign Debt Stability Act bill in the New York State Assembly and the New York Senate in 2024, which sought to create a comprehensive debt restructuring mechanism and legally limit private creditors’ recoveries. However, the bill has repeatedly faced fierce pushback from the Wall Street lobby, which argues that the law would undermine New York’s status as the preferred jurisdiction and the world’s financial capital. Without buy-in from the US, despite the efforts embodied in the Sevilla Commitment, these debt restructuring issues involving private creditors will persist, particularly in times of crisis.
Rules of the Game: The Sevilla Commitment rightly recognises the need for inter-creditor coordination and uptake of CoT. It suggests measures such as domestic legislation to discipline holdout behaviour (as mentioned above), the widespread adoption of collective action clauses, and early engagement and information-sharing among creditors by building on the GSDR to fill these gaps in the existing debt architecture. However, other recurring inter-creditor issues also affect fair burden-sharing in restructurings, including siloed negotiations by China outside OCCs, ambiguity around the inclusion of state-backed lenders within the G20 Framework (a challenge particularly relevant in China’s case), tensions between domestic- and foreign-currency debt restructuring, and the treatment of undisclosed collateralised debt, particularly in Chinese lending. For fair and timely debt restructurings, the Sevilla platform must help shift the process from voluntary, case-by-case engagement to one guided by more established and clearer inter-creditor rules of engagement, at the very least for official creditors. This is especially critical given the fundamental shift and fragmentation in the creditor landscape, with the declining share of Paris Club creditors and the growing presence of diverse non-Paris Club bilateral lenders such as China, Saudi Arabia, the United Arab Emirates (UAE), and India, as well as private creditors.
Ultimately, however, the real test lies in whether the Sevilla Commitment can move beyond coordination to effectively institutionalise multi-creditor liquidity support and debt management in periods of stress, particularly as countries grapple with unprecedented crises
The Liquidity Squeeze: According to the World Bank’s latest International Debt Report 2025, rather than a post-COVID-19 normalisation, the global debt system remains under pressure from the interplay between cyclical shocks and a structurally altered debt landscape. Low- and middle-income countries are trapped in a high-cost debt cycle where, even as their external debt growth has slowed, interest payments are now 2.4 times higher than a decade ago, exacerbated by currency depreciation and the dominance of foreign-currency-denominated debt. Rising debt-service burdens (with interest payments alone often constituting 20–40 percent of government revenues in many low- and middle-income countries), alongside net negative transfers, are tightening fiscal space and intensifying refinancing risks. These dynamics are increasingly blurring the distinction between liquidity and solvency risks. To mitigate this, countries are turning to costlier domestic debt and volatile international capital markets, creating new macro-financial vulnerabilities.
Sevilla seeks to alleviate these pressures by pushing for expanded concessional lending, liquidity and debt-management support mechanisms, revised credit-rating methodologies that account for multidimensional vulnerabilities, the inclusion of state-contingent clauses such as debt pause clauses and climate-resilient debt clauses, and the scaling up of debt-for-development swaps. This is demonstrated by new platforms such as the Debt Pause Clause Alliance, the Global Hub on Debt for Development Swaps, and other similar initiatives as documented on the Sevilla Platform for Action. Further, through the new Borrower’s Platform, it hopes to empower debtor nations with the collective leverage needed in restructuring negotiations. Ultimately, however, the real test lies in whether the Sevilla Commitment can move beyond coordination to effectively institutionalise multi-creditor liquidity support and debt management in periods of stress, particularly as countries grapple with unprecedented crises such as the recent Strait of Hormuz blockage, where there is a heightened risk of compounded old structural disruptions and new external shocks.
With rising macroeconomic pressures, a complex debt landscape, and persistent geopolitical constraints, the future of debt governance is far from settled. Despite the dilution of the final Sevilla Commitment, the UN’s efforts to consolidate existing measures, build momentum to address gaps, and institutionalise a more development-oriented global debt architecture are meaningful. Whether the needle truly moves will depend on tangible outcomes that go beyond forums for dialogue and coordination and actually influence future sovereign debt restructurings. At an early stage of implementation, the Sevilla Commitment’s 2027 FfD review, expected to operationalise more substantive measures, will offer further insight.
Lavanya Mani is a Fellow at the Observer Research Foundation.
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Lavanya Mani is a Fellow at ORF, where she plays a key role on the curatorial team, shaping the thematic direction and programming of ORF’s ...
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