UN Challenge in Seville: Governments Have the Chance to Build a Better and More Sustainable Global Financial Framework.

World leaders gathered this week in Seville for the United Nations International Conference on Financing for Development face a tremendous challenge. Initially, the hope was to find the additional funds needed to reduce poverty, promote growth, and combat climate change. Now, the concern is that the situation may worsen. Cuts in aid have severely affected humanitarian action and critical global health issues. Economic uncertainty, along with unsustainable debt, is draining government budgets. This means there is insufficient money to address pandemics, violent conflicts, and climate crises, which in turn could destabilize societies worldwide. No country will be safe.

There is a 20% chance that the world will experience another pandemic as deadly as COVID-19 in the next decade. Humanity risks losing control of some of the world’s most lethal epidemics. New cases of mpox (monkeypox) have been reported in Malawi, and if U.S. funding disappears, fails to recover, or is not replaced, there could be six million new HIV infections and four million additional AIDS-related deaths by 2029. Ten million people could contract tuberculosis, leading to two million more deaths.

In Seville, governments cannot simply cover up the deficiencies of a collapsing development financing system.

In 2015, during the last United Nations Conference on Financing for Development, some wealthy countries had met the global target they set to contribute 0.7% of their Gross Domestic Product (GDP) to global development. However, a decade has passed, and governments are now abandoning that ambition to focus on military spending. In 2024, no G-7 country approached that goal, and all indications suggest that 2025 will see the largest drop in aid to developing countries in history.

Aid is not a panacea, but it has made a huge difference. It has enabled investment in crucial priorities like the HIV response.

Joseph Stiglitz and Winnie Byanyima

As NATO countries are the largest aid donors, the recent agreement to increase defense spending to 5% of GDP by 2035 will only worsen the situation. Aid is not a panacea, but it has made a huge difference. It has enabled investment in crucial priorities like the HIV response. A new generation of international cooperation, prioritizing not just humanitarian assistance, requires a renewed approach to global public investment for global public goods, among which public health is one of the most important.

Meanwhile, developing countries are suffocating under three trillion dollars of debt, and more than half of low-income countries are either in a debt crisis or at high risk. As a result, today, money flows from developing countries to advanced economies, the opposite of what should happen. Over half of the debt in the Global South is held by banks and private companies, which are often slow to engage in debt restructurings and, when they do, usually offer far less than is needed. Their importance, even among the poorest countries, makes debt restructuring more complex and slow. Zambia took four years to reach an agreement on debt relief. Even in the case of Ukraine, amid war, it took four months.

In recent years, money has flowed from developing countries to private creditors in advanced economies. What facilitates this perverse flow is that international financial institutions, the IMF, and multilateral development banks are orchestrating a de facto bailout for private creditors with money they provide to the developing world, while also charging very high interest rates, far exceeding what is needed to compensate for the risks they undertake.

Austerity is not an option. Countries are barely able to meet their citizens’ basic needs. Low- and middle-income countries do everything they can to finance vital programs, but they simply do not have the necessary money to bear the burden. Today, 3.3 billion people live in countries that spend more on debt servicing than on health or education.

This is why Pope Francis, in his final year of life, established the Jubilee Commission, a panel of prominent economists, jurists, and development experts tasked with explaining how the world ended up in this chaos. They revealed that, by forcing countries to cut investments in health, education, and climate adaptation to pay unsustainable debts, our development financing system not only fails to prevent crises but exacerbates them and makes them more frequent.

However, every crisis creates an opportunity. Governments now have the chance to build a better and more sustainable global financial structure. What is needed is to go beyond addressing current problems and reforming the international financial architecture to ensure that another similar crisis does not occur. It is necessary to provide not only more funding and on better terms but also to enhance growth opportunities, for example, through fairer trade agreements. It is also essential to ensure that developing countries are not exploited by illicit financial flows directed toward advanced economies and that Western corporations pay for the resources they extract from developing countries at a value far below market prices, accumulating profits.

It is essential to allow poor countries to retain a greater share of the tax revenues owed to them based on activities originating in their territories; and to promote productive capital flows to developing countries instead of speculative flows that enter and exit these countries. In fact, Africa alone loses more than 88 billion dollars a year due to illicit financial flows, primarily tax abuse, and that money often finds refuge in more advanced countries.

At the beginning of the millennium, while HIV was claiming millions of lives in Africa, the unfair and unsustainable debt burden was exacerbating the continent’s suffering. However, governments and NGOs, some of a religious nature, drove change through the Jubilee 2000 campaign, led by Pope John Paul II. They secured over 100 billion dollars in debt relief, enabling governments to invest in health, education, and social protection. HIV infections decreased by millions in the following two decades, helping steer the world toward ending AIDS as a public health threat by 2030 (SDG 3.3).

Today, there are innovations that can change the trajectory of HIV, keeping millions of people safe through long-acting, highly effective injectables; however, intellectual property rights stand in the way by establishing unaffordable prices that prevent millions in developing countries from benefiting from them. Our intellectual property system also requires structural reform, something that became evident during the pandemic, with so many unnecessary hospitalizations and deaths simply because intellectual property for COVID vaccines was not shared, resulting in millions of preventable deaths and a damage that was much deeper and longer-lasting for the global economy.

In Seville, leaders have an opportunity to renew their commitment to global justice and solidarity, which will also be in their own interest, as diseases do not need passports or visas.

Joseph Stiglitz and Winnie Byanyima

This week, in Seville, leaders have an opportunity to renew their commitment to global justice and solidarity, which will also be in their own interest, as diseases do not need passports or visas. A sick global population provides fertile ground for the development of a pandemic that could spread rapidly, and global inequalities generate a level of disintegration and social polarization that fuels conflicts that also know no borders.

A new multilateralism is needed. What happens in Seville must build on the momentum generated by the 2023 agreement to advance the United Nations Framework Convention on International Fiscal Cooperation, an agreement that could help ensure that the richest individuals and companies pay their fair share. It is also crucial to advance tax reforms, at both national and global levels, that include targeted taxation on the income and wealth of the richest individuals, the focus of inequality growth. Seville should also mark a starting point for a new debt restructuring system that allows developing countries the fiscal space necessary to lead their own future.

What matters in Seville is not only the official agreement that emerges, relevant in itself as it encompasses the will of 192 signatory countries, but also the commitment and momentum generated by the Seville Action Platform, which establishes partnerships to work cooperatively for the wellbeing of all humanity.