This policy empowers debtor nations to negotiate collectively with creditors, reducing asymmetries of power in sovereign debt governance. Its design establishes regional or interregional “debtor clubs” that pool technical expertise, harmonise positions, and establish joint principles for restructuring, such as prioritising human rights and social spending over debt service. The goal is to prevent creditor fragmentation tactics and increase debtors’ leverage in negotiations with private creditors, IFIs, and the Paris Club.
Implementation requires regional frameworks (e.g., African Union, CELAC, ASEAN), UN facilitation for legitimacy, and protective legal mechanisms to shield countries from creditor litigation.
This policy is desirable because it strengthens debtors’ bargaining power, protects fiscal space for essential social investment, and fosters solidarity-based responses to debt crises.
