The current sovereign debt system is structurally misaligned with human rights and development. Across the Global South, governments are forced to prioritize external debt service over essential spending on health, education, food systems, and social protection, with 3.4 billion people living in countries that spend more on debt payments than on these basic services. This is not a temporary crisis but the outcome of a global economic architecture rooted in colonial legacies, structural trade imbalances, and dependence on food, energy, and high value-added imports, which systematically generate external debt cycles. This proposal responds to that structural problem by advancing a two-pronged policy: (1) a human rights–based sovereign debt cancellation framework, including automatic debt standstills, independent debt audits, and a UN-led debt workout mechanism; and (2) the institutionalization of Global South debtor coordination, building on the UNCTAD Borrowers’ Platform, as a stepping stone toward a formal Debtors’ Coalition capable of collective negotiation and strategic action. Emerging practices from the Borrowers’ Platform to past restructuring experiences demonstrate that coordination and debt relief are both feasible and necessary. What this proposal changes is the balance of power: it shifts leverage from fragmented debtor states to coordinated collective action, reframes debt cancellation as a legal obligation grounded in human rights, and links debt relief to structural transformation in food sovereignty, renewable energy sovereignty, and green joint-industrial strategies. This unlocks fiscal space without reliance on growth-dependent models, reduces ecological pressures tied to extractive export systems, and enables governments to meet human needs directly. In doing so, the proposal contributes to the broader project of eradicating poverty beyond growth by restoring economic sovereignty, redistributing power within the global financial system, and aligning macroeconomic policy with human rights and sustainable development goals.
