Sovereign Debt: Towards a Global South Debtors’ Club

This IEJ working paper argues that sovereign debt in the Global South is a tool of neocolonial control rooted in colonial legacies. It critiques G20 restructuring frameworks for ignoring structural causes and proposes a Global South Debtors’ Coalition to leverage collective resources for fairer trade and economic sovereignty.

• The paper asserts that sovereign debt crises in the Global South are structural features of a global economic system based on colonial legacies and dependency. It argues that current restructuring mechanisms, such as the Debt Service Suspension Initiative and the G20’s Common Framework, are insufficient because they treat indebtedness as a liquidity problem instead of addressing root causes like economic subordination, resource extraction, and trade imbalances.
• Sovereign debt is characterized as a mechanism of neocolonial control used by international financial institutions and creditor nations to maintain economic hierarchies and restrict the Global South to low-value production and resource extraction, citing examples from Southeast Asia, Latin America, Africa, and Haiti's independence debt.
• The IEJ proposes the creation of a Global South Debtors’ Coalition for collective economic planning and coordinated negotiation, drawing on the Cartagena Initiative. This proposal includes a "Bargain of the Century" to use the Global South's labor force, natural resources, and market size to secure investment, technology transfers, and fairer trade, focusing on industrial policy, energy independence, and food sovereignty.

APA

iej_admin (2025). Sovereign Debt: Towards a Global South Debtors’ Club. Institute for Economic Justice. https://iej.org.za/resource/working-paper/sovereign-debt-towards-a-global-south-debtors-club/

Chicago

iej_admin. Sovereign Debt: Towards a Global South Debtors’ Club. Institute for Economic Justice, 2025. https://iej.org.za/resource/working-paper/sovereign-debt-towards-a-global-south-debtors-club/.

Wikipedia

{{cite report |last1=iej_admin |title=Sovereign Debt: Towards a Global South Debtors’ Club |publisher=Institute for Economic Justice |date=21 April 2025 |url=https://iej.org.za/resource/working-paper/sovereign-debt-towards-a-global-south-debtors-club/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{iejadmin2025sovereign, author = {iej\_admin}, title = {{Sovereign Debt: Towards a Global South Debtors’ Club}}, institution = {Institute for Economic Justice}, year = {2025}, month = apr, url = {https://iej.org.za/resource/working-paper/sovereign-debt-towards-a-global-south-debtors-club/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }