DESIGNING HUMAN RIGHTS-ALIGNED REFORMS FOR DEBT RESTRUCTURINGS

The document examines how international human rights law can reshape sovereign debt restructuring to protect socio-economic rights in the Global South. It identifies key principles—including the right to development, self-determination, and good faith—that should replace the current 'non-system' of contractual negotiations. The authors advocate for a legally binding statutory mechanism under the United Nations to ensure transparency, prevent abusive holdout litigation by vulture funds, and prioritize minimum standards of living over creditor interests.

• Debt servicing costs in the Global South are severely crowding out essential public spending, with debt service absorbing an average of 38% of budget revenue and 30% of public spending; in Africa, these figures rise to 54% of revenue and 40% of spending.
• The current 'non-system' of debt restructuring is fragmented and inequitable, as the G20’s Common Framework does not compel private creditors to participate, and approximately 39% of debt is owed to private creditors.
• Human rights law provides a normative basis to prioritize the fundamental needs of people over creditor interests, asserting that debt becomes unsustainable when it compromises a state's capacity to observe its human rights obligations.
• The principle of good faith in debt restructuring requires creditors and debtors to engage constructively and prohibits abusive practices, such as holdout litigation by vulture funds that delay restructuring and aggravate human rights impacts.
• Debt sustainability assessments (DSAs) traditionally prioritize creditor repayment; the authors argue they must be reformed to incorporate human rights considerations and the long-term well-being of the population.
• A statutory approach to debt restructuring, hosted by the United Nations, is proposed as a superior alternative to contractual models because the UN is independent of creditor interests and possesses a rights-based mandate.
• Past attempts at statutory frameworks, such as the IMF's 2002 Sovereign Debt Restructuring Mechanism (SDRM) and various UN General Assembly resolutions, failed primarily due to opposition from major creditor nations like the US and UK.

APA

Ampofo-Anti, O., Inge, C., Forgette, M., Mamberti, M. E., & Ramburuth, K. (2025). DESIGNING HUMAN RIGHTS-ALIGNED REFORMS FOR DEBT RESTRUCTURINGS. Institute for Economic Justice. https://iej.org.za/wp-content/uploads/2025/04/IEJ-G20-3-Designing-human-rights-2025-1.pdf

Chicago

Ampofo-Anti, Ohene, Charlotte Inge, Matthew Forgette, María Emilia Mamberti, and Kamal Ramburuth. DESIGNING HUMAN RIGHTS-ALIGNED REFORMS FOR DEBT RESTRUCTURINGS. Institute for Economic Justice, 2025. https://iej.org.za/wp-content/uploads/2025/04/IEJ-G20-3-Designing-human-rights-2025-1.pdf.

Wikipedia

{{cite report |last1=Ampofo-Anti |first1=Ohene |last2=Inge |first2=Charlotte |last3=Forgette |first3=Matthew |last4=Mamberti |first4=María Emilia |last5=Ramburuth |first5=Kamal |title=DESIGNING HUMAN RIGHTS-ALIGNED REFORMS FOR DEBT RESTRUCTURINGS |publisher=Institute for Economic Justice |date=April 2025 |url=https://iej.org.za/wp-content/uploads/2025/04/IEJ-G20-3-Designing-human-rights-2025-1.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ampofoanti2025designing, author = {Ampofo-Anti, Ohene and Inge, Charlotte and Forgette, Matthew and Mamberti, María Emilia and Ramburuth, Kamal}, title = {{DESIGNING HUMAN RIGHTS-ALIGNED REFORMS FOR DEBT RESTRUCTURINGS}}, institution = {Institute for Economic Justice}, year = {2025}, month = apr, url = {https://iej.org.za/wp-content/uploads/2025/04/IEJ-G20-3-Designing-human-rights-2025-1.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }