A COHERENT FRAMEWORK FOR SOVEREIGN DEBT AND ECONOMIC TRANSFORMATION: TOWARDS GLOBAL SOUTH DEBTORS’ COALITION

The document analyzes sovereign debt in the Global South as a tool of neocolonial control that perpetuates structural dependencies in food, energy, and manufacturing. It critiques existing G20 restructuring mechanisms for treating debt as a liquidity issue rather than a structural one. Drawing on the failure of the 1980s Cartagena Initiative, the authors advocate for a Global South Debtors’ Coalition to leverage collective bargaining power. This coalition would pursue 'The Bargain of the Century,' proposing that Global South nations use their strategic mineral wealth and market size to secure technology transfers from major powers like China, the US, and the EU. The paper specifically urges South Africa to use its G20 Presidency to advance this framework, linking debt justice to food sovereignty, renewable energy independence, and regional industrial policies.

• Sovereign debt in the Global South is framed as a systemic tool of neocolonial control that maintains countries at the bottom of the global value chain and enables resource extraction.
• Existing debt restructuring mechanisms, such as the G20’s Debt Service Suspension Initiative (DSSI) and the Common Framework, fail because they treat debt as a liquidity problem and ignore the root structural causes of indebtedness.
• The external debt of developing countries reached a record US$ 11.4 trillion in 2023, which is nearly four times the level of two decades ago and represents 99% of their export earnings.
• The 1980s Cartagena Initiative failed primarily because creditors, led by the U.S. government, used unilateral rescheduling agreements to fracture debtor unity and prioritize short-term relief over systemic reform.
• Three interlocking structural deficiencies—food, energy, and manufacturing value-added deficits—perpetuate the cycle of external debt by creating a structural trade deficit.
• Despite having the potential to produce 1,000 times its anticipated 2040 energy needs through renewables, Africa attracts less than 2% of global renewable energy financing.
• The Global South possesses critical strategic minerals essential for green technology, including 30% of proven strategic mineral reserves in sub-Saharan Africa and 60% of the world's lithium reserves in the 'Lithium Triangle' (Argentina, Bolivia, and Chile).
• The 'Bargain of the Century' proposes that a Global South coalition offer China the opportunity to unload surplus productive capacity and secure mineral access in exchange for transferring the full value chain of manufacturing technologies (e.g., solar PV, wind turbines).
• The authors suggest that South Africa's G20 Presidency and the 4th International Conference on Financing for Development (FfD4) provide a geopolitical window to advocate for a new UN Framework Convention on sovereign debt.

APA

Kaboub, F., & Chiriboga, A. (2025). A COHERENT FRAMEWORK FOR SOVEREIGN DEBT AND ECONOMIC TRANSFORMATION: TOWARDS GLOBAL SOUTH DEBTORS’ COALITION. Institute for Economic Justice. https://iej.org.za/wp-content/uploads/2025/04/IEJ-G20-2-Sovereign-Debt-2025-1.pdf

Chicago

Kaboub, Fadhel, and Andrés Chiriboga. A COHERENT FRAMEWORK FOR SOVEREIGN DEBT AND ECONOMIC TRANSFORMATION: TOWARDS GLOBAL SOUTH DEBTORS’ COALITION. Institute for Economic Justice, 2025. https://iej.org.za/wp-content/uploads/2025/04/IEJ-G20-2-Sovereign-Debt-2025-1.pdf.

Wikipedia

{{cite report |last1=Kaboub |first1=Fadhel |last2=Chiriboga |first2=Andrés |title=A COHERENT FRAMEWORK FOR SOVEREIGN DEBT AND ECONOMIC TRANSFORMATION: TOWARDS GLOBAL SOUTH DEBTORS’ COALITION |publisher=Institute for Economic Justice |date=April 2025 |url=https://iej.org.za/wp-content/uploads/2025/04/IEJ-G20-2-Sovereign-Debt-2025-1.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{kaboub2025coherent, author = {Kaboub, Fadhel and Chiriboga, Andrés}, title = {{A COHERENT FRAMEWORK FOR SOVEREIGN DEBT AND ECONOMIC TRANSFORMATION: TOWARDS GLOBAL SOUTH DEBTORS’ COALITION}}, institution = {Institute for Economic Justice}, year = {2025}, month = apr, url = {https://iej.org.za/wp-content/uploads/2025/04/IEJ-G20-2-Sovereign-Debt-2025-1.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }