Time to Redesign Global Development Finance

Farmer in Colombia. Credit: Both Nomads/Forus

By Sarah Strack and Christelle Kalhoule
SEVILLE, Spain , Jun 23 2025 (IPS)

Can the Fourth International Conference on Financing for Development (FFD4) be a turning point? The stakes are high. The international financial system—so important to each and every one of us—feels out of reach and resistant to change, because it is deeply entrenched in unjust power imbalances that keep it in place. We deserve better.

Under its current form, the Compromiso de Sevilla – the outcome document of FFD4 adopted on June 17 ahead of the conference – reads like a mildly improved version of business as usual with weak commitments. To avoid being derailed, decision-makers at FFD4 must act with clarity and courage, and here’s why.

With predatory interest rates, the international financial system is pushing hundreds of millions into misery as several nations continue to be shackled by a deepening debt crisis. While millions struggle without adequate food, healthcare, or education – basic services and rights – their governments must funnel billions to creditors.

Shockingly, 3.3 billion people – almost half of humanity – disproportionately in Global South nations, live in countries where debt interest payments outstrip education, health budgets and urgent climate action. This imbalance is particularly pernicious toward women, who bear the brunt of the failure of the gender-blind global financial architecture. This system fails to acknowledge and redistribute care and social reproduction responsibilities, resulting in women, especially those located in the Global South, lacking access to adequate essential services and decent jobs.

“The current model of international cooperation is not working, and its financing is also not working while we are facing a series of interconnected crises,” says Mafalda Infante, Advocacy and Communications Officer at the Portuguese Platform of Development NGOs, sharing their recently released Civil Society Manifesto for Global Justice calling for change and a restoration of fairness at FFD4 and beyond.

“Gender equality perspectives are absolutely central to how we understand global justice and financial reform, because let’s be clear: the current system isn’t neutral. It produces and reinforces inequalities, including gender-based ones. The debt crisis and climate emergency disproportionately affect women and girls, especially in the global south. We’ve seen it again and again when public services are cut, when healthcare is underfunded or when food systems collapse, it’s women who carry the heaviest burden. But at the same time, feminist economics also offer solutions. They challenge the idea that GDP growth is the ultimate goal. They prioritise care, sustainability and community well-being. They demand that financing should be people-centered and rights-based and accountable as well. So the role of civil society has been to bring these ideas into the FFD4 space to connect macroeconomic reform with everyday realities and to insist that justice – economic, climate, racial, gender justice – is indivisible,” Infante adds.

FFD4 offers an opportunity to reimagine a financial architecture that can be just, inclusive, and rights-based. This is not a technical summit for experts alone. It is the only global forum where governments, international institutions, civil society organisations, community representatives and the private sector sit together to shape the future of global finance, and it’s happening after 10 years since the latest edition in Addis Ababa.

But there are realities that decision-makers just can’t shy away from. While some powerful countries borrow at rock-bottom rates, other nations face interest charges nearly four times higher. We must thus ask ourselves: is this really a pathway to truly sustainable development or a continuation of profound financial injustices through something akin to “financial colonialism” ?

“Many countries like us in the South, are totally concerned that there can be no development with the current debt situation not discussed. The issue of debt vis-a-vis taxes is vitally important. The money that countries are collecting from the domestic mobilization of resources is all channeled to self-debt servicing. And debt handcuffs social policy. Without these resources, these countries cannot deliver on public services like health and education. There can be no way of improving people’s social indicators without addressing the question of debt stress,” says Moses Isooba , Executive Director of the Uganda National NGO Forum (UNNGOF).

Forus is attending FFD4 as a global civil society network with one clear message: the current model must change.

We call for a radical transformation of global finance that moves away from a system that enables “tax abuse” and outsized influence from a powerful few.

A crucial step for transformation is creating a UN Convention on Sovereign Debt to fairly and transparently restructure and cancel illegitimate debt, as many countries spend more on debt than on essential services.

In today’s context of shrinking development aid, the role of public development banks is ever more important in support of Agenda 2030 and the Paris Agreement on climate change. Forus therefore calls on public development banks to work in partnership with civil society and community representatives through a formal global coalition and local engagement to ensure development finance is locally-led and reflects the real needs of people, rooted in consent and mutual trust.

Official development assistance (ODA) must be protected and increased, reversing harmful aid cuts that damage civil society as well as urgent and basic services. The UN has warned that aid funding for dozens of crises around the world has dropped by a third, largely due to the decrease in US funding slashed US funding and announced cuts from other nations.

Finally, governments should support a new UN Framework Convention on International Tax Cooperation, adopting gender-responsive, environmentally sustainable fiscal policies while disincentivizing polluters and extractive industries.

“Development financing must not perpetuate cycles of debt, austerity, and dependency. Instead, it must be grounded in democratic governance, fair taxation, climate justice, and respect for human rights. It’s also crucial to promote inclusive decision-making by strengthening the role of the United Nations in global economic governance, countering the dominance of informal and exclusive clubs such as the OECD,” says Henrique Frota, Executive Director of the Brazilian Association of NGOs (ABONG) and former C20 Brazil Chair.

FFD4 must ensure that there is a genuine space for civil society engagement, where all voices are heard and can influence financial decision making, to strengthen accountability and transparency, and to promote greater inclusion.

“The voices of the communities most affected should be included, otherwise large-scale development projects are not sustainable. Local communities and local civil society are the point of contact to make implementation more inclusive,” says Pallavi Rekhi, Programmes Lead at Voluntary Action Network India (VANI), reinforcing that FFD4 must shift from vague aspirations to binding, systemic reforms that rebalance power and serve justice.

“Don’t take stock of what has been done. Instead, look at what has not yet been done at this conference and you will see the immense challenges that lie ahead for the future of our planet,” says Marcelline Mensah-Pierucci, President of FONGTO, the national platform of civil society organisations in Togo.

“The continuous cycle of unfairness and social inequality must come to an end. The time to act is now,” adds Zia ur Rehman, Chairperson of Pakistan Development Alliance.

For many, the road to Sevilla has been long and hard and still, the world’s majority are left behind on this journey. The hard work continues after FFD4 on the need for bold leadership, real action and transformative change that can lead to a more effective and responsive global financial architecture.

IPS UN Bureau

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