New Rules for a Broken System

The concept of sovereign debt sounds really simple. A country borrows money—usually from other countries, big public banks, or private institutions. And then it pays that money back, with interest. But the reality of sovereign debt is much more complicated, because the rules are stacked against countries that borrow money, many of which are in the global south. This has led to the situation where close to half of all African countries are spending more money just to pay the interest on their debts than they do on essential services like education or health care.  In this episode, we’ll discuss how this all happened. And we’ll hear about some of the ways people are rethinking sovereign debt to make sure countries looking to finance their future don’t have to mortgage away their present.  Host Karen Given speaks with Jason Braganza, the executive director of the African Forum and Network on Debt and Development. Her other guest is Martín Guzmán, a professor of international and public affairs at Columbia University and member of the Pontifical Academy of Social Sciences at the Vatican. *********** If you'd like to learn more about the ideas and actions to create new rules for a broken system, please check out “Global Governance Reimagined,” a special report from FP Analytics. The views and opinions expressed in Global Governance Reimagined do not necessarily represent the views, opinions, or endorsement of FP Analytics or the Ford Foundation. And remember, this is an ongoing conversation. Discussions about changing the rules of foreign aid, sovereign debt, and global finance are continuing at the U.N. General Assembly, taking place now in New York, and beyond. Be sure to check out coverage from Foreign Policy.  New Rules for a Broken System is produced by FP Studios with the support of the Ford Foundation.

The rules of global governance have come to cement a power structure between the global north and the global south that has allowed a legacy of injustice and exploitation to fester, even to the present day. Over the next three episodes, we’re going to explore more deeply what the current economic system looks like and the ways people are pushing back and demanding a more equitable balance of power. We’ll talk to those who are challenging entrenched norms and see what tactics are successful and where they’re still struggling to be heard. And we’ll talk about what’s at stake if the system of global governance is not rebuilt. We’re dividing this series into three key areas that are overdue for a major overhaul: foreign aid, sovereign debt, and international financial institutions. This episode: fixing foreign aid.  Host Karen Given talks through the issue with Harpinder Collacott, the interim executive director of the Global Public Investment Network. Later, we hear from Gunjan Veda, who serves as the global secretary of the Movement for Community-Led Development.  *********** If you'd like to learn more about the ideas and actions to create new rules for a broken system, please check out “Global Governance Reimagined,” a special report from FP Analytics. The views and opinions expressed in Global Governance Reimagined do not necessarily represent the views, opinions, or endorsement of FP Analytics or the Ford Foundation. And remember, this is an ongoing conversation. Discussions about changing the rules of foreign aid, sovereign debt, and global finance are continuing at the U.N. General Assembly, taking place now in New York, and beyond. Be sure to check out coverage from Foreign Policy. New Rules for a Broken System is produced by FP Studios with the support of the Ford Foundation.

International financial institutions, or IFIs—especially the World Bank and International Monetary Fund (IMF)—are part of a system that was established 80 years ago. And since then, these organizations haven’t changed much, including in terms of their governance structures and who has a seat at the table. This has led to a system that doesn’t meet the needs of many countries, including many in the global south. The IMF and World Bank are powerful players. Their stated missions are different but related. The IMF seeks to foster international financial stability, while the World Bank’s stated goal is to “end extreme poverty and boost shared prosperity on a livable planet.”  Today, we’re going to dive deeper into how IFIs are part of an asymmetrical power system in which countries, particularly in the global south, find themselves without sufficient decision-making power. We’ll talk about how IFI policies sometimes push austerity rather than opportunity and how some of the tools for development that you often hear spoken about in a positive way—such as public-private partnerships—might actually further entrench an unbalanced system at the expense of the majority of the world’s citizens and the planet.  Host Karen Given speaks with Daouda Sembene, the founder and CEO of AfriCatalyst, a global development advisory firm based in Dakar, Senegal, and Nairobi. He’s also a former IMF executive director. The other guest featured in this episode is Luiz Vieira, the coordinator of the Bretton Woods Project. *********** If you'd like to learn more about the ideas and actions to create new rules for a broken system, please check out “Global Governance Reimagined,” a special report from FP Analytics. The views and opinions expressed in Global Governance Reimagined do not necessarily represent the views, opinions, or endorsement of FP Analytics or the Ford Foundation. And remember, this is an ongoing conversation. Discussions about changing the rules of foreign aid, sovereign debt, and global finance are continuing at the U.N. General Assembly, taking place now in New York, and beyond. Be sure to check out coverage from Foreign Policy.  New Rules for a Broken System is produced by FP Studios with the support of the Ford Foundation.

There’s an undercurrent of deep concern in the development world, and the debate about how to solve these issues is urgent. In a special three-part series recorded live at the United Nations 4th International Conference on Financing for Development, hear from people who think that in order to solve the problems we face, the current global economic system needs to be fundamentally reimagined. New Rules for a Broken System is produced by FP Studios with support from the Ford Foundation.