Reforming Finance, Advancing Social Progress: Insights from the Sevilla Commitment

The global financial system is failing to meet the needs of developing countries. ODA dropped 7 percent in 2024, foreign direct investment continues to decline, and borrowing costs are at their highest in over a decade. Over one billion people live in countries where external debt servicing eats up more than 20 percent of government revenues. These constraints are preventing governments from investing in basic services, let alone long-term development and social progress. The Sevilla Commitment, adopted at the Fourth International Conference on Financing for Development in 2025, responds with a three-part agenda: scaling up investment for the SDGs, addressing unsustainable debt burdens, and reforming the international financial architecture to better reflect today’s realities.

Scaling investment through development banks
Multilateral and public development banks play a central role in the proposed investment push. The Commitment calls to potentially triple MDB lending by optimizing capital, rechanneling SDRs, and leveraging tools like FX EDGE and Delta to reduce currency risk. It also urges MDBs to improve lending terms—longer grace periods, lower fees, and more local currency lending—while maintaining financial sustainability. But it’s not just about volume. Countries want better impact measurement, greater alignment with national priorities, and stronger involvement of local communities in investment decisions.

Debt sustainability is non-negotiable
High debt service burdens are stalling development. The Sevilla Commitment sets out measures across the debt cycle: improving transparency, enabling fair and timely restructuring, and reforming credit rating methodologies to reflect long-term investment potential. A proposed global debt data registry and borrower platform aim to increase accountability and shift the balance of voice in the debt system. Innovations like debt swaps for development and new regional credit rating agencies are also gaining traction. The goal is not just to manage debt, but to unlock fiscal space for the future.

A more inclusive financial architecture
Developing countries make up over 75 percent of IMF members but hold only about one-third of the vote. The Commitment renews calls for quota reform and better representation, including at leadership levels. It also highlights the distortions caused by outdated risk-weighting rules. Current regulations penalize infrastructure and SME lending in developing countries, even when risks are lower over the long term. International standard-setters are invited to reassess how these rules affect investment in sustainability, climate resilience, and inclusive growth. Countries also call for regular high-level dialogue on credit ratings, involving regulators, agencies, and public institutions.

Towards coherence, country ownership, and social progress
The Sevilla Commitment emphasizes that development finance must be coordinated, inclusive, and country-led. National financing strategies should guide donor alignment, and inclusive platforms should bring together governments, development banks, the UN system, civil society, and private actors. Development cooperation must go beyond short-term projects and build long-term capacity and mobilize domestic resources. At its core, the goal is to ensure that financing systems actually enable progress where it matters most: improved livelihoods, strengthened public services, and inclusive social development.

The report by the Secretary-General, “International financial system and development” (A/80/331), outlines the challenges and opportunities facing the international financial system and presents the outcomes of the Fourth International Conference on Financing for Development, including the Sevilla Commitment’s proposals to scale investment, strengthen debt sustainability, and reform global financial governance.

Read the full report here.