The annual United Nations General Assembly resolution on external debt has repeatedly stressed the importance of promoting responsible sovereign lending and borrowing. In December 2010, it emphasized the need for creditors and debtors to share responsibility for preventing unsustainable debt situations and encouraged Member States, the Bretton Woods institutions, regional development banks and other relevant multilateral financial institutions and stakeholders to pursue the ongoing discussions within the framework of UNCTAD’s Initiative to promote responsible sovereign lending and borrowing, while taking into account the work on this issue that is carried out by other organizations and forums.
Identifying agreed principles to guide sovereign lending and borrowing is the first step in this process. Thus, UNCTAD aims to build consensus around a set of internationally agreed principles to prevent irresponsible sovereign financing.
These Principles are still open for discussion and debate. The endorsement process aims to be transparent and inclusive of all UN member states. The consolidated version is a result of extensive international consultations, but may still be subject to finer refinements.
An expert group was established to contribute to the process of drafting these Principles. The group is composed of world renowned experts in law and economics, private investors and NGOs. Senior representatives from the IMF, the World Bank and Paris Club participate as observers of this group. After several formal meetings and exchanges of ideas, these Principles emerged.
UNCTAD is now reaching out to get national and regional feedback on the design and the possible and voluntary implementation process from UN Member States, essentially through Consultative Regional Meetings