NEW YORK CITY: The war in the Middle East is sending shock waves through the global economy, tightening the fiscal space and increasing borrowing costs, UN Secretary-General Antonio Guterres warned on Wednesday as he launched a new initiative that aims to reshape the global financial system to benefit developing nations.
Speaking at the unveiling of the “Borrowers Platform,” he said the rising costs of fuel and raw materials, strains on supply chains, and slowing global growth were compounding economic pressures, particularly for vulnerable countries already grappling with high debt burdens.
“These pressures are intensifying,” Guterres said, noting that developing economies were facing worsening conditions as the cost of borrowing rises.
“Growth is slowing and borrowing costs are climbing even higher, especially for the most vulnerable.”
He framed the new initiative against a backdrop of what he described as a “deeply unfair international economic and financial ecosystem,” arguing that longstanding power imbalances have left developing countries at a structural disadvantage.
The creation of the Borrowers Platform marks a “historic” step toward in efforts to correct those inequities, he said.
Guterres credited countries such as Egypt and Pakistan for leading the effort, alongside a core group comprising Colombia, Honduras, the Maldives, Nepal and Zambia. He acknowledged support from Spain following last year’s Financing for Development conference, which produced the Sevilla Commitment, an intergovernmental framework to address debt and financial reforms, including the issue of high borrowing costs for developing nations.
He also highlighted the role of the UN Conference on Trade and Development as the initiative’s secretariat. The new platform is designed to provide borrowing countries with a long-absent forum through which they can coordinate and share expertise, he explained.
“Creditors have long had dedicated spaces to coordinate (but) borrowers have had no equivalent,” Guterres said, recalling the words an African president who once described a debt restructuring process as one in which “all stakeholders were present at the negotiating table except the country itself.”
He warned that such imbalances have real consequences, with many nations trapped in cycles of debt distress or forced to divert critical public resources toward repayments. Developing countries, he noted, have paid on average more than double the interest rates of advanced economies, with African nations facing rates up to three times higher.
As a result, 3.4 billion people live in countries that spend more on debt servicing than on healthcare or education, Guterres said, describing the situation as one in which nations were being forced to attempt to climb the development ladder “with one hand tied behind their backs.”
He outlined four core objectives of the Borrowers Platform, beginning with accelerated learning for countries navigating an increasingly complex global financial system.
He highlighted a lack of technical expertise and institutional memory as major obstacles, particularly during debt-restructuring processes, noting that the G20 Common Framework for Debt Treatments had completed only a handful of cases.
The new platform will also help countries engage with creditors on more equal terms, enabling them to enter negotiations better prepared and backed by shared analysis and collective experience.
A third objective is to send clearer signals to financial markets. Improved debt management, transparency and data-sharing among borrowers could help reduce borrowing costs and create more fiscal space for development.
The initiative also aims to give developing countries a unified voice within the global debt architecture, something Guterres said has been lacking until now.
He also argued that the platform reflects a shifting global reality as emerging economies steadily increase their share of global gross domestic product while the relative financial might of the traditional powers declines.
“This change is a structural change,” he said, emphasizing that global systems of governance must evolve to reflect new economic dynamics.
While stressing that the Borrowers Platform was not a substitute for comprehensive reform of the international financial architecture, Guterres said it would help to strengthen the case for such reform, underscoring the fact that the true cost of finance is ultimately measured in human terms.
“It’s measured in hospitals and schools … in food, water and sanitation … in jobs, social protection and housing. And it’s measured in people’s lives.”
