In todays meeting in the UN, Norway emphasized that a new mechanism on debt resolution must cover all debt, react quickly, be independent and look at more than just debt sustainability.
"Many developing countries still struggle with debt, and huge amounts of money is spent paying interest on old loans. This affects people in poor countries the hardest", says State Secretary of Development Arvinn E. Gadgil.
The last seven years, Norway's three goals for sovereign debt in development countries has been:
- Work for international guidelines for responsible financing of debt.
- Review Norway’s loans to developing countries
- Work for an international sovereign debt mechanism.
Today the UN met to discuss a new, better and more fair mechanism for sovereign debt. Norway has decided to sign an agreement with the United Nations Conference on Trade and Development (UNCTAD) to gather all stakeholders to discuss and shape a mechanism.
"A mechanism must not only restructure debt, but ensure that there is no need for a new restructuring", commented Uganda's Minister of Finance Ms. Maria Kiwanuka during today's meeting in the UN.
In April UNCTAD passed its Principles on Promoting Responsible Sovereign Lending and Borrowing . 70 countries and civil society and organizations contributed to this work.
Read the Principles here (.pdf).
Norway was the first country in the world to do a review of its loans based on these Principles this summer.
"The Principles are a small revolution for the debt issue. For the first time the international society defines responsible financing of debt. I'm proud that Norway has facilitated setting the gold standard in this area, but much work still remains to establish the new mechanism", says Gadgil.