Maria RON BALSERA

Executive Director, Center for Economic and Social Rights (CESR)

Multilateralism today stands at a crossroads. It is confronted by resurgent authoritarianism, geopolitical rivalry, rising populism, armed conflict and the deliberate erosion of international norms. Global inequalities are widening, rights and freedoms are under sustained attack, and climate action is dangerously stalling. Yet, it is precisely in these volatile times that the world needs strong, credible and inclusive multilateral cooperation.

The EU’s support towards the Compromiso de Sevilla, the text adopted at the third meeting of the fourth preparatory committee for the Financing for Development Conference (FfD4) has led to it adoption by consensus (despite the US pulling out of the process at the eleventh hour). However, the recent voting down of the financing development report in the European Parliament, and the EU’s position during the negotiations – particularly in the areas related to debt management – have questioned the bloc’s global credibility in reforming the international financial architecture.

The global financial architecture, still largely shaped by colonial legacies, perpetuates deep-rooted inequalities. Its institutions and rules continue to prioritise the interests of wealthy nations, corporate elites and private creditors, exacerbating what has become an interlocking crisis of debt, climate and inequality. This system undermines sustainable development and fuels disillusionment with democracy and multilateral cooperation alike.

Against this backdrop, the forthcoming FfD4 offers an unmissable opportunity. It is a moment to reaffirm the European Union’s commitment to peace, human rights, democracy, social justice, sustainability and solidarity – and to promote a fairer global financial order that serves people and planet.

A debt crisis deepening inequality

Global debt has surged to unprecedented levels, surpassing $100 trillion. Developing countries bear the brunt of it, with debt rising twice as fast as in wealthy states and borrowing costs for African countries reaching up to 12 times those of Germany. The burden of debt repayment is depriving governments of resources urgently needed for healthcare, education, infrastructure and climate resilience. This is not just a financial issue – it is a political and human rights crisis. Fiscal austerity, often imposed as a condition for loans, strips funding from essential public services, exacerbating poverty, social unrest and gender inequality. The unpaid care work, predominantly shouldered by women and girls, fills the gaps left by hollowed-out welfare states.

Thus far, ‘innovative solutions’ driven by international financial institutions remain rooted in market-based mechanisms: unlocking private sector finance, de-risking strategies and scaling carbon markets. These approaches deepen dependence on debt and reinforce extractive economic models based on resource exports and industrial agriculture, undermining environmental and social rights in the process.

Human rights as a guiding framework

There is an urgent need to reposition human rights at the heart of global economic governance. Debt repayment must never supersede a state’s legal duty to guarantee the economic, social and environmental rights of its people. Human rights obligations require governments to allocate the maximum of available resources to realise these rights – including through progressive taxation and responsible debt management.

Existing debt restructuring mechanisms are failing. Their ad hoc, opaque processes overwhelmingly favour creditors and perpetuate cycles of unsustainable debt. What is needed is a transformative, rights-based approach: one that integrates principles of transparency, equity and national sovereignty, and establishes a statutory debt resolution mechanism under United Nations auspices. This would not only promote fiscal justice but also prioritise investments in social protection, education, healthcare and climate action. Crucially, human rights obligations extend to private creditors, requiring them to engage in good faith, uphold transparency, and assess the human rights impacts of their financial practices. Given the growing proportion of sovereign debt held by private investors, this is no longer optional – it is essential for protecting the public good.

Reforming global economic governance

The global economy continues to concentrate wealth, resources and decision-making power in the hands of a few. Financing for development is at a critical juncture, and governance reform is indispensable to addressing historical injustices and today’s systemic inequalities. FfD4 must prioritise economic justice, including establishing a UN Framework Convention on International Tax Cooperation (UNTC) and a UN rights-based statutory framework for sovereign debt restructuring. Such reforms would correct structural imbalances that have long marginalised debtor countries and the Global South.

For the European Union, this is a chance to lead by example. Amid shrinking development budgets and rising nationalist narratives, the EU should champion progressive reforms that strengthen multilateralism, protect public goods, and deliver tangible benefits for people and the planet everywhere. The recent defeat of the report on financing development ahead of the FfD4, where the European People’s Party (EPP) sided with the far right to reject it, undermines commitments to the UN Agenda 2030 and weakens the EU’s global credibility ahead of a key conference. This move is not just political, it jeopardises poverty reduction, gender equality and vital social sector funding at a critical moment.

Toward a rights-based economy

The Center for Economic and Social Rights has long advocated for a rights-based economy: one that centres on dignity, equity, inclusion and solidarity. Human rights standards bring force and specificity to these values, strengthening proposals for tax justice, debt restructuring and sustainable development.

FfD4 is a historic opportunity to reclaim multilateralism for the many, not the few. By embedding human rights in global financial governance, the international community can create a more effective, inclusive and sustainable system – one that offers credibility, legitimacy and hope for future generations.

The moment to act

Human rights form one of the three founding pillars of the United Nations. At a time of unprecedented threats to multilateral cooperation, doubling down on human rights would strengthen global solidarity, foster mutual respect, and advance collective action in line with states’ international obligations. By integrating human rights principles into financing for development, the international community can finally turn fiscal and financial policy into tools for equity, sustainability and justice. It is time to politicise inequality, call for fiscal justice and place human dignity at the centre of economic governance.

This is the moment to reclaim multilateralism for people and planet. Let us ensure FfD4 lays the foundation for a just, inclusive and rights-based global economy – one that renews trust, delivers fairness and secures a sustainable future for all. FfD4 must mark the start of a new era – one where finance serves people, rights come before profits and multilateralism works for all. The future depends on it.

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