61st Regular Session of the Human Rights Council Item 3: Interactive dialogue with the Independent Expert on the effects of foreign debt

Mr. President,

In too many nations – particularly in the Global South – debt servicing consumes resources that should nourish the common good: funds urgently needed for basic necessities such as food, clean water, health, housing and social protection. When debt burdens become crushing, States face impossible choices: repay creditors or fulfil basic obligations to their people. This is not merely an economic dilemma; it is a profound moral and human rights crisis. Excessive debt diverts fiscal space, imposes regressive austerity measures, and perpetuates cycles of poverty and inequality, directly impeding the progressive realization of economic, social and cultural rights.

Debtor countries should work to adopt a fiscal system that adheres to the principles of good governance, transparency, accountability and responsibility. Public finance should be based on a relationship of trust between institutions and citizens. When taxation and public expenditure are perceived as fair and oriented towards the common good, social cohesion and voluntary compliance are fostered, thereby expanding the State’s capacity to mobilize resources.

Furthermore, when conflicts arise, human rights obligations must take precedence over debt repayment. Bilateral, multilateral and private creditors must ensure lending practices respect human dignity and do not exacerbate poverty and hardship. Illegal debts, tax competition and predatory lending erode the social contract and hinder States' capacities to meet core obligations.

However, heavily indebted countries cannot achieve this transformation alone. In this regard, Pope Leo XIV affirms that “every effort should be made to overcome the global inequalities […] that are carving deep divides between continents, countries and even within individual societies.”[1]

Thank you, Mr. President.