Your Excellency, President of the 78th Session of the United Nations General Assembly,
Excellencies,
Distinguished delegates,

I have the honor to deliver this statement on behalf of the Group of 77 and China.

At the outset, the group commends the President of the UN General Assembly for convening this high-level thematic debate on this issue of particular importance.

Excellencies,

The debt challenges of developing countries remain elevated with the external debt reaching a record level of USD 11. 4 trillion in 2022, an increase of 1.9 percent. This has resulted in debt service burdens, including the high debt service costs that crowd out vital investments and constrain progress towards the achievement of the Sustainable Development Goals. In this regard, these unsustainable debt burdens in developing countries are stretching the social safety nets, causing socioeconomic distress, and constraining the achievement of sustainable development, while the multilateral response has been subdued, considering the severity of the situation.

Excellencies,

Debt sustainability and socioeconomic equality for all requires coordinated actions at all levels. Therefore, the G77 and China calls for the urgent measures to achieve debt sustainability and socioeconomic equality for all as follows:

1. An improved global sovereign debt architecture with the meaningful participation of developing countries, allowing for fair, balanced, and development-oriented treatment.
2. Multilateral debt mechanisms that fully address the sovereign external debt and provide an effective, efficient, equitable, comprehensive, and predictable mechanism for managing debt crises in a way that is aligned with the development needs of all developing countries, particularly in low and middle-income countries with the meaningful participation of private creditors in debt treatment.
3. Scale up of debt swaps for SDGs, including debt swaps for climate and nature and debt swaps for food security, to allow developing countries to use debt service payments for investment in sustainable development and taking multilateral measures to standardize the use of these mechanisms, while recognizing debt swaps cannot replace broader debt treatments in unsustainable debt situations.
4. Suspension of the surcharge policy by the IMF considering that the existing structure of surcharges operates procyclical and inequitable since it leaves the most distressed countries bearing the heaviest financial burdens.
5. Strengthening multilateral actions and coordination to address the long-term debt vulnerabilities of developing countries. Debt relief must be coordinated in a process, including under the auspices of the United Nations and consider not only ability to pay, but also development needs.
6. Participation of private creditors in debt relief initiatives.
7. Further strengthening the G20 Common Framework for debt treatment beyond the DSSI (Common Framework) and fully implement it in a transparent, predictable, timely, orderly and coordinated manner, including to increase the fiscal space of countries in debt stress and encourage greater private sector participation through more clarity in assessing comparability of treatment, while also noting that more needs to be done to respond to the needs of countries not covered by current initiatives, including middle -income countries;
8. Adopt debt sustainability analyses that incorporates the needs of fiscal space for investments in sustainable development in its three dimensions.
9. Consideration of the use of state-contingent debt instruments, including climate resilient debt clauses, where appropriate, to provide room to countries hit by shocks with direct impact on their GDP growth prospects such as natural disasters or macroeconomic shocks.

Excellencies,

The international financial architecture has not kept pace with the changing global landscape and has failed to deliver the financing or stability needed to achieve the Sustainable Development Goals. Therefore the G77 and China reiterates its call for the urgent reform of the international financial architecture, including the international financial institutions and their governance structure to better address global challenges, to be equitable and responsive to the financing needs of developing countries, to enhance their effectiveness and to broaden and strengthen the voice, participation, and representation of developing countries in international economic decision-making, norm-setting and global economic governance.

Excellencies,

The G77 and China calls upon the international community, in particular developed countries, and international financial institutions to take the necessary actions to fully implement the Secretary-General's SDG stimulus proposal to tackle the high cost of debt and rising risks of debt distress, to enhance support to developing countries and to massively scale up affordable long-term financing for development and expand contingency financing to countries in need.

Finally, the G77 and China remains committed to engage in the discussions that aim at addressing debt sustainability and socioeconomic equality for all.

I thank you.