Redesigning development finance for a new era

The global financial system is outdated and unprepared for modern challenges. With nearly half the world’s population living in countries spending more on debt repayments than on health, education, or food, and with official aid shrinking, leaders in low- and middle-income countries are demanding a fundamental redesign. This movement is driven by three key pillars: revenue, debt relief, and investment. To address revenue creation, officials are building a United Nations-led framework to reform global tax rules, giving low- and middle-income countries a voice in how they raise their own revenue. For debt relief, governments discussed establishing a "borrowers club" at the Fourth International Conference on Financing for Development, or FfD, in Sevilla, Spain, earlier this year to coordinate their demands. And to build investment, private industry is being brought to the table en masse. With traditional aid declining, development finance institutions are focused on unlocking private capital, arguing that the perceived "risk" in developing markets is just that — a perception. These aren't just technical fixes. They hint at a new vision for a financial system that is more inclusive, more just, and more resilient to the shocks of the 21st century.