Global Call to Action Against Poverty (GCAP) and a broad coalition of civil society organisations endorsed a policy brief calling for urgent reforms to the IMF and World Bank’s Debt Sustainability Framework for Low-Income Countries (LIC-DSF). The civil society warns that the framework, though technical in appearance, has major political consequences that shape loan terms, debt relief and austerity policies in low-income countries.

Download the Joint civil society policy brief here.

The paper urges the Bretton Woods Institutions to adopt a clear quantitative definition of debt sustainability, set binding targets for debt restructuring and include an “ambitious scenario” that accounts for climate and development financing needs. It also calls for correcting long-standing optimism bias in IMF–World Bank growth projections and expanding the indicators used to assess total public and external debt.

A major concern raised is the influence of creditor-dominated boards over debt sustainability assessments. The coalition demands independent debt analyses during restructuring, stronger protection of staff from political interference and greater transparency.

The organisations argue that reforms are essential to ensure debt workouts support, rather than undermine, development, climate action and fiscal stability in low-income countries.

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