If all countries participate in the Multilateral Sovereign Debt Resolution Mechanism, will they be able to make efficient decisions?
While all countries would participate in defining and establishing a Multilateral Sovereign Debt Resolution Mechanism, as well as the principles and parameters for debt restructuring, it doesn’t mean they will all take part in the debt restructuring processes under the mechanism. This will depend on the final composition and structure of the body. Instead, participation means all countries will have to agree on the rules, principles, and structures for the mechanism to deliver fair, durable, timely, and comprehensive debt resolution.
Additionally, once the rules, principles, and parameters of a fair debt restructuring are collectively decided, a debt resolution body, also defined by all member states, will have to make sure that these are applied in debt restructuring and cancellation processes, at the request of borrowing countries.
While UN processes may face challenges such as bureaucracy and competing interests, its ability to convene all countries fosters comprehensive participation and equitable decision-making, enhancing the likelihood of sustainable and universally accepted outcomes. Unlike forums dominated by specific groups or exclusive memberships like the Paris Club, which can be criticised for biases and blind spots, a UN intergovernmental process would strive for inclusivity and representation from all member states