Zafar Iqbal
For decades, the architecture of global debt has been built around creditors. The International Monetary Fund, the World Bank, bilateral lenders, and bond markets have all had their coordination mechanisms, their caucuses, their institutional voices. Borrowing countries, by contrast, have sat across the table alone, negotiating individually, learning in isolation, and absorbing conditions that were drafted elsewhere and applied universally regardless of local circumstances. That imbalance, long acknowledged but never structurally addressed, has now produced a modest but symbolically significant response. On the sidelines of the ongoing IMF and World Bank spring meetings in Washington DC, a working group for the Borrowers Platform initiative was formally launched. It is currently in its interim phase, with full implementation expected at the autumn meetings in October.
The Platform will be housed under the United Nations Conference on Trade and Development, which will serve as its secretariat. UNCTAD has been clear about the gap it is meant to fill. Creditor coordination has existed for a long time. Borrowers have had no equivalent space to exchange experiences, share technical knowledge, or build the kind of collective understanding that might, over time, produce better financing outcomes. The Platform is not a debt restructuring body. It is not a collective bargaining forum. It makes no binding commitments on behalf of its members. What it offers is peer learning, shared experience, and a common voice for collective advocacy, all on a voluntary basis. The aspiration, as UNCTAD frames it, is that better-informed borrowers who implement more sustainable policies will over time send a positive signal to markets, reduce investor uncertainty, and prevent rising debt burdens from choking off development entirely.
The numbers that frame this initiative are sobering. Total external debt across developing and emerging economies reached 11.7 trillion dollars in 2024. The cost of servicing that debt now consumes nearly ten percent of government revenue across many of these countries. Fifty-four nations are spending more on debt repayment than on health or education combined. These are not abstract statistics. They represent the compression of public services, the stalling of infrastructure, the shrinking of the fiscal space that governments need to invest in their own people. The Platform is, at minimum, an acknowledgment that these countries deserve a seat at a table of their own.
Egypt has been named chair of the Platform. Pakistan will serve as vice chair. Both selections carry a certain grim logic. Egypt is the largest annual recipient of American military assistance outside Israel, receiving 1.3 billion dollars a year and having absorbed more than 30 billion dollars in total since 2010. Despite that extraordinary inflow, it is currently on its fifteenth Extended Fund Facility programme with the IMF. The thread connecting Cairo to Islamabad is not merely one of shared financial distress. Reza Baqir, who supervised one of Egypt’s previous IMF programmes as head of the Fund’s mission there, was subsequently appointed Governor of the State Bank of Pakistan in 2019. The same intellectual architecture, the same institutional logic, applied in two countries across two continents, with comparable results.
Pakistan’s own record speaks for itself. This is the country’s twenty-fourth IMF programme, again under an Extended Fund Facility. Its foreign exchange reserves have become structurally dependent on rollovers from friendly bilateral creditors. The United Arab Emirates recently recalled a loan of 3.45 billion dollars. Saudi Arabia has pledged an additional 3 billion. The reserves that Pakistan presents to the world are increasingly borrowed rather than earned, a distinction that markets have not failed to notice and that the country’s external vulnerability reflects with painful regularity.
It is against this backdrop that Finance Minister Muhammad Aurangzeb addressed the launch of the Borrowers Platform in Washington. His remarks were confident and, in tone, appropriate to the occasion. The general sentiment, he said, is that existing lending mechanisms remain largely creditor-driven and insufficiently responsive to the unique requirements of borrowing countries. He called on member nations to amplify borrower voices, invite eligible countries to share expertise through the steering committee, and build stronger foundations for a sustainable future.
The sentiment is understandable. The framing, however, misses the essential thrust of what the Platform is designed to accomplish. The initiative is not a vehicle for extracting better terms from creditors. It is not a coalition to renegotiate conditionality or lobby for larger disbursements. Its core purpose is to help borrowing countries learn from one another how to reduce their dependence on borrowing in the first place. Peer learning about expenditure management. Shared experience on fiscal consolidation. Collective understanding of how countries have restructured domestic spending to avoid the sovereign debt trap. These are the conversations the Platform is meant to facilitate. When a finance minister frames it as a mechanism for making the creditor system more responsive, he inverts its meaning entirely.
The debt trap that both Egypt and Pakistan inhabit was not sprung solely by external creditors. It was built, brick by brick, through years of domestic policy failure: current expenditures that were never curtailed, subsidies that were politically protected rather than economically justified, revenue bases that were never meaningfully broadened, and structural reforms that were promised in programme after programme and delivered in none. The IMF’s conditions, however contractionary, are imposed on countries that arrived at the Fund’s door with public finances already in disarray. The severe monetary and fiscal tightening that follows has indeed suppressed growth and deepened poverty. But the solution is not to blame the lender. The solution is to build the fiscal house before the storm arrives.
The Platform does acknowledge a legitimate and important distinction. Countries facing natural disasters, external shocks, or the economic devastation of conflict deserve different treatment than those suffering from self-inflicted policy failures. Pakistan’s IMF Resilience and Sustainability Facility, for instance, is tied to climate vulnerability, and that is an externally imposed burden that justifies multilateral support on more flexible terms. Wars and disasters create debt that no domestic reform could have prevented. These are genuine cases for international solidarity and structural accommodation.
But for countries whose debt burden reflects chronic policy mismanagement, no platform of borrowers will substitute for the hard work of governance reform. The Borrowers Platform, if used wisely, offers Pakistan an extraordinary opportunity: to learn from others, to demonstrate that it takes fiscal discipline seriously, and to build the credibility that would eventually reduce its dependence on the very creditor mechanisms its finance minister criticises. That opportunity will be wasted if Islamabad treats this forum as another venue to seek softer loans rather than sharper policies.
