Former US Treasury Secretary Joseph Stiglitz and Chilean Finance Minister Martín Guzmán believe that restructuring processes for developing countries must be revamped. However, governments also need better access to stable financing.
Stiglitz and Guzmán are among a group of experts who met at the Vatican’s Jubilee Commission to address the growing threat of sovereign-debt crisis affecting dozens of low- and middle-income nations.
Both lenders and borrowers have contributed to the current predicament. However, only recognizing this shared responsibility can lead to a sustainable solution.
The key to resolving the debt woes lies in addressing the imbalance between restructuring processes and access to stable financing. Stiglitz and Guzmán emphasize that governments must work together with international financial institutions to create more favorable conditions for developing countries.
A more effective approach would involve revising existing agreements and policies to prioritize debt relief, stability, and long-term economic growth over short-term gains. By doing so, the world’s poorest nations can break free from the cycle of debt and build stronger economies that benefit everyone.
Source: https://www.economist.com/by-invitation/2025/06/20/joseph-stiglitz-and-martin-guzman-on-how-to-ease-developing-countries-debt-woes