UK Calls for New Debt Deal for Developing Countries at IMF and World Bank Meetings

The United Kingdom has called for a "fundamental reset" of the global financial system for developing countries, including a new deal on debt, at the World Bank and International Monetary Fund Annual Meetings in Bangkok.

Foreign Secretary Ed Miliband set out the proposals in a speech on 14 October at an event hosted by the Rockefeller Foundation. He attended the meetings as the UK's Governor to the World Bank.

The Foreign, Commonwealth and Development Office said Miliband is the first British Foreign Secretary to attend the World Bank Annual Meetings in that role.

Four Priorities

The government listed four priorities for reform: action on unsustainable debt through the multilateral development banks, more private investment, stronger resilience and preparedness for disasters, and faster action in countries affected by conflict.

On debt, it proposed that the development banks offer longer repayment terms and better rates where appropriate. It also called for faster restructuring for countries that need deeper relief.

"Debt servicing costs are at a 25-year high in sub-Saharan Africa," Miliband said, according to the published transcript. He said more than three and a half times as much was spent there on debt servicing as on education.

"So we need a new deal on debt, a deal that supports countries to repay over longer time horizons and, crucially, refinancing with better rates to give developing countries precious fiscal space," he said.

He said debt restructuring through the G20 Common Framework should be faster, and that restructuring should not be able to be blocked by a single private lender.

Small Island States and Disaster Clauses

Miliband said the countries that had done least to cause the climate crisis faced its most extreme effects. "But it is small island states and many other developing countries for whom this crisis is existential," he said.

He said climate vulnerability was "piled on top of high levels of debt servicing" for many of these countries.

He called for "much stronger private sector take-up of so-called pause clauses" that let countries hit by major shocks defer debt payments.

The government said only 2% of crisis finance is arranged in advance, although 35% of crises are predictable. It said a £25 million UK investment this year had mobilised more than £150 million of private finance for climate insurance in low-income countries.

Miliband linked the proposals to a series of shocks. He cited rising food and fuel prices resulting from the Iran war, Russia's invasion of Ukraine and the Covid pandemic. He said countries were bracing for "the worst El Nino on record".

He also said the UK would convene an international summit on illicit finance in 2027.

Other Announcements

The FCDO said British International Investment, the UK's development finance institution, would deliver US$1.6 billion of climate finance across South-East Asia over five years. About half is to come from BII and a similar amount from private investors.

The government said the UK has committed £1.98 billion over three years to IDA21. The World Bank's International Development Association provides grants and low-interest finance to the poorest countries.

The speech came a day after the IMF published its October World Economic Outlook at the Bangkok meetings. An IMF blog post on the report projects global growth of 3.1% in 2026 and 3.4% in 2027. It forecasts global headline inflation of 4.7% this year, easing to 4.1% in 2027.

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Photo: Ed Miliband speaks on a panel at the Rockefeller Foundation event in Bangkok on 14 October 2026. (photo credit: Ben Dance / FCDO)

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