The ECOSOC meeting was held as part of the commitments established by the Seville Agreement, which requires countries and rating agencies to engage in regular discussions on this topic.
Mohammed emphasized that for many developing countries, servicing debt obligations poses a serious challenge, as the volume reaches nearly $1.4 trillion per year.
She also pointed out that more than 3.4 billion people live in countries where debt payments exceed spending on healthcare and education.
The escalation of conflict in the Middle East, which has increased fuel and raw material prices, further undermines the financial stability of these countries and complicates their access to credit.
Moreover, current ratings often do not take into account the long-term prospects of states.
“Ratings systematically overstate risks without reflecting the actual economic situation and progress of these countries,” added the Deputy Secretary-General.
Often, these ratings are static and focused on the short term, making it difficult for countries to access financing at reasonable rates.At the UN, three approaches to reforming the system were proposed.
“It is necessary to change the approach to risk assessment and shift from speculation to long-term investments,” insisted Mohammed, adding that risk analysis should consider various scenarios and opportunities, not just vulnerabilities.
The second aspect concerns revising success criteria beyond GDP. “GDP reflects value but does not account for true worth. Financial decisions and credit ratings should not be based solely on profit indicators,” she noted.
Additionally, Mohammed proposed revising the “sovereign ceiling,” which limits the credit ratings of the private sector in the country.
It is necessary to reconsider the sovereign ceiling, which may incorrectly limit the credit rating of the private sector, distorting risks and hindering investments.Finally, the third important element of reform should be maintaining accountability for all participants, including agencies and investors.
In conclusion, Mohammed emphasized that credit ratings should become a stimulus for progress: “It is essential to transform credit ratings from barriers into tools for long-term financing and sustainable development.”
Photo on the main page: UN / M. Elias.
