Foreign Secretary, Ed Miliband, speech: A global financial system that works for all – action on debt, investment and resilience
The Foreign Secretary delivered a keynote speech at a Rockefeller Foundation event in Bangkok, where he proposed action on developing countries’ debt, private investment, support for fragile states and resilience to shocks set to be intensified by El Nino
So, look, I come to this event very conscious that I’m sharing a panel with people who know much more about these issues than I do. What am I trying to do in my remarks before you get onto the real experts on the panel?
I want to try and offer political leadership on the part of the UK on these issues, and to explain why I believe political leadership on the part of the UK is right, is necessary, and I believe can make a difference, particularly over the coming year as we approach our G20 presidency. And this is my argument today.
First, I come to these issues, to these challenges, believing that the UK’s foreign policy must confront issues of debt development and climate, for reasons of both values and interests, and I want to explain what I mean by that.
Second, I want to take inspiration from past UK leadership, but I want to recognise that today’s agenda in 2026 is very different from the challenges we confronted 20 years ago.
And third, I want to set out some thoughts about how the UK wants to take these issues forward. But first, the case for action.
In my first week as foreign secretary, I confirmed I would serve as Governor to the World Bank, and I believe I’m the first ever British Foreign Secretary to attend the annual meetings in this role.
Why did I decide to do this? Because the issues of climate, development, and debt matter profoundly to me. I know from my experience working on climate for nearly two decades that the countries that have done least to cause the climate crisis face its most extreme effects. And if 20 years ago we talked about the climate crisis as a theoretical future threat, we now know it is a present-day reality for many countries, including our own.
But it is small island states and many other developing countries for whom this crisis is existential. And I also know that for many, this vulnerability on climate breakdown is now piled on top of high levels of debt servicing and the urgent need for poverty reduction.
Now, this is a values case for action, but I believe it is also matched by our national interest as the UK, because in the interconnected world we live in, the opportunities and challenges we confront are collective. We can all benefit from prosperity and growth across the world. Emerging markets can help our economic gains for themselves but also help spur global growth.
And it is true of the challenges we face as well. Climate is a national security issue, and this is one of the things I’m emphasising in my role as Foreign Secretary, but these are national security issues that cross borders.
This is a collective action problem because issues of global food security, energy security, migration will affect Britain if we do not tackle them.
And the same is true on debt, development, and fragility. A foreign policy, in my view, that ignores the root causes of conflict in the world is one that is wholly inadequate to genuinely defending our security.
So that’s the first part of my remarks. Why I am here, and I’m determined the UK plays a leading role. Second, I take inspiration from the past and what UK leadership, working with others has achieved.
I was an advisor in the Treasury in the 2000s working with Gordon [Brown] and Shriti [Vadera] on Development and Debt in the run up to Gleneagles in 2005, the biggest debt relief intervention for a generation. I even remember being phoned and shouted out by Bob Geldof, although at the end of the conversation he made clear that he thought I was Ed Balls, my colleague.
But now that action from two decades ago, as well as what was done in the HIPC [Heavily Indebted Poor Countries] Initiative in the 1990s, continues to make a difference.
But the world is different, and I cite these examples not to say we rerun the past, but also to say how are things different and how we must rise to the level of ambition of the previous era. So, how has our thinking changed?
I think I think first of all, we know that this must be a partnership of equals as we think about tackling these questions, not a rich world dispensing help to poorer countries. And we also know, and this is something that Shriti has very much emphasized in her work, of the opportunities for growth in emerging economies.
This is an opportunity story, not just a deficit and challenges story, and I think this is a very, very important part of the picture that we are painting.
We also, though, have to acknowledge the profound moment of challenge that we face as a world, even more than 20 years ago. When foreign secretaries come to events like this, they get a [diplomatic] telegram, as we call it, a Diptel. In my case, from Vel Gnanendran, our representative on the World Bank board, and as Vel pointed out in his Diptel, we have a world where there is more conflict than at any time since the Second World War.
We see rising food and fuel prices as a result of the Iran War, which comes on top of Russia’s invasion of Ukraine, which came on top of COVID, and we see climate damage hitting developing countries as we brace ourselves for the worst El Nino on record.
That is quite a portfolio of challenges, a perfect storm of challenges, and at the same time, we see greater fiscal strain in richer countries. ODA spending continues to play a critical and valuable role in the UK’s work, but in common with others, it is reduced. I say all this about the world having changed and about the challenges, so we get the solutions for today and the future right.
And I want to emphasise this point: the same issues as 20 years ago persist about the fundamental failings. This is the title, in a way, of today’s event: the failings of the global financial system and indeed of the global order to properly serve developing countries, and that includes the imbalances of power we see between Global North and Global South.
The manifestations of this imbalance, the nature of the challenges may have changed, but the injustice hasn’t, and that’s why we’re determined to bring the same level of ambition as we did back then.
Third, then this is the third part of my remarks. This takes me to what do we do about it, and this is incredibly important. It’s easy to commentate on the world, but the point of political leadership is not to commentate; it is to act.
One of my predecessors from some time ago, Lord Carrington, used to say - I’m told, I wasn’t around at the time - at the end of meetings at the Foreign Office, ‘and so’. In other words, ‘and so, what are we going to do’? And we’re not short of insightful proposals from successive G20 presidencies, from coalitions such as the Bridgetown Initiative (I was with [Prime Minister of Barbados] Mia Mottley earlier on today), President Macron’s ‘four Ps’, and the important Accra Reset.
But how do we translate it into action?
I said earlier that next year the UK takes the chair of the G20, and I wanted to use this moment to lay out some ideas today around areas we can take action: around debt, around investment, around resilience, and around fragility. And I’ll say something briefly about each of them.
First, on debt, the debt problem may have changed, but its impact, if anything, is worse than 20 years ago.
Debt servicing costs are at a 25-year high in sub-Saharan Africa. Over three and a half times more is spent on debt servicing than on education. And this is in part because the Global South is paying the price for rising interest rates in wealthier countries, and the Rockefeller report shows this very well.
Many of these countries’ debt may be sustainable over the longer term, but the short-term repayments are crippling. And while many are not defaulting on their payments, they are being forced, if you like, to default on the lives of future prospects of future generations. 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.
And we’re right to talk about the private sector. And I was at an event this morning, obviously, it’s a theme of the Annual Meetings, but we can’t ignore the issue of fiscal space.
I do want to acknowledge the work the World Bank has already done on these issues, but we need all of the [multilateral development banks] MDBs to go further, as well as debtor countries delivering their end of the bargain through economic reform.
Now, there is a small number of countries, and again, this was pointed out in the Rockefeller report, that need deeper relief. And this deal must also deliver faster debt restructuring through the G20 Common Framework, and we’ve got to improve the debt architecture in the longer term, so we don’t find ourselves in this position again, including ensuring that debt restructuring can’t be blocked by a single private lender.
But I think it is also the case, and I know there is debate about this, that we can make progress on this agenda through the full implementation of the review of Capital Adequacy Frameworks.
We know that some MDBs are not even making full use of the headroom they already have to provide greater funding. So using their balance sheets, and this could release 10s of billions or even more fiscal space.
There was a Standard and Poor’s report recently, which suggested hundreds of billions of fiscal space could be opened up by leveraging the balance sheets of the of the MDBs.
I also want to just say, in this context tackling the issue of dirty money is also crucial. Africa alone loses an estimated $90 billion each year in illicit capital flows, outstripping both aid and foreign direct investment. As a global financial centre, the UK has a responsibility to play our part, and we’re going to convene an international summit in 2027 on illicit finance.
And we will also continue to back partner countries’ own efforts to raise higher domestic revenues and to secure the international tax revenues they are owed.
So that’s the first point that I want to make on debt. Second, we know we can’t only focus on debt and public investment. We know it’s part of the story, but not the only story.
And this is the point about private capital. And I do think this is an inspiring agenda. And I do want to acknowledge what Ajay has done at the World Bank, as Shriti pointed out this morning at a panel discussion, trebling the amount that has been released in terms of private capital leverage through the World Bank. We know global savings are worth hundreds of trillions of dollars. We know that capital stays overwhelmingly in rich countries. Even a fraction of it would make a huge difference to lower-income countries.
Now, the UK government has brought together pension funds, insurance companies, commercial banks, and others through our EMDE [Emerging Markets and Developing Economies] Investor Task Force, and this has highlighted the possibilities: how the multilateral development banks and bilateral development finance institutions need to overhaul the way they work to vastly improve their ability to crowd in the private sector by sharing risk and building the pipeline of opportunities.
And there’s a really interesting aspect to this, which is that the private sector seems to overestimate the risk of investments in developing countries, because last week the MDBs published data on their investments, and that shows the returns, not just the risks, that investors can expect in emerging markets.
Individually, the MDBs are doing good work, but collectively they can go much further, including by creating asset classes that attract far greater volumes of capital, and by deepening domestic capital markets. So that’s something about the private capital and the difference it can make.
Third, I want to make a point about resilience, because we can make headway on fiscal space, and we can make headway on investment, and yet still see gains wiped out by repeated climate shocks and natural disasters.
And this is something that we cannot ignore. Maybe it could have been ignored 20 years ago, but it can’t be ignored in the world we live in in 2026.
Extreme heat, floods, droughts, hurricanes, and wildfires. You all know it in the audience, destroying livelihoods, displacing populations.
I’m doing an event tomorrow with the Nepalese finance minister, precisely about this question, and we know what happened in Nepal only very recently.
Now, of course we need to carry on our work to reduce emissions. But, and it’s really important to say this: adaptation and resilience on its own can’t address this problem if we don’t address mitigation and emissions. But we also know that many climate change effects are already locked in, so we need a fundamental shift from financing disaster response after the fact to investing in preparedness and resilience before the crisis hits.
And we have to make resilience central to creating a financial system that works for all.
That means better data, better early warning, and better infrastructure that can withstand or recover quickly from shocks. But - and this is the key point I want to make - we also need finance teed up in advance of crises, so that governments get rapid support. Currently, only 2% of crisis finance is prearranged, despite, and you might think, well, how can it be pre-arranged, despite 35% of shocks being predictable.
Time is of the essence to save lives, limit costs, and limit damage. And we know that pre-arranged finance, including insurance, works. It enabled rapid payouts of over $600 million to help Jamaica get back on its feet after Hurricane Melissa. It paid out drought insurance in Ethiopia, Kenya, and Somalia. We need to make these approaches the norm.
And we need much stronger private sector take-up of so-called pause clauses to countries hit by major shocks to defer debt payments.
The last point I want to make is on fragile states. This is gloomy, I’m afraid.
This decade could be the first in more than a generation without meaningful progress in reducing extreme poverty, which blights the life chances of over 800 million people.
Previously, ending extreme poverty was not simply a phrase; it was within reach. But that progress has not only stalled; it is being reversed. And this picture is inextricably linked to conflict and fragility, countries where power politics work directly against development and where the consequences of instability transcend borders and cross continents. Places like Sudan and Afghanistan, where we must confront the drivers of conflict and target our efforts accordingly, including working with women and girls who so often pay the heaviest price.
Now, the reason I make this point is we can’t simply say that because a government is failing its people, we will do so as well. So, I welcome the World Bank’s new strategy for improving its work in these difficult contexts and urge it to be fully implemented. But the entire international system needs to change in relation to fragility. The MDBs, IMF, and UN should work together from the outset in ways that build on local leadership. And the MDBs must take action to end the wasteful duplication of their processes.
Every unnecessary delay means jobs not created, schools not rebuilt, and communities left vulnerable.
So this is just a summary of some of the ideas we have for our G20 presidency. We want to see action on debt, private sector mobilisation, resilience, and on fragile states. And this is work I will take forward with my colleague and friend, the Chancellor John Healey.
I think it’s important also, though, to acknowledge that we can only shape our ideas with you in this room, with partners across the Global south, and with others, including civil society and others, mobilising for change. I’m not one of those politicians who believes that politics should be left to politicians. Politics is about everybody. It’s about popular movements. It’s about campaigners. It’s about policy advocates. It’s about the whole range of civil society.
Let me then end finally, though, with this thought.
So I said earlier that there was a perfect storm of challenges facing the world, the biggest set of challenges since 1945. But in case we are daunted by the challenges, I think we should think of the spirit of that generation that rebuilt the world anew after 1945.
My parents were part of that generation. They were refugees from the Nazis. They saw the world rebuilt after World War II, the UN, the Bretton Woods institutions, the Universal Declaration of Human Rights. All of those had their flaws, but I make this point because I think I think it’s so important for us to remember as we face these challenges in our generation. That generation faced absolutely enormous challenges, but they didn’t lower their sights; they raised them.
They raised their sights, and they built the world anew, as I said. And I think what’s so important in the era that we live in, and I think our prime minister is a fantastic exemplar of this, is this same spirit of boldness should call us today, in this generation, to build the world anew and to defend our values of solidarity, justice, and equality.
And together, Global South and Global North. We should all take that spirit forward in the work we do in the months and years ahead. And on behalf of the UK Government, I pledge that we will play our part, working with others in that spirit. Thank you so much, everybody.