Addressing Unsustainable Sovereign Debt through Parallel System (s) of Transnational Finance

Unsustainable debt plagues developing and several developed countries. Many developed countries are resource-rich, yet they accept conditions and mechanisms imposed by lenders and international financial institutions that make no financial sense, which in turn violates entrenched human rights. This article suggests that indebted countries, particularly at a regional level, should coalesce and use their existing resources to create one or more parallel transnational finance mechanisms that would allow them to develop on the basis of a sustainable debt burden. Despite some backlash from the World Bank Group and other international financial institutions (IFIs), parallel systems of regional finance will enhance the target states’ capacity to maximize and mobilize their domestic resources and, in so doing, create meaningful employment, capacitybuilding, and technology transfer while also financing other regional projects in countries with smaller mobilization capacity.