The U.S. Can Break the International Borrow-and-Bailout Cycle

The 2026 spring meetings of the World Bank and the International Monetary Fund (IMF) take place from April 13-19 in Washington. High on the agenda will be a discussion of how to reduce debt, which has risen to unsustainable levels in many low-income countries. Advocates are again calling for forgiveness to “fix” unsustainable debt burdens. Some, including the United Nations, go further seeking to use the situation to expand international governance.

The United States should, instead, follow the advice of Secretary Scott Bessent and use its influence to press international financial institutions to “get back to basics” by refocusing them on transparency, macroeconomic and financial stability and promoting sound policy reforms needed for a “future that no longer relies on donor assistance.” 

This is not to dismiss debt concerns in many developing countries. According to the Debt Sustainability Analysis of the World Bank Group and the IMF, sixty-nine low-income countries are at some risk of debt distress (i.e., when a country is unable to fulfill its financial obligations). Over half are considered at high risk of debt distress or are currently “in distress.” 

But this is not a new concern. For decades, debt relief efforts have been proposed and adopted to address unsustainable debt in developing countries, including the Heavily Indebted Poor Countries (HIPC) Initiative and related efforts that were supposed to “deal decisively with the debt problems of the low-income countries” and end the need for future debt relief.