- The global sovereign debt crisis has surpassed the “high-risk” warning phase and has become a localised problem for about 40% of developing countries as of late 2025.
- Food security is now considered a form of food sovereignty, given the vulnerability of global supply chains revealed by recent geopolitical instability.
- There is a broad consensus among developing countries against the use of climate loans, which risk further exacerbating the debt crisis facing developing nations.
- Developing nations have become increasingly vocal about the need for Multilateral Development Banks (MDBs) to reform their business models to address risk in their operations.
The concept of “Global South 3.0” signifies a marked departure from the ideological alignment of the Cold War (1.0) and the deepened integration of developing countries into the global economy that followed the end of the Cold War (2.0). By 2025, the discussion concerning the developing world will have changed dramatically. Merely critiquing the imbalances of the Bretton Woods institutions is no longer sufficient. Instead, the leadership of the developing world, including an expanded BRICS+ and the two consecutive G20 presidencies held by Global South nations, is shifting its focus toward constructing alternative institutions and implementing meaningful reforms in the areas of debt, food, and climate change.
The Debt Trap: Moving Toward Systemic Workout Mechanisms
The global sovereign debt crisis has surpassed the “high-risk” warning phase and has become a localised problem for about 40% of developing countries as of late 2025. The traditional long-term response (i.e., negotiating debt relief) through the G20 Common Framework has proven insufficiently responsive to the rapid volatility of modern capital markets.
Global South 3.0 leadership now demands a transition from “case-by-case” debt relief toward a permanent, multilateral mechanism for managing sovereign debt workouts (permanent mechanism). A part of this transition will require moving beyond rhetoric about climate-related risks to the development of concrete innovations, such as “state-contingent debt instruments,” which automatically halt debt service in the event of a pandemic or climate-related disaster.
Modern Development Leadership is debating the “quality” and types of “Debt,” as opposed to just the amounts of debt (“quantity”). Many developing countries have been vocal about what they term “Poverty of Finance,” a condition in which negative net resource transfers occur (i.e., funds flowing from the poor to the rich as interest rather than flowing back into new investment) To address the “Poverty of Finance,” modern development leadership has called for a significant modification of the method used for determining credit ratings. Modern leadership asserts that these methodologies place undue weight in the form of elevated risk premiums on developing countries’ debts that are not representative of the economic fundamentals of such countries. The vision of Modern Development Leadership is to establish an equitable, UN-led assessment of debt sustainability, which does not view it as financial assistance, but rather recognises it as a key component of maintaining global financial stability.
Food Security: From Emergency Aid to Sovereign Systems
Food security is now considered a form of food sovereignty, given the vulnerability of global supply chains revealed by recent geopolitical instability. Countries are looking to the future, moving away from dependence on established global sources of food production, toward strengthening local food production through cooperation with regional partners under the South-South model. For example, India’s digital agricultural “stack” for Precision Farming, along with Brazil’s advances in tropical agriculture, are now key areas of collaboration being led by the Global South to establish food production capability within the regional ecosystem. This shift is driven by action-oriented Leadership focused on a vision of the “Triple A” of Food – availability, accessibility and affordability.
The Global Alliance Against Hunger and Poverty is one of the most important initiatives today, aimed at institutionalising the lessons learned from successful domestic social protection programs across national boundaries. Rather than remaining dependent upon the Northern-created aid programmes, the Global South countries have banded together to create regional grain reserves and invest in the development of decentralised production of fertilisers. In addition to establishing food production capacity for regional use, the action of these leaders is to address the dual challenges of environmental sustainability and nutritional security at the global level through advocacy for the inclusion of climate-resilient crops such as millets and pulses in the global diet. Instead of being based on a vision of “feeding the world”, these leaders are operating with the vision of “empowering the farmer.”
Climate Finance: Closing the “Access Gap” and Reforming the MDBs
Climate finance represents a critical and contentious area for Global South 3.0. As the world moves from the $100 billion per year goal established at COP15 toward a new Unified Quantified Goal, known as the New Collective Quantified Goal (NCQG), the call for trillions rather than billions has arisen from developing countries. At present, emphasis is on how this finance will take shape. There is a broad consensus among developing countries against the use of climate loans, which risk further exacerbating the debt crisis facing developing nations, and in favour of grants and highly concessional forms of financing. Additionally, the 2025 climate finance roadmap emphasises the movement from Baku to Belém as part of the continued expansion of the Loss and Damage Fund, by transitioning from pilot financing to full capitalisation.
Developing nations have become increasingly vocal about the need for Multilateral Development Banks (MDBs) to reform their business model to better address risk in their operations. Leaders are calling on MDBs to help create a financial environment that systematically incorporates climate resilience into all loan products, while championing the Bridgetown Initiative 2.0 as a global financial framework. If the Global North does not supply the resources needed to finance these changes, the Global South is committed to pressing for the unlocking of capital through institutional leverage, to demand that “green” development becomes the norm, rather than the exception.
Hridbina Chatterjee is a final-year postgraduate student in International Relations at Jadavpur University, Kolkata. She has written for newspapers and think tanks, with interests in South Asian politics, India’s foreign policy, and the Indo-Pacific. Views expressed are the author’s own.
Dr Lakshmi Karlekar 
SamvadaWorld Staff 
Pritam Sarbabidya