NEW YORK - The global financial system must be rebuilt on the principles of equality, solidarity, and human dignity that underpin the United Nations Charter, a UN expert told the General Assembly.
The Independent Expert on the promotion of a democratic and equitable international order, George Katrougalos, presented his report to Member States, calling for bold and comprehensive reforms to create a fairer and more inclusive financial architecture.
The expert underlined that the current system continues to reflect the disproportionate influence of the global North. Katrougalos said that the report is not about assigning blame but about promoting reforms for fairer and more inclusive global financial governance, through open and forward-looking dialogue.
"Although international financial institutions claim neutrality, their policies prioritise market liberalisation, deregulation, and fiscal discipline over social equity," he noted.
"They directly affect how much a country can invest in education, health, and social protection, and how it can respond to crises while maintaining its dignity and independence," the expert said, warning that austerity and structural adjustment policies have often weakened labour protections, curtailed access to public services, and eroded democratic participation.
The expert underscored that economic policy cannot be treated as neutral or detached from human rights obligations. Financial institutions, as specialised intergovernmental organisations, are bound by the UN Charter and international law, including universal human rights treaties. Yet, despite frequent references to human rights, climate action, or social inclusion in policy statements, these commitments rarely result in binding measures or transparent accountability.
He noted that, in 2023, developing countries transferred an estimated US$ 263 billion to the wealthiest 1 percent in the global North, while many low- and middle-income countries devoted nearly half of their national budgets to servicing external debt.
The report calls for a realignment of the Bretton Woods institutions around democratised governance, stronger accountability, and the integration of human rights into all aspects of financial decision-making. It urges the General Assembly to seek an International Court of Justice advisory opinion on the legal obligations of the International Monetary Fund and the World Bank to respect fundamental human rights.
Katrougalos said reform is both urgent and possible.
"A democratic and equitable international order is not merely an aspiration but an obligation," he said. "Only by placing people before profit and dignity before debt can we build a fairer, more sustainable global economy."
