The Addis Ababa Action Agenda recognizes the need for action in attaining long-term debt sustainability. Strengthening the monitoring and prudent management of assets and liabilities is an important element of comprehensive national financing strategies and is critical to reducing vulnerabilities. The Addis Agenda emphasizes that debtors and creditors have to work together to prevent unsustainable debt situations.

Many Governments seek to further strengthen their capacity to appropriately manage public debt and ensure borrowing in the interest of maintaining sustainable debt levels. The Monterrey Consensus recognized that technical assistance for external debt management and debt tracking can play an important role and should be strengthened, and the Addis Agenda encouraged continuation of such efforts.

The Monterrey Consensus stated that “debtors and creditors must share the responsibility for preventing and resolving unsustainable debt situations.” Member states emphasized the responsibilities of debtors to maintain sustainable debt levels and the responsibilities of creditors to lend in a manner that would not undermine a country's debt sustainability.

The Addis Agenda specifically:

Different types of innovative debt instruments have been proposed, and some implemented on a small-scale or pilot basis. Their main aim is to either create room for additional investments in the SDGs or better manage shocks and risks.

The Addis Agenda specifically:

• Encourages the study of new financial instruments for developing countries …noting experiences of debt-to-health and debt-to-nature swaps 

Comprehensive debt statistics are crucial for both debt crisis prevention and resolution.

The Addis Agenda specifically:

Since the Monterrey Consensus, Member States of the United Nations have welcomed initiatives to reduce the debt overhangs when countries are under debt distress. Considerable progress was made with respect to low-Income Countries (LICs), especially as regards least developed countries (LDCs), whose main creditors are in the public sector.

The Addis Agenda specifically:

As more developing countries tap international financial markets and more countries draw upon alternative sources for sovereign financing, the number of countries for which a more comprehensive approach to debt crisis workouts is needed may grow, especially in a challenging global environment. The Monterrey Consensus welcomed consideration of an international debt workout mechanism.

While collective action clauses (CACs) aim to reduce the ability of non-cooperating bondholders to undermine an otherwise agreed voluntary restructuring of sovereign debt, the success of ex post litigation has highlighted a gap in the architecture for debt crisis resolution.

Governments have increasingly issued domestic debt in recent years, which reduces exchange rate mismatches and is welcome from a financial market development perspective. However, domestic debt often carries higher interest costs and specific risks. Countries where non-resident investors have a significant presence in the domestic debt market can be vulnerable to capital flight and associated exchange-rate pressures if non-resident investors with short-term investment horizons hold a significant amount of domestic debt and lose confidence in the Government’s solvency or economic policies.