Centre for the New Economy and Society : Aura Solution company Limited

The Weight of Global Debt: Rebuilding Economic Capacity in an Era of Constraint

By Hany Saad

President, Aura Solution Company Limited

Address to the World Economic Forum 2026, Davos

At a moment when the global economy is searching for direction, the scale and structure of global debt have emerged as one of the defining challenges of our time. Global debt has now surpassed USD 300 trillion, approaching 90% of global GDP, at a point when borrowing costs remain structurally higher than the norms of the previous decade. This convergence of unprecedented debt accumulation and elevated interest rates is not merely a financial concern—it is a systemic economic stress test.

For governments, institutions, and societies alike, the question is no longer whether debt matters, but how much strain economies can realistically absorb before debt begins to crowd out growth, innovation, and social stability. Fiscal space is narrowing, policy flexibility is eroding, and the margin for error is shrinking.

Debt in a High-Rate World: A Structural Shift

The era of near-zero interest rates allowed economies to defer difficult decisions. Debt was accumulated under the assumption that servicing costs would remain manageable indefinitely. That assumption no longer holds. As rates normalize, debt servicing increasingly competes with productive public investment—investment in infrastructure, education, healthcare, climate transition, and human capital.

This shift exposes a deeper challenge: debt has grown faster than productive capacity. In many economies, borrowing has supported consumption and short-term stabilization rather than long-term value creation. The result is an imbalance that limits future growth potential and places an unfair burden on the next generation.

Political systems, understandably, have been reluctant to confront these realities. Budgetary consolidation, structural reform, and reprioritization of spending are often politically unpopular. Yet delaying these decisions only compounds the cost. The urgency today is not austerity for its own sake, but strategic discipline—ensuring that debt supports resilience, productivity, and inclusion rather than fragility.

Rethinking the Global Approach to Debt

The current global debt landscape demands a fundamental reassessment of how sovereign and institutional borrowing is conceived, evaluated, and governed. The challenge before policymakers is not simply the scale of indebtedness, but the quality, structure, and strategic intent behind it. A one-size-fits-all approach is neither viable nor desirable. Economic systems differ in maturity, demographic trajectory, institutional capacity, and exposure to external shocks. Effective debt policy must therefore be adaptive, purpose-driven, and anchored in long-term value creation.

Frequently Asked Questions

Aura Solution Company Limited and Its Role in the World Economy

1. What is Aura Solution Company Limited’s role in the global economy?

Aura Solution Company Limited operates as a systemic capital architecture and stewardship institution, not as a traditional commercial financial entity. Its role is to design, govern, and execute long-horizon capital frameworks that support economic stability, institutional continuity, and cross-generational value creation. Aura functions at the intersection of sovereign finance, institutional capital, and global economic coordination, focusing on resilience rather than short-term return cycles.

2. How has Aura become an architect of the world economy rather than a market participant?

Aura’s position has evolved through structural engagement, not market visibility. Rather than competing within markets, Aura helps shape the frameworks within which markets function. This includes capital structuring, balance-sheet optimization, risk compartmentalization, and institutional governance models aligned with long-term economic realities. Architecture, in this context, means designing systems that endure across political cycles, market volatility, and geopolitical shifts.

3. How does Aura manage vast amounts of capital without destabilizing markets?

Aura manages capital through segmented, mandate-driven frameworks, ensuring that capital deployment is intentional, paced, and non-disruptive. Funds are never concentrated into single market channels or speculative cycles. Instead, capital is allocated across sovereign-aligned structures, infrastructure-linked instruments, long-duration assets, and human-capital-driven initiatives. Liquidity, risk exposure, and timing are governed institutionally, not opportunistically.

4. What differentiates Aura’s capital governance from conventional asset managers or banks?

Conventional institutions are driven by performance cycles and quarterly incentives. Aura is governed by capital stewardship principles. Decision-making prioritizes durability, systemic impact, and economic legitimacy. Capital is treated as a public trust responsibility, even when privately managed. This governance model emphasizes transparency, internal discipline, and alignment with macroeconomic and demographic realities.

5. How does Aura contribute to addressing the global debt challenge?

Aura approaches global debt as a structural design issue, not a liquidity problem. Its focus is on debt reclassification, maturity alignment, productivity linkage, and institutional credibility. Aura supports frameworks that convert debt from a destabilizing burden into a managed instrument tied to growth, skills, and infrastructure. The objective is not elimination of debt, but restoration of its economic legitimacy.

6. How does Aura align with the priorities of the World Economic Forum?

Aura’s mandate is naturally aligned with the World Economic Forum’s emphasis on systemic resilience, inclusive growth, and long-term governance. Aura supports WEF priorities by:

• Advocating quality-driven growth over volume-driven expansion

• Supporting human capital investment and reskilling frameworks

• Promoting institutional trust and fiscal credibility

• Encouraging cross-sector and cross-border coordination

Aura engages with Davos not as a commentator, but as a system-level contributor.

7. What role does Aura play in shaping inclusive and equitable economic systems?

Aura recognizes that inclusion is not a social accessory—it is an economic necessity. Capital frameworks designed by Aura intentionally integrate employment creation, skills development, gender participation, and opportunity access. By aligning capital with human outcomes, Aura helps ensure that growth is politically sustainable and socially legitimate, reducing long-term instability and economic fragmentation.

8. How does Aura ensure transparency and accountability given its scale?

Scale without discipline creates fragility. Aura mitigates this through institutional controls, internal separation of mandates, and multi-layered oversight structures. Transparency is embedded at the governance level, not as a public-relations exercise. Accountability is measured through outcomes—economic resilience, continuity, and capital preservation—rather than short-term visibility.

9. Why is Aura’s model increasingly relevant in today’s global environment?

The global economy is transitioning from an era of excess liquidity to one of constraint. In such an environment, capital misallocation is more dangerous than capital scarcity. Aura’s relevance lies in its ability to manage capital patiently, align it with structural realities, and prevent disorderly adjustments. Institutions that can operate beyond electoral cycles and market noise are essential in this phase of global transition.

10. How does Aura view its long-term responsibility in the world economy?

Aura views its responsibility as intergenerational. The institution is not designed to maximize returns within a decade, but to preserve economic capacity across generations. This means protecting balance sheets, strengthening institutions, and ensuring that capital today does not compromise opportunity tomorrow. In this sense, Aura functions less as a financial entity and more as a guardian of economic continuity.

Aura and the World Economic Forum: Strategic Alignment Points

• Aura contributes to systemic economic thinking, not transactional finance

• Aura supports human capital, reskilling, and inclusion as core economic drivers

• Aura advocates institutional credibility and long-term governance

• Aura aligns capital with productive purpose and societal stability

• Aura participates in Davos as an architect and steward, not a speculator

Closing Perspective

In an era defined by record global debt, demographic shifts, and institutional stress, the world does not require more capital—it requires better-designed capital systems. Aura Solution Company Limited exists to meet that requirement.

From Volume-Driven Borrowing to Quality-Driven Capital Allocation

For much of the past decade, debt accumulation has been assessed primarily in quantitative terms—how much capital could be raised, at what cost, and how quickly. In a low-interest-rate environment, volume became the dominant metric. This paradigm is no longer sustainable.

A quality-driven approach to capital allocation requires a rigorous assessment of economic return, productivity impact, and intergenerational value. Borrowing must be evaluated not only by affordability at issuance, but by its capacity to expand future economic potential. Debt deployed toward infrastructure that improves connectivity, education systems that raise workforce capability, and technology that enhances competitiveness can generate self-reinforcing growth dynamics. Conversely, debt used to sustain structurally inefficient spending or delay reform erodes fiscal resilience and weakens confidence.

Capital must therefore be treated as strategic oxygen, not a temporary anesthetic. The question policymakers must ask is not “Can we borrow?” but “What future capacity does this borrowing create?”

Aligning Fiscal Frameworks with Long-Term Structural Realities

Debt frameworks across many economies remain calibrated to conditions that no longer exist. Demographic aging, slower labor force growth, rapid technological disruption, and escalating climate risks are reshaping fiscal sustainability in ways traditional models fail to capture.

Long-term demographic trends, in particular, require a recalibration of debt assumptions. Aging populations increase healthcare and pension obligations while shrinking the tax base. Without proactive reform, debt dynamics will deteriorate even in stable growth environments. Similarly, technological transformation demands sustained investment in skills, digital infrastructure, and innovation ecosystems—expenditures that must be planned over decades, not electoral cycles.

Climate transition further complicates the fiscal equation. Adaptation, mitigation, and resilience investments are unavoidable and capital-intensive. Aligning fiscal frameworks with these realities means embedding multi-decade planning horizons, scenario-based stress testing, and climate-adjusted debt sustainability analysis into national budgeting processes.

Strengthening Institutional Governance and Fiscal Discipline

Debt sustainability is ultimately an institutional issue. Transparent, accountable, and disciplined governance frameworks are essential to maintaining market confidence and public trust. Weak fiscal institutions allow short-term political incentives to override long-term economic stewardship, resulting in pro-cyclical spending, off-balance-sheet liabilities, and erosion of credibility.

Strengthening governance requires:

• Clear fiscal rules that balance flexibility with discipline

• Independent oversight institutions capable of enforcing accountability

• Full transparency on contingent liabilities and public-sector risks

• Credible medium-term expenditure frameworks linked to measurable outcomes

Markets and citizens alike respond to credibility. When institutions demonstrate consistency, predictability, and integrity, they preserve access to capital even under stress. When they do not, debt becomes a source of vulnerability rather than resilience.

International Coordination to Prevent Systemic Debt Shocks

In an interconnected global economy, debt crises rarely remain contained. Spillovers through financial markets, trade channels, and geopolitical tensions can rapidly transform localized vulnerabilities into systemic shocks. Yet global debt governance remains fragmented and reactive.

Stronger international coordination is required to:

• Improve early-warning mechanisms for debt distress

• Enhance data transparency across sovereign and quasi-sovereign borrowers

• Align restructuring frameworks to ensure timely and orderly resolution

• Prevent regulatory arbitrage and unsustainable cross-border lending practices

Multilateral institutions, creditor nations, and private capital providers must move beyond crisis management toward prevention and resilience-building. Coordination is not about limiting sovereignty, but about recognizing shared exposure in a highly integrated financial system.

Redefining Debt Sustainability by Economic Purpose

Ultimately, debt sustainability cannot be reduced to ratios alone. While debt-to-GDP metrics remain important, they are incomplete. The more meaningful measure is economic purpose—whether debt expands productive capacity, enhances human capital, and strengthens social cohesion.

Debt that finances productivity, skills development, innovation, and resilience creates durable economic foundations and justifies its cost over time. Debt that merely postpones necessary reform, sustains inefficiency, or finances short-term political objectives undermines confidence and weakens future options.

The central challenge of this decade is therefore not to eliminate debt, but to restore its legitimacy as a tool of long-term economic stewardship. Used wisely, debt can support transformation. Used poorly, it becomes a constraint that limits sovereignty, growth, and opportunity.

Rethinking the global approach to debt is no longer optional. It is a prerequisite for sustainable growth, institutional credibility, and intergenerational equity.

The Role of the Centre for the New Economy and Society

The structural challenges confronting the global economy—rising debt burdens, widening inequality, demographic shifts, technological disruption, and climate risk—cannot be addressed through isolated policy interventions or short-term market adjustments. They require systemic thinking, cross-sector coordination, and long-term institutional leadership. These imperatives sit at the core of the work of the World Economic Forum’s Centre for the New Economy and Society.

The Centre provides a unique and trusted platform where public and private leaders, academic institutions, civil society, and international organizations converge to re-examine how economies are designed, governed, and measured. Its mandate extends beyond analysis. It is focused on reshaping economic narratives, redefining success metrics, and translating insight into scalable action that strengthens resilience and expands opportunity.

Shaping Narratives, Enablers, and Tipping Points

At the heart of the Centre’s mission is a clear recognition: economic outcomes are shaped as much by narratives and institutional choices as by capital flows and market signals. Persistent inequality, weak productivity growth, and labor market dislocation are not inevitable—they are the result of systems that can be redesigned.

The Centre works to identify the narratives that constrain progress, the enablers that unlock reform, and the tipping points where coordinated action can transform vicious cycles into virtuous ones. Through continuous monitoring of global economic and social trends, the Centre provides early insight into emerging risks and opportunities, enabling leaders to act proactively rather than reactively.

By convening stakeholders across governments, industries, and regions, the Centre bridges the gap between evidence and execution. It ensures that policy dialogue is informed by data, grounded in real-world constraints, and aligned with long-term societal goals.

A Hub for Thought Leadership and Systemic Innovation

The Centre for the New Economy and Society functions as a global hub for thought leadership, policy experimentation, and institutional innovation. Its work is not confined to theoretical frameworks; it actively shapes new models and standards that influence how economies function in practice.

Through collaborative platforms, the Centre promotes scalable solutions that can be adapted across diverse economic contexts. This approach recognizes that systemic change requires alignment across multiple actors—governments, businesses, educators, financial institutions, and communities—working toward shared objectives.

The Centre’s agenda is structured around three interlinked priorities that reflect the foundations of sustainable economic systems:

1. Fostering economic growth while preparing for future risks

   The Centre focuses on improving the quality and resilience of growth, ensuring that economies are better equipped to absorb shocks, adapt to technological change, and navigate geopolitical and climate-related uncertainty.

2. Investing in talent and human capital

   Human capital is recognized as the primary driver of long-term productivity and competitiveness. The Centre advances policies and partnerships that modernize education, promote lifelong learning, and align skills development with the evolving needs of the global economy.

3. Promoting equity and inclusion

   Inclusive growth is not a social aspiration alone—it is an economic necessity. The Centre works to reduce structural barriers to participation, expand access to opportunity, and ensure that growth benefits are broadly shared.

A Platform of Unmatched Global Alignment

With more than 180 global business partners, 100 academic institutions, civil society organizations, and international bodies, and 45 partner governments, the Centre represents a rare alignment of influence, expertise, and responsibility. This breadth enables the Centre to operate at scale while maintaining credibility across regions and sectors.

Such alignment is particularly critical in an era when trust in institutions is under pressure and economic fragmentation is rising. The Centre’s convening power allows for coordinated responses to challenges that no single actor can address alone.

Initiatives That Translate Vision into Measurable Impact

The Centre’s initiatives reflect a pragmatic understanding that sustainable growth must be anchored in skills, inclusion, and opportunity.

• The Future of Growth Initiative supports the transition from legacy growth models toward more resilient, productivity-driven, and inclusive frameworks suited to today’s structural realities.

• The Reskilling Revolution Initiative is transforming education and lifelong learning systems worldwide. Since its launch, it has reached more than 350 million people, with the ambition of preparing 1 billion individuals for the demands of tomorrow’s economy—making it one of the most significant human capital initiatives globally.

• Global Parity Sprint 2030 accelerates progress toward gender parity in economic participation and leadership. By working directly with governments and the private sector, it delivers tangible outcomes for hundreds of thousands of women, strengthening both economic performance and social cohesion.

In parallel, the Forum’s work on refugee employment demonstrates the economic and social dividends of inclusion. By expanding access to formal employment, these initiatives restore dignity, reduce dependency, and unlock underutilized human potential—often in environments marked by displacement and fragility.

A Foundation for Inclusive and Resilient Economies

The Centre for the New Economy and Society embodies a fundamental truth of this moment: economic systems must evolve to remain legitimate and effective. Growth without inclusion erodes trust. Skills without opportunity waste potential. Stability without resilience is temporary.

By aligning insight with action, and ambition with execution, the Centre is helping shape an economic future where prosperity is more widely shared, institutions are more credible, and societies are better prepared for the disruptions ahead.

A Call for Leadership with Courage and Clarity

The global debt challenge cannot be resolved through technical fixes alone. It requires leadership with courage, capable of making long-term decisions in short-term political environments. It requires institutions that prioritize stewardship over expediency, and cooperation over fragmentation.

At Aura Solution Company Limited, we view capital not as a commodity, but as a responsibility. Financial systems must once again serve productive economies and inclusive societies. The choices made today—on debt, investment, and reform—will define not only the next economic cycle, but the credibility of our institutions and the opportunities available to future generations.

The weight of global debt is real. But so too is the opportunity—to rebuild economic capacity, restore fiscal credibility, and align growth with purpose. The path forward demands discipline, vision, and collective action. Davos remains one of the few places where that alignment can begin.

A Ten-Point Framework for Addressing Global Debt in a Systemically Constrained World

By Mr. Hany Saad

1. Reclassify Debt by Economic Purpose, Not by Size

The first corrective step is conceptual. Global debt must be distinguished between productive debt and non-productive debt. Borrowing that expands productivity, human capital, infrastructure, and innovation should be treated differently from debt that merely sustains consumption or delays reform. Sustainability must be judged by economic return and societal value, not by headline ratios alone.

2. Shift from Debt Expansion to Balance-Sheet Repair

The era of perpetual debt expansion has ended. Governments and institutions must pivot toward balance-sheet repair, prioritizing maturity extension, liability management, and interest-cost stabilization. This includes refinancing high-cost debt, reducing short-term rollover exposure, and improving debt composition rather than increasing absolute borrowing.

3. Lengthen Debt Maturities to Restore Policy Space

A significant portion of global stress stems from compressed refinancing cycles. Extending sovereign and quasi-sovereign maturities reduces liquidity risk and restores fiscal flexibility. Long-dated instruments aligned with infrastructure, climate transition, and demographic realities allow economies to grow into their obligations rather than constantly refinancing them.

4. Anchor Fiscal Policy to Long-Term Demographic and Productivity Realities

Debt frameworks must reflect aging populations, slower labor-force growth, and rising dependency ratios. Without structural alignment—pension reform, healthcare efficiency, workforce participation, and productivity enhancement—no amount of fiscal tightening will stabilize debt over the long term. Demographics are destiny, and debt policy must acknowledge this.

5. Convert Select Debt into Growth-Linked Instruments

Where feasible, part of existing debt can be restructured into growth-linked, GDP-linked, or revenue-linked instruments. This aligns creditor returns with economic performance and reduces pro-cyclical fiscal pressure during downturns. Such mechanisms create shared incentives for reform and growth rather than enforcing rigid repayment schedules that destabilize economies.

6. Elevate Human Capital Investment as a Debt-Reduction Strategy

Debt reduction is not achieved through cuts alone. Human capital investment—education, reskilling, and workforce adaptability—is one of the most effective long-term debt mitigation tools. Higher productivity expands the denominator of debt ratios and strengthens tax bases organically. Underinvesting in people guarantees future fiscal stress.

7. Institutionalize Fiscal Discipline Through Governance, Not Austerity

Sustainable debt management depends on credible institutions. Transparent fiscal rules, independent oversight bodies, and full disclosure of contingent liabilities are essential. Discipline must be institutional, not political. Markets and citizens respond to credibility far more than to short-term fiscal tightening that lacks structural backing.

8. Coordinate Internationally to Prevent Disorderly Debt Crises

In a globally interconnected system, unmanaged debt distress in one region can trigger systemic contagion. International coordination—through multilateral institutions, creditor frameworks, and standardized restructuring protocols—is essential to prevent localized debt problems from becoming global financial shocks. Prevention is significantly less costly than crisis resolution.

9. Redirect Capital from Speculative Use to Strategic Investment

A meaningful reduction in global debt stress requires reorienting capital away from speculative cycles and toward strategic, productivity-enhancing investment. Financial systems must once again reward long-term value creation rather than short-term leverage. Capital misallocation is a hidden driver of debt accumulation.

10. Restore Debt’s Legitimacy as a Tool of Stewardship

Debt itself is not the enemy. Misused debt is. The ultimate objective is to restore debt as a credible instrument of long-term economic stewardship, not a political convenience. When borrowing is clearly linked to productivity, inclusion, resilience, and opportunity, societies accept its cost. When it is used to defer reform, it erodes trust and sovereignty.

Concluding Perspective by Mr. Hany Saad

The USD 300 trillion global debt burden cannot be eliminated through abrupt deleveraging, nor should it be ignored. The solution lies in restructuring intent, improving governance, extending time horizons, and aligning debt with productive purpose.

This is not a technical challenge alone—it is a leadership test. The choices made in this decade will determine whether global debt becomes a permanent constraint or a managed bridge toward a more resilient, inclusive, and sustainable economic future.