Debt service payments by developing countries soared by $74 billion in 2024 from 847 billion dollars to 921 billion dollars, a new UN report has shown.
The report, “Confronting the Debt Crisis: 11 Actions to Unlock Sustainable Financing,’’ was launched on Friday by UN Deputy Secretary-General Amina Mohammed.
Ms Mohammed was joined by experts Mahmoud Mohieldin and Paolo Gentiloni, along with Rebeca Grynspan, Head of the UN Conference on Trade and Development (UNCTAD).
The report showed a “silent crisis” of surging debt service payments in low-income countries and charted the path out of the debt crisis threatening global development.
Ms Mohammed regretted that a decade after the adoption of the Sustainable Development Goals (SDGs), development was facing serious headwinds.
“Borrowing is critical for development,” Ms Mohammed said, adding today, “borrowing is not working for many developing countries. Over two-thirds of our low-income countries are either in debt distress or at a high risk of it.”
Grynspan warned that the crisis was accelerating.
The report showed more than 3.4 billion people now live in countries that spend more on interest payments than on health or education, 100 million more than previous year.
“The nature of this crisis is mostly connected to the increase of debt servicing costs,” Gentiloni explained.
“Practically, the debt services costs doubled in the last 10 years.”
Prepared by the UN Secretary-General’s Expert Group on Debt, the report reinforced the commitments put forward in the Compromiso de Sevilla.
Compromiso de Sevilla is the outcome document of the Fourth International Conference on Financing for Development – taking place next week.
The report outlines 11 actions that are both technically feasible and politically viable.
Mohieldin explained that the recommendations fall under two key goals: providing meaningful debt relief and preventing future crises.
It identified three levels of action including repurpose and replenish funds to inject liquidity into the system, with targeted support for low-income countries at the multilateral level.
The other is establishing a platform for borrowers and creditors to engage directly at the international level:
At the national level, the report recommended strengthening institutional capacity, improving policy coordination, managing interest rates and bolstering risk management.
“These are 11 proposals that are doable and that only need the political will of all the actors to be able to make them real,” Ms Grynspan stressed.
(NAN)