Attachments
Introduction
Public debt can be a powerful tool for development, enabling governments to finance critical expenditures and invest in a better future for their people. However, when public debt grows excessively or rapidly, it becomes a heavy burden, particularly for developing countries.
This report highlights the alarming surge in global public debt, driven by cascading crises in recent years. The growing debt burden disproportionately impacts developing countries, as servicing it diverts essential resources away from their development aspirations.
Recent events have worsened this challenge. The rise in global interest rates since 2022 further strained public budgets in developing countries. High interest payments are outpacing the growth in essential public expenditures such as health, education, and climate action. In the developing world, home to 3.3 billion people, one out of every three countries spends more on interest payments than on these critical areas for human development.
The global financial architecture is no longer capable of meeting the needs of the world in the twenty-first century. This is a substantial challenge to sustainable development.
The United Nations has outlined a roadmap to fast-track sustainable development in the SDG Stimulus package, focusing on three key areas:
1 tackling the high cost of debt and rising risks of debt distress,
2 massively scaling up affordable long-term financing for development, and
3 expanding contingency financing for countries in need. Developing countries must not be forced to choose between servicing their debt or serving their people.
The international financial architecture must change to ensure a prosperous future for both people and the planet.
A reform is not only necessary, it is urgent