The World Bank Headquarters in Washington D.C. Credit: Unsplash/Zoshua Colah
By Maximilian Malawista
NEW YORK, Jul 17 2025 – Today, 3.4 billion people live in countries that spend more on debt interest payments than on health or education. This marks a trembling indication that the United Nations’ promise for the 2030 Agenda could be slipping away.
With less than five years left, developing countries are facing an estimated USD 4 trillion in annual financing gaps, placing sustainable development efforts on the back-burner.
The financing gaps across regions, as shown below, reflect the disparity
Asia and Oceania
- · 2.139 billion people (Interest > Education)
· 2.24 billion people (Interest > Health)
Africa
- · 402 million people (Interest > Education)
· 791 million people (Interest > Health)
Latin America and the Caribbean
- · 140 million people (Interest > Education)
· 356 million people (Interest > Health)
The Aggregate
- · 3.4 billion people (Interest > Education)
· 2.4 billion people (Interest > Health)
Education has been found to be the most effective long-term solution to lifting people out of poverty. Now with almost half the world in regions where debt interest payments are being prioritized over education, it reveals a daunting future; one which could halt progress in SDG 4 (Quality education), and create hurdles for SDG 1 (No Poverty).
The Sevilla Platform for Action
At the 4th International Conference on Financing for Development (FfD4) the Sevilla Platform for Action was launched, putting forward 130 “high-impact” initiatives aimed at implementation of reconstructive and expansionary policy from the start.
The platforms look at implementing three key areas of solution:
1. Catalyze Investments at Scale – bridging SDG financing gaps, involving the mobilization of tax revenues, blended finance initiatives, among guarantees and local currency lending by multilateral development banks, and overall increasing financing for crisis response.
2. Debt Reform Initiatives – A global hub for debt swaps in exchange for development, a debt pauses clause alliance, and a borrowers’ forum.
3. Structural Reform to Global Financial Architecture – Architecture reforms at national and global levels, involving a coalition of countries and institutions aimed at country led and owned platforms, a second coalition for including measures of vulnerability beyond GDP in all financing operations, and efforts to update development cooperation on a global scale.
UNCTAD Secretary-General Rebecca Grynspan stressed the need for an integrated approach “We need to think about development in an integrated way where trade, investment, finance and technology reinforce each other as the Sevilla Commitment states,” said Grynspan.
According to UNCTAD, trade remains “the strongest link between local economies and global growth”. To establish these networks, this involves advocating for predictable trade rules, and transparent policies to help construct a capacity, competitiveness, and resilience among developing nations economies.
Another proposal by the platform is “turning public debt from a burden into a tool of development,” calling for lowering borrowing costs and fairer mechanisms, ultimately exceeding the limits set by the G20 Common Framework for Debt Treatment. This would include a tripling of lending capacity, increasing the borrowing limit from USD 50 billion to USD 150 billion.
The global debt trap
In the last decade, developing countries have borrowed more and at higher interest rates then that of the developed world, leading to the rise of debt burden and the shrinking of essential public services. Since 2010, in developing countries debt has grown twice as fast as that of advanced economies. Today, that debt has grown to USD 102 trillion, an increase of USD 5 trillion from the past year.
Just in 2024 alone, 61 countries allocated more than 10 percent of their government revenues on interest payments, amounting to USD 921 billion. Developing countries now owe USD 31 trillion collectively, resources which could have been distributed toward public goods like education and healthcare.
To put this to scale, many of these developing countries have been borrowing at average rates two to four times higher than the United States despite having far fewer resources to repay that debt. These debt burdens are creating crushing opportunity costs, stunting the lives of some of the world’s most vulnerable populations.
Debt can be a powerful tool for investment and development when used properly. But now, rising interest payments are actively crowding out future investment, creating cycles for delay and dependency through debt traps. This has cost developing nations USD 25 billion in net interest to their creditors, leading to massive net negative financial flows now for several years in a row. These countries are paying more to borrow the money than what they receive, making sustainable development nearly impossible, and ultimately forcing some of these economies into survival mode.
UN Secretary-General António Guterres described the current debt system as: “Unsustainable, unfair and unaffordable, with many governments spending more on debt payments than on essentials like health and education combined.” Guterres called for the intervention of a new global debt system, one which offers long term and affordable financing, to reverse the damage done by the current global debt trap.
IPS UN Bureau Report
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