June 4, United Nations Headquarters – Global public debt surged to an unprecedented $97 trillion in 2023, with developing countries shouldering approximately one-third of this burden, according to a United Nations report released on Tuesday. This significant debt increase hampers their ability to fund essential services such as healthcare, education, and climate action.
The United Nations Conference on Trade and Development (UNCTAD) revealed in its report, “A World of Debt,” that global public debt grew by $5.6 trillion from 2022. The report highlighted the severe impact of high-interest payments, which are outpacing growth in crucial public spending.
“Developing countries must not be forced to choose between servicing their debt or serving their people,” the report stated. “The international financial architecture must change to ensure a prosperous future for both people and the planet.”
Burden on Developing Nations
In developing nations, which are home to 3.3 billion people, one in three countries spends more on interest payments than on critical human development programs such as healthcare, education, and climate action. In 2023, public debt in these countries reached $29 trillion, representing about 30% of the global total, a significant increase from 16% in 2010.
UNCTAD pointed to “cascading crises” and the uneven performance of the global economy as key factors behind the rapid rise in global public debt. This debt is growing at twice the rate in developing countries compared to richer nations.
Leading Nations in Debt
The United States topped the global debt list with over $33 trillion, followed by China with nearly $15 trillion, and Japan with $10.6 trillion. Among developing nations, Egypt, Mexico, Brazil, and India have substantial public debt, with China leading this group.
Africa’s Debt Challenge
African economies have been particularly hard hit, with median public debt as a share of economic output rising to 62% last year. The rising cost of borrowing pushed interest on public debt to $847 billion in 2023, a 26% increase from two years earlier.
Calls for Global Action
Last month, U.S. President Joe Biden and Kenyan President William Ruto emphasized the need for global efforts to alleviate the crushing debt burden on developing nations. They advocated for reducing financing barriers and coordinating debt relief through multilateral financial institutions.
The U.S. Congress passed a $1.2 trillion government funding bill in March, allowing the U.S. to lend up to $21 billion to an International Monetary Fund (IMF) trust that offers zero-interest loans to support low-income countries.
“Too many nations are forced to make a choice between development and debt, between investing in their people and paying back their creditors,” Biden remarked.
G20’s Role in Addressing Debt
The African Union, now a permanent member of the G20, has been vocal on debt relief issues. South Africa, set to assume the G20 presidency in December, sees this as an opportunity to advocate for the aspirations of emerging markets.
The UN’s report underscores the urgent need for systemic changes in the global financial architecture to support sustainable development and alleviate the debt burden on developing countries.
