United Nations - A World of Debt, July 2023

This report explores the challenges and opportunities presented by public debt in the developing world. The report highlights that an inequal international financial architecture makes developing countries’ access to financing inadequate and expensive. Debt has been translating into a substantial burden for developing countries due to limited access to financing, rising borrowing costs, currency devaluations and sluggish growth. Countries are facing the impossible choice of servicing their debt or serving their people. Today, 3.3 billion people live in countries that spend more on interest payments than on education or health. The United Nations has a roadmap of multilateral actions to address the global debt burden and achieve sustainable development. The roadmap focuses on three areas of action: tackling the high cost of debt and rising risks of debt distress, massively scaling up affordable long-term financing for development, and expanding contingency financing to countries in need. The implementation of these actions is crucial to unleash the resources needed to build a more prosperous, inclusive, and sustainable world. The report also proposes solutions such as creating a debt workout mechanism to address the slow progress of the G20 Common Framework for Debt Treatment due to creditor coordination challenges and the lack of automatic debt service suspension clauses to participating countries.