UN Secretary-General António Guterres announced that the debt crisis in developing countries threatens a development catastrophe, as governments are spending more on debt repayment than on health and education. During the presentation of an international report on the state of global debt, Guterres pointed out that "half the world is sinking into a developmental catastrophe fueled by a crushing debt crisis," noting that "around 3.3 billion people, nearly half of humanity, live in countries that spend more on debt service than on education or health."
He stated, "Since the majority of these unsustainable debts are concentrated in poor countries, they are not seen as a systemic risk to the global financial system." According to the report titled "A World of Debt," global public debt reached a staggering $92 trillion in 2022, a record level that is five times what it was in 2000. Developing countries account for about 30 percent of the total debt, and their debts are growing faster than others. Despite their debt-to-GDP ratio being lower, they incur higher debt service costs, partly due to paying higher interest rates.
The report indicated that 52 countries, or 40 percent of developing countries, are facing a "serious debt problem." Guterres viewed the level of public debt in developing countries as a systemic failure resulting from inequality in "our outdated financial system," warning that public debt has shifted from an important financial tool "into a trap that creates more debt."
Rebecca Greenspan, head of the United Nations Conference on Trade and Development, noted that the composition of debts in developing countries has changed over the years. She explained that private sector creditors now hold 62 percent of the external debt of developing countries in 2021, compared to only 47 percent in 2010.
