UN unveils 11-point action plan as debt service costs cripple low-income nations
AMN / UN NEWS
A decade after world leaders embraced the Sustainable Development Goals (SDGs), the global development agenda is under mounting pressure—facing what the United Nations describes as a “silent crisis” driven by a surge in debt servicing costs in low-income countries.
On Friday, UN Deputy Secretary-General Amina Mohammed launched a pivotal report titled “Confronting the Debt Crisis: 11 Actions to Unlock Sustainable Financing”. The report was released in collaboration with senior experts including Mahmoud Mohieldin, Paolo Gentiloni, and Rebeca Grynspan, Secretary-General of the UN Conference on Trade and Development (UNCTAD).
Debt Burden Deepens for Developing Nations
“Borrowing is essential for development,” Ms. Mohammed noted, “but today it’s simply not working for most developing countries.”
She highlighted that over two-thirds of low-income countries are now either in debt distress or at high risk of it.
Ms. Grynspan underscored the gravity of the situation, stating that the crisis is accelerating. Over 3.4 billion people now reside in countries that spend more on interest payments than on health or education—an increase of 100 million people in just one year.
In monetary terms, debt service payments by developing countries rose sharply by $74 billion, from $847 billion to $921 billion in a single year.
Mr. Gentiloni added perspective, noting that debt service costs have nearly doubled over the past decade, fundamentally threatening development financing.
A Practical Plan of Action
The report, prepared by the UN Secretary-General’s Expert Group on Debt, aligns with the commitments of the Compromiso de Sevilla, the outcome document from the upcoming Fourth International Conference on Financing for Development.
The 11 recommendations in the report are both technically sound and politically feasible, according to Mr. Mohieldin. The proposals are organized around two central goals:
- Delivering meaningful debt relief
- Preventing future debt crises
Three Levels of Action
The plan proposes actions at three key levels:
- Multilateral Level: Reallocate and replenish global financial resources to improve liquidity, with an emphasis on supporting low-income countries.
- International Level: Establish a formal platform for direct engagement between borrowers and creditors to promote transparency and dialogue.
- National Level: Strengthen domestic institutions, improve policy coordination, manage interest rates prudently, and enhance risk management frameworks.
“These 11 proposals are entirely achievable,” said Ms. Grynspan. “What we need now is the political will of all stakeholders to turn them into reality.”