Ten years after the world embraced the Sustainable Development Goals (SDGs), progress is confronting unprecedented challenges. Among them is what United Nations officials are calling a “silent crisis,” as spiraling debt service payments push millions into deeper vulnerability.
This crisis has grown so severe that more than 3.4 billion people now live in countries spending more on repaying debt than on vital services like health care. Additionally, these countries prioritize debt repayment over education. That alarming figure underscores the urgent need for systemic solutions capable of reversing this dangerous trend.
DEBT SERVICE SOARS WHILE DEVELOPMENT SUFFERS
UN Deputy Secretary-General Amina Mohammed presented a new report titled Confronting the Debt Crisis: 11 Actions to Unlock Sustainable Financing. The launch event featured notable experts, including Mahmoud Mohieldin, Rebeca Grynspan, and Paolo Gentiloni, who highlighted the far-reaching impact of rising debt costs on development efforts.
“Borrowing is critical for development,” Ms. Mohammed observed. However, she stressed that today’s debt environment is unsustainable for many nations. Over two-thirds of low-income countries are either in debt distress or teetering on the brink of it.
AN ESCALATING BURDEN WITH GLOBAL CONSEQUENCES
Rebeca Grynspan, who heads the UN Conference on Trade and Development (UNCTAD), warned that this crisis is accelerating rapidly. Debt service payments by developing nations surged by $74 billion in only one year. These payments rose from $847 billion to $921 billion.
The consequences are striking. Every additional dollar spent servicing debt leaves fewer resources for public investment, essential infrastructure, and poverty reduction. As a result, millions are denied access to opportunities that the SDGs were designed to create.
Paolo Gentiloni explained that the root of this crisis lies largely in soaring debt service costs. “Practically, the debt services costs doubled in the last ten years,” he noted, underscoring the urgency of coordinated international action.
THE COMPROMISO DE SEVILLA AND A WAY FORWARD
The UN Secretary-General’s Expert Group on Debt prepared the report. It reinforced commitments set out in the Compromiso de Sevilla. This document was developed ahead of the Fourth International Conference on Financing for Development. It emphasizes concrete measures to unlock sustainable financing.
Mahmoud Mohieldin emphasized that the report’s recommendations are not only technically feasible but also politically viable. They have two critical goals. The first is to deliver meaningful debt relief. The second is to prevent future debt crises from spiraling out of control.
THREE LEVELS OF ACTION TO TACKLE THE DEBT CRISIS
The proposed solutions are organized across three levels: multilateral, international, and national. Each level includes targeted measures that together could stabilize economies and restore fiscal space for development investments.
1. Multilateral Level: Inject Liquidity and Support Vulnerable Countries
At the multilateral level, the report calls for repurposing and replenishing funds to inject liquidity into the financial system. This includes expanding support to low-income countries through concessional financing and more flexible repayment terms.
These steps would enable governments to reallocate resources toward critical development priorities without compromising fiscal stability. Transitioning from high-cost borrowing to affordable financing models can also reduce default risks and improve economic resilience.
2. International Level: Foster Dialogue Between Borrowers and Creditors
At the international level, the report proposes establishing a platform where borrowers and creditors engage directly. This dialogue mechanism would improve transparency and promote shared responsibility in resolving debt challenges.
Such a platform could also help standardize debt restructuring processes, making them faster and more predictable. In turn, this would ease uncertainty for markets and allow countries to recover more swiftly from financial shocks.
3. National Level: Strengthen Institutions and Manage Risks
Nationally, countries are urged to enhance institutional capacity, improve policy coordination, and bolster risk management practices. This includes developing stronger debt management frameworks, managing interest rate exposure, and investing in local financial systems.
These reforms can empower governments to make informed borrowing decisions and prevent future crises. When paired with international support, robust institutions can anchor long-term economic growth and sustainable development.
POLITICAL WILL IS THE KEY TO PROGRESS
“These are eleven proposals that are doable. They only need the political will of all the actors to be able to make them real,” Ms. Grynspan stressed during the report’s presentation.
Without decisive action, debt distress will continue to erode hard-won gains in poverty reduction, education, and health care. By contrast, implementing these recommendations could unlock new financing streams. This approach would provide low-income countries with the fiscal space they need to meet the SDGs.
A Call for Global Solidarity
The debt crisis is not merely a financial issue—it is a moral imperative that demands global solidarity. As interest costs consume ever-larger shares of national budgets, the international community must recognize that development without fiscal sustainability is unattainable.
Debt relief and sustainable financing are not optional. They are the foundation for delivering on promises made a decade ago when the world adopted the SDGs. Renewed commitment, innovative partnerships, and political courage are essential to confront this silent crisis effectively.
