3.4 Billion Left Behind as Debt Outweighs Education Spending

The World Bank Headquarters in Washington D.C.

Today, 3.4 billion people live in countries that spend more on debt interest payments than on health or education. This signals a troubling indication that the United Nations’ promise for the 2030 Agenda could be slipping away.

With less than five years remaining, developing countries face an estimated USD 4 trillion annual financing gap, pushing sustainable development efforts to the back burner.

The financing gaps across regions reflect this disparity:

Asia and Oceania

2.139 billion people (Interest > Education)

2.24 billion people (Interest > Health)

Africa

402 million people (Interest > Education)

791 million people (Interest > Health)

Latin America and the Caribbean

140 million people (Interest > Education)

356 million people (Interest > Health)

The Aggregate

3.4 billion people (Interest > Education)

2.4 billion people (Interest > Health)

Education is widely recognised as the most effective long-term solution to lifting people out of poverty. Now, with almost half the world’s population living in regions where debt interest payments are prioritised over education, the future looks daunting. This threatens progress towards SDG 4 (Quality Education) and creates obstacles for SDG 1 (No Poverty).

The Sevilla Platform for Action

At the 4th International Conference on Financing for Development (FfD4), the Sevilla Platform for Action was launched, introducing 130 “high-impact” initiatives aimed at reconstructive and expansionary policy implementation from the outset.

The platform focuses on three key solutions:

Catalysing Investments at Scale – bridging SDG financing gaps through mobilisation of tax revenues, blended finance initiatives, guarantees, local currency lending by multilateral development banks, and increased crisis response financing.

Debt Reform Initiatives – including a global hub for debt swaps in exchange for development, a debt pause clause alliance, and a borrowers’ forum.

Structural Reform of Global Financial Architecture – reforms at national and global levels, involving coalitions of countries and institutions aimed at country-led platforms, inclusion of vulnerability measures beyond GDP in financing operations, and updated development cooperation globally.

UNCTAD Secretary-General Rebecca Grynspan stressed the need for an integrated approach: “We need to think about development in an integrated way where trade, investment, finance and technology reinforce each other, as the Sevilla Commitment states.”

According to UNCTAD, trade remains “the strongest link between local economies and global growth.” To build these networks, the platform advocates predictable trade rules and transparent policies to enhance capacity, competitiveness, and resilience among developing economies.

Another proposal is “turning public debt from a burden into a tool of development,” calling for lower borrowing costs and fairer mechanisms, exceeding limits set by the G20 Common Framework for Debt Treatment. This includes tripling lending capacity, increasing the borrowing limit from USD 50 billion to USD 150 billion.

The Global Debt Trap

In the last decade, developing countries have borrowed more and at higher interest rates than developed countries, leading to increased debt burdens and shrinking essential public services. Since 2010, debt in developing countries has grown twice as fast as in advanced economies. Today, that debt totals USD 102 trillion, an increase of USD 5 trillion from last year.

In 2024 alone, 61 countries allocated more than 10 percent of government revenues to interest payments, amounting to USD 921 billion. Collectively, developing countries now owe USD 31 trillion—resources that could have been directed toward education and healthcare.

To put this in perspective, many developing countries borrow at rates two to four times higher than the United States despite having far fewer resources to repay their debts. These burdens create crushing opportunity costs, stunting the lives of some of the world’s most vulnerable populations.

Debt can be a powerful tool for investment and development when used responsibly. However, rising interest payments are crowding out future investments, creating cycles of delay and dependency through debt traps. This has cost developing nations USD 25 billion in net interest payments to creditors, causing net negative financial flows for several consecutive years. These countries are paying more to borrow money than they receive, making sustainable development nearly impossible and forcing some economies into survival mode.

UN Secretary-General António Guterres described the current debt system as “unsustainable, unfair and unaffordable, with many governments spending more on debt payments than on essentials like health and education combined.” He called for a new global debt system offering long-term, affordable financing to reverse the damage caused by the current global debt trap.