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Trapped in Debt: When Developing Countries Pay the Price of a Global Crisis

Reporter: Trisno Rusli |

Editor: Trisno Rusli |

Jumat , 24 Apr 2026 - 14:56

The United Nations Conference on Trade and Development (UNCTAD) notes that global public debt reached 102 trillion US dollars in 2024--source: chat gpt

KORANPALPRES.COM - In many developing countries today, crisis does not always appear in the form of unrest or political turmoil.

It shows up in numbers quiet, yet pressing. Cuts to healthcare budgets, reduced subsidies, and delayed education. Behind all of this, there is one common thread: debt.

A recent report by the United Nations Conference on Trade and Development (UNCTAD) notes that global public debt reached 102 trillion US dollars in 2024.

However, the greatest burden does not lie with developed nations.

Developing countries have been the most affected, with debt growing at a faster pace over the past decade.

The pressure does not stop at the total figures. Around 3.4 billion people now live in countries that allocate more funds to debt interest payments than to healthcare or education.

This means debt is no longer merely a development tool it has begun to reshape national priorities.

The situation worsens as financial flows move outward from developing countries.

Data from the World Bank shows that between 2022 and 2024, developing nations paid 741 billion US dollars more in debt repayments than the new loans they received. This marks the largest gap in the past fifty years.

This phenomenon signals a fundamental shift: from recipients of capital to contributors to the global financial system.

Funds that should support domestic development are instead flowing to international creditors.

trapped in debt: when developing countries pay the price of a global crisis                            koranpalpres.com - in many developing countries today, crisis does not always appear in the form of unrest or political turmoil.
it shows up in numbers quiet, yet pressing. cuts to healthcare budgets, reduced subsidies, and delayed education. behind all of this, there is one common thread: debt.
a recent report by the united nations conference on trade and development (unctad) notes that global public debt reached 102 trillion us dollars in 2024.
however, the greatest burden does not lie with developed nations.
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developing countries have been the most affected, with debt growing at a faster pace over the past decade.the pressure does not stop at the total figures. around 3.4 billion people now live in countries that allocate more funds to debt interest payments than to healthcare or education.
this means debt is no longer merely a development tool it has begun to reshape national priorities.
the situation worsens as financial flows move outward from developing countries.
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data from the world bank shows that between 2022 and 2024, developing nations paid 741 billion us dollars more in debt repayments than the new loans they received. this marks the largest gap in the past fifty years.
this phenomenon signals a fundamental shift: from recipients of capital to contributors to the global financial system.
funds that should support domestic development are instead flowing to international creditors.
one of the main factors worsening the situation is the rise in global interest rates.
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tight monetary policies adopted by central banks such as the federal reserve have significantly increased borrowing costs.
for developing countries, the impact is multiplied they must pay interest rates two to four times higher than those in advanced economies.
at the same time, global crises have arrived back-to-back. the covid-19 pandemic drained national budgets, while conflicts such as the russia-ukraine war pushed up energy and food prices.
together, these pressures have created what many analysts describe as a “permacrisis” a prolonged state of overlapping crises with no clear recovery in sight.
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in such circumstances, governments in developing countries face a difficult dilemma.
paying debt helps maintain investor confidence and market stability. yet at the same time, cutting domestic spending risks deepening social inequality.
some countries are even approaching the brink of default. debt restructuring has become an option, but not a long-term solution.
in 2024, around 90 billion us dollars of debt was restructured the highest level since 2010. still, this step is often seen as delaying the problem rather than solving it.
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the root of the issue lies in an unequal global financial system. developing countries often rely on external debt to finance development, yet have limited access to affordable financing.
when global conditions deteriorate, they are the first to feel the impact and the last to recover.
amid this pressure, a fundamental question emerges: how long must developing countries continue to pay the price for crises they did not fully create?
the answer is far from simple. reforms in the global financial system, improved debt transparency, and economic diversification are often proposed as solutions.
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however, without stronger and fairer global commitments, these measures risk remaining mere rhetoric.
today’s debt crisis is not just about numbers it is about the direction of the future.
if left unresolved, it will continue to erode the capacity of states to protect their citizens and widen the global inequality gap that has long existed.
the article entitled "trapped in debt: when developing countries pay the price of a global crisis" was written by mbkm fisip unsri student, vina alfina dziro.