1、UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENTA world of debtUNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENTREPORT 2024A growing burden to global prosperityA world of debtA growing burden to global prosperity2Contents2 Introduction.31.Global public debt keeps rising.42.The cost of external pu

2、blic debt remains high.103.People pay the price.144.A call for action to finance sustainable development.18A world of debtA growing burden to global prosperityAbout UN Trade and Development(UNCTAD)UNCTAD is the UNs leading institution dealing with trade and development.It is part of the UN Secretari

3、at and has a membership of 195 countries,one of the largest in the UN system.UNCTAD supports developing countries to access the benefits of a globalized economy more fairly and effectively by providing economic and trade analysis,facilitating consensus-building and offering technical assistance to h

4、elp developing countries use trade,investment,finance and technology for inclusive and sustainable development.A World of DebtA World of Debt was prepared by the United Nations Global Crisis Response Group(UN GCRG)-Technical Team at UNCTAD led by Rebeca Grynspan and coordinated by Carlos Razo.The te

5、am members include Julia Grbler,Daniel Hopp,Daniel Munevar,Swati Sharma and Giovanni Valensisi.Valuable comments and suggestions were provided by Penelope Hawkins and Daniela Magalhaes Prates.Graphic design and desktop publishing were done by Nadege Hadjemian.For further information please contact g

6、crgunctad.org The boundaries and names shown and the designations used on the maps do not imply official endorsement or acceptance by the United Nations.A world of debtA growing burden to global prosperity3 3A world of debtA growing burden to global prosperity IntroductionPublic debt can be a powerf

7、ul tool for development,enabling governments to finance critical expenditures and invest in a better future for their people.However,when public debt grows excessively or rapidly,it becomes a heavy burden,particularly for developing countries.This report highlights the alarming surge in global publi

8、c debt,driven by cascading crises in recent years.The growing debt burden disproportionately impacts developing countries,as servicing it diverts essential resources away from their development aspirations.Recent events have worsened this challenge.The rise in global interest rates since 2022 furthe

9、r strained public budgets in developing countries.High interest payments are outpacing the growth in essential public expenditures such as health,education,and climate action.In the developing world,home to 3.3 billion people,one out of every three countries spends more on interest payments than on

10、these critical areas for human development.The global financial architecture is no longer capable of meeting the needs of the world in the twenty-first century.This is a substantial challenge to sustainable development.The United Nations has outlined a roadmap to fast-track sustainable development i

11、n the SDG Stimulus package,focusing on three key areas:1 tackling the high cost of debt and rising risks of debt distress,2 massively scaling up affordable long-term financing for development,and3 expanding contingency financing for countries in need.Developing countries must not be forced to choose

12、 between servicing their debt or serving their people.The international financial architecture must change to ensure a prosperous future for both people and the planet.A reform is not only necessary,it is urgent.A world of debtA growing burden to global prosperity41.Global public debt keeps risingGl

13、obal public debt continues to increase rapidly,driven by cascading crises as well as the sluggish and uneven performance of the global economy.In 2023,public debt,comprising domestic and external general government debt,reached US$97 trillion,a US$5.6 trillion increase from 2022(figure 1).Figures re

14、present nominal values in current US$.Public debt refers to general government domestic and external debt throughout the document.General government consists of central,state and local governments and the social security funds controlled by these units.Source:UN GCRG-technical team calculations,base

15、d on IMF World Economic Outlook(April 2024).Figure 1Public debt reaches record levels in 2023Global public debt in US$trillion2000225075100Globalpublicdebt$97 trillionA world of debtA growing burden to global prosperity5This growth is marked by significant regional disparities.

16、Public debt in developing countries is rising at twice the rate of that in developed countries(figure 2).Source:UN GCRG-technical team calculations,based on IMF World Economic Outlook(April 2024).Figure 2Public debt grows twice as fast in developing countriesIndex:Outstanding public debt in 2010=100

17、DevelopingcountriesDevelopingcountriesexcl.ChinaDevelopedcountries2000220300350A world of debtA growing burden to global prosperity6In 2023,public debt in developing countries reached US$29 trillion,accounting for 30%of the global total(figure 3).This is a substantia

18、l increase from a 16%share in 2010 and reflects the rapid growth of public debt in developing countries.The contrast among developing regions is stark.Over three-quarters of this debt is owed by countries in Asia and Oceania,while Latin America and the Caribbean accounts for 17%and Africa for just 7

19、%.The burden of this debt varies significantly with countries ability to repay it and is exacerbated by the inequality embedded in the international financial architecture:Those least able to afford it end up paying the most.Source:UN GCRG-technical team calculations,based on IMF World Economic Outl

20、ook(April 2024).Figure 3 Almost a third of global public debt is owed by developing countriesPublic debt in US$billion(2023)China14 773Egypt378Brazil1 841United States of America33 417Japan10 632France3 354Germany2 855India2 956Mexico950Developed countries Developing regions Asia and OceaniaLatin Am

21、erica and the CaribbeanAfricaA world of debtA growing burden to global prosperity7This dynamic becomes evident when examining the evolution of public debt relative to the size of developing economies.In over half of these countries,public debt has declined relative to GDP.The median value of the pub

22、lic debt-to-GDP ratio fell from a peak of 60.4%in 2020 to 54.7%in 2023(figure 4).This decline is due to high global inflation,which increases nominal GDP,and stronger-than-expected real GDP growth in middle-income countries in Asia and Oceania,and to a lesser extent in Latin America and the Caribbea

23、n.Consequently,even though the stock of public debt increased also in these regions,the median debt-to-GDP ratios have decreased.Figure 4Although public debt is growing in all regions,only in Africa it is growing faster than GDPPublic debt as a share of GDP-Median per country group(percentage)Source

24、:UN GCRG-technical team calculations,based on IMF World Economic Outlook(April 2024).Note:The median represents the value that lies at the midpoint of the data distribution.Developing countriesAfricaAsia and OceaniaLatin America andthe Caribbean2060802002320102023A world of deb

25、tA growing burden to global prosperity8In contrast,economic performance in Africa has faltered due to global shocks,resulting in a heavier debt burden.The median public debt-to-GDP ratio has continued to increase,reaching 61.9%in 2023.As a result,an increasing number of developing countries with hig

26、h debt-to-GDP levels are concentrated in Africa(figure 5).The regions share of countries with debt-to-GDP ratios above 60%has increased from 25%to 46%between 2013 and 2023.Figure 5More countries face high debt burdens,especially in AfricaNumber of developing countries with public debt above 60%of GD

27、PSource:UN GCRG-technical team calculations,based on IMF World Economic Outlook(April 2024).20406080201020152020AfricaAsia and OceaniaLatin America and theCaribbeanA world of debtA growing burden to global prosperity92.The cost of external public debt remains high.Developing countries are grappling

28、with an international financial architecture,whose entrenched asymmetries exacerbate the impact of cascading crises on sustainable development.This system intensifies their debt burden by limiting access to affordable development finance and pushing them to borrow from more volatile and expensive ex

29、ternal sources.The limited size of domestic financial markets and higher levels of external public debt make them more vulnerable to external shocks and financial instability.For example,when global financial conditions change or international investors become more risk-averse,borrowing costs can su

30、ddenly spike.Additionally,if a countrys currency devalues,debt payments in foreign currency can soar,leaving less money for development spending.Consequently,developing countries are forced to increase the transfer of resources to their external creditors,while resolving debt crises becomes more dif

31、ficult.Developing countries external public debt reached US$3.2 trillion in 2022.For half of these countries,external public debt was at least as high as 28.4%of GDP and 92.4%of their exports(figure 6).Both indicators show improvements since 2020,marginally in the case of GDP and substantially in th

32、e case of exports.The main driver of the decline in the external public debt-to-export ratio is the evolution of exports,which experienced a sharp slump during the pandemic followed by a strong recovery amid high commodity prices in 2022.A world of debtA growing burden to global prosperity10Despite

33、the improvement of these indicators,external public debt service requirements remain high,reaching US$365 billion in 2022.Of particular concern is the evolution of the external debt service-to-government revenue ratio.Governments are now allocating twice as much resources towards servicing this debt

34、 relative to revenues compared to 2011,leaving a declining share of resources for investments in sustainable development(figure 7).Figure 6Developing countries external public debt indicators returned to pre-COVID levelsMedian for developing countries,(percentage)Figure 7Yet,external debt service bu

35、rdens remain high Median for developing countries,(percentage)Source:UN GCRG-technical team calculations,based on IMF World Economic Outlook(April 2024)and World Bank International Debt Report 2023).Note:External public debt refers to external Public and Publicly Guaranteed(PPG)debt.The median repre

36、sents the value that lies at the midpoint of the data distribution.Source:UN GCRG-technical team calculations,based on IMF World Economic Outlook(April 2024)and World Bank International Debt Report 2023).Note:External public debt refers to external Public and Publicly Guaranteed(PPG)debt.The median

37、represents the value that lies at the midpoint of the data distribution.200022020406080100120External public debt asa share of exportsExternal public debt asa share of GDP71.519.228.492.42000220246810External publicdebt servicerelative to exportsExternal p

38、ublicdebt servicerelative to government revenues58.83.86.3A world of debtA growing burden to global prosperity11Furthermore,half of developing countries are allocating at least 6.3%of their export revenues to external public debt service.For comparison,the 1953 London Agreement on Germanys war debt

39、limited the amount of export revenues that could be spent on external debt servicing(public and private)to 5%to avoid undermining the recovery.The growing burden of debt on development is a consequence of the evolution of debt financing over the last decade.Governments in developing countries borrow

40、 from various sources,including bilateral(other governments),multilateral(such as multilateral development banks)and private creditors(including bondholders,banks,and other lenders).Since 2010,the portion of external public debt owed to private creditors has risen across all regions,accounting for 6

41、1%of developing countries total external public debt in 2022(figure 8).Figure 8The creditor base makes debt expensive and difficult to restructure External public debt,shares by type of creditor(2022)Source:UN GCRG-technical team calculations,based on IMF World Economic Outlook(April 2024)and World

42、Bank International Debt Report 2023.Note:External public debt refers to external Public and Publicly Guaranteed(PPG)debt.Private creditorsMultilateral creditorsBilateral creditors61%26%14%Developing countries44%61%23%15%Latin Americaand the Caribbean34%23%AfricaPrivate creditorsMultilateral creditor

43、sBilateral creditors61%26%14%Developing countries44%61%23%15%Asia andOceania73%23%Latin Americaand the CaribbeanA world of debtA growing burden to global prosperity12This rising reliance on private creditors presents three main challenges.Firstly,the increasing complexity of the creditor base makes

44、debt restructuring more difficult as it requires negotiating with a broader range of creditors with diverging interests and legal frameworks.Delays and uncertainties increase the cost of resolving debt crises.The relationship between restructuring costs and time required for completion is highly rel

45、evant in the current context.Debt restructurings since 2020 are taking longer to finalise compared to episodes in previous decades,underscoring the need for improved debt crisis resolution mechanisms.Secondly,lending by private creditors is volatile and prone to rapid shifts,especially during crises

46、,as investors pull back in a flight to safety.This can lead to a resource outflow when countries can least afford it.In 2022,developing countries paid US$49 billion more to their external creditors than they received in fresh disbursements,resulting in a negative net resource transfer.Figure 9Privat

47、e creditor withdrawal causes nearly US$50 billion in outflows Developing countries net transfers on external public debt by type of creditor in US$billionSource:UN GCRG-technical team calculations,based on World Bank International Debt Report 2023.Note:Net transfers are defined as disbursements minu

48、s debt service on external public and publicly guaranteed debt.Total net resourcetransferPrivateBilateralMultilateral2002002002220102022A world of debtA growing burden to global prosperity13The net resource transfer varied significantly by creditor type,illustrating the complex

49、ity of the current creditor base.In 2022,bilateral and multilateral creditors provided a total of US$40 billion in positive transfers,while private creditors withdrew a record US$89 billion from developing countries(figure 9).A total of 52 countries experienced net outflows of resources in 2022,up f

50、rom 32 in 2010,with most of the affected countries being in Africa and Asia and Oceania(figure 10).The growth in the number of countries experiencing resource transfer highlights the widespread nature of the problem,exacerbated by rising borrowing costs.Thirdly,borrowing from private sources on comm

51、ercial terms is more expensive than concessional financing from multilateral and bilateral sources.The inequalities embedded in the international financial architecture exacerbate these differences in the cost of financing.Figure 10Developing countries with net debt outflows more than doubled since

52、2014Number of developing countries with net negative transfers on external public debtSource:UN GCRG-technical team calculations,based on World Bank International Debt Report 2023.Note:Net transfers are defined as disbursements minus debt service on external public and publicly Guaranteed debt.10203

53、04050201020152020AfricaAsia and OceaniaLatin America and theCaribbeanA world of debtA growing burden to global prosperity14The borrowing costs of developing countries far exceed those of developed countries.Developing regions borrow at rates that are 2 to 4 times higher than those of the United Stat

54、es and 6 to 12 times higher than those of Germany(figure 11).High borrowing costs increase the resources needed to pay creditors,which makes it difficult for developing countries to finance investments.Figure 11Borrowing costs of developing countries are way higher than those of developed onesBond y

55、ield ratio of developing to developed countries9.85.36.82.50.8Germany AfricaLatin America and the CaribbeanAsia and OceaniaUSASource:UN GCRG-technical team calculations,based on Refinitiv.Note:Illustrative comparison of the average JPM EMBI Global Diversified USD bond yields per region with the 10-y

56、ear bond yields of Germany and the United States from January 2020 to May 2024.A world of debtA growing burden to global prosperity153.People pay the priceThe increase in interest rates by central banks worldwide since 2022 is having a direct impact on public budgets in developing countries.Net inte

57、rest payments on public debt reached US$847 billion in 2023,a 26%increase compared to 2021(figure 12).Source:UN GCRG-technical team calculations,based on IMF World Economic Outlook(April 2024).Note:Net interest payments of the general government refer to the total amount of domestic and external int

58、erest expenses incurred from loans and other forms of borrowing,minus any interest income received.Figure 12Developing countries interest payments reach US$847 billionNet interest payments of developing countries in US$billion2000220200400600800Interestpaymentsin US$billion847A

59、 world of debtA growing burden to global prosperity16Currently,more than half of developing countries allocate at least 8%of government revenues to interest payments,a figure that has doubled over the past decade(figure 13).The rising pressure of interest payments is substantial across regions,parti

60、cularly in Africa and Latin America and the Caribbean.In 2023,a record 54 developing countries,equivalent to 38%of the total,allocated 10%or more of government revenues to interest payments,with nearly half of them in Africa(figure 14).Figure 1454 developing countries spend heavily on interest,nearl

61、y half of them in Africa Number of developing countries with net interest payments exceeding 10%of revenues Source:UN GCRG-technical team calculations,based on IMF World Economic Outlook(April 2024).Note:Net interest payments of the general government refer to the total amount of domestic and extern

62、al interest expenses incurred from loans and other forms of borrowing,minus any interest income received.Figure 13Developing countries interest payments double relative to revenuesNet interest payments of developing countries relative to government revenues,(percentage)Source:UN GCRG-technical team

63、calculations,based on IMF World Economic Outlook(April 2024).Note:Median per country group.The median represents the value that lies at the midpoint of the data distribution.Net interest payments of the general government refer to the total amount of domestic and external interest expenses incurred

64、from loans and other forms of borrowing,minus any interest income received.Developing countriesAfricaAsia and OceaniaLatin America andthe Caribbean2002023200234.24.42.65.28.19.27.89.22040201020152020AfricaAsia and OceaniaLatin America and theCaribbeanA world of debtA growing bu

65、rden to global prosperity17Developing countries interest payments are not only growing fast,but they are outpacing growth in critical public expenditures such as health and education(figure 15).The rapid increase in interest payments is constraining spending across developing countries.For example,d

66、uring the initial years of the COVID-19 pandemic,Africa and Asia and Oceania(excluding China)spent more on interest payments than on health.For the 2020-2022 period,public per capita health expenditures in these regions were only US$39 and US$62,respectively.Meanwhile,per capita expenditure to repay

67、 public debt interests reached US$70 and US$84,respectively(figure 16).Figure 15Interest payments are growing faster than other public expenditures Nominal change(%)of public expenditure categories in developing countries between 2010-2012 and 2020-2022Figure 16Some regions spend more on servicing d

68、ebt than serving their people Public expenditure per capita on net interest,education and health in US$(2020-2022)Source:UN GCRG-technical team calculations,based on IMF World Economic Outlook(April 2024)and World Bank World Development Indicators.Note:Aggregate expenditures for developing countries

69、,average for 3-year period.Interest refers to net interest payments.Source:UN GCRG-technical team calculations,based on IMF World Economic Outlook(April 2024)and World Bank World Development Indicators.Note:Aggregate expenditures for developing countries.Interest refers to net interest payments.Educ

70、ationHealth+38%+58%+73%Interest%AfricaAsia and Oceania(excl.China)Asiaand OceaniaLatin Americaand the CaribbeanHealth3962147323Education60110203364Interest708494280%A world of debtA growing burden to global prosperity18The number of countries where interest payments surpass spending in these essenti

71、al categories is rising(figure 17).During the years 2020 2022,there were 15 countries whose interest payments exceeded education expenditures,and 46 countries where they were higher than health expenditures.A total of 3.3 billion people live in countries that spend more on interest payments than on

72、either education or health(figure 18).This situation is untenable and must change.Figure 17A growing number of countries spend more on interest than developmentNumber of developing countries spending more public resources on interest than on education or health Figure 183.3 billion people live in co

73、untries that spend more on interest than education or healthPopulation in developing countries where spending on interest exceeds education or health(2020-2022)Source:UN Global Crisis Response Group calculations based on IMF World Economic Outlook(April 2024)and World Bank World Development Indicato

74、rNote:Interest refers to net interest payments.Source:UN GCRG-technical team calculations,based on IMF World Economic Outlook(April 2024)and World Bank World Development Indicators.Note:Interest refers to net interest payments.-202212153446HealthEducationEducationHealth2.1 billion3.3 bi

75、llionEducationHealthAfricaAsia and OceaniaLatin America and the Caribbean 1301,8311387682,212347Mllions of peopleA world of debtA growing burden to global prosperity19 In focus The impact of debt on climate actionAverting the worst impacts of climate change requires urgent actions to limit global wa

76、rming to 1.5C.Every fraction of a degree matters,and each penny invested makes a difference.Developing countries need to increase climate investments from their current level of 2.1%of GDP to 6.9%by 2030 to meet the Paris Agreement targets.However,they are currently spending more on interest payment

77、s than on climate investments(figure 19).Additionally,climate finance commitments agreed at COP15 have lagged.The target of US$100 billion per year in climate finance from developed countries was only reached in 2022,two years behind schedule.Achieving climate goals will be difficult for developing

78、countries as long as debt constraints persist and climate finance commitments fall short.Source:UN GCRG-technical team calculations,based on IMF World Economic Outlook(April 2024)and Songwe.V,et.al.(2022)“Finance for climate action:scaling up investment for climate and development”.Note:Figures for

79、Emerging Markets and Developing Countries(EMDC),excluding China,for 2019(latest available comparable data).The EMDC group is an IMF classification and it differs from the UN developing country classification used throughout this report.Climate investmentsInterests2.1Figure 19Interest outweighs clima

80、te investments in emerging and developing countriesPublic expenditure in emerging markets and developing countries excl.China on interest and climate investments as%of GDP(2019)2.4A world of debtA growing burden to global prosperity20Figure 20Aid through loans rises while action related to debt hits

81、 record lowOfficial Development Assistance(ODA),share of loans in%and action related to debt in US$billions In focus Debt and aidThe negative impact on developing countries from resource transfers to creditors has been exacerbated by three shifts in Official Development Assistance(ODA):Aid to develo

82、ping countries has declined for two consecutive years,dropping to US$164 billion in 2022.A growing share of aid is now provided through concessional loans rather than grants.The share of loans in aid for developing countries increased from 28%in 2012 to 34%in 2022.Resources allocated to actions rela

83、ted to debt,including debt relief,swaps,restructuring and others,have hit a historical low,falling from US$4.1 billion in 2012 to only US$300 million in 2022.The decline in overall aid,the increasing use of loans,and the sharp reduction in debt relief resources add further pressure on developing cou

84、ntries burdened by debt.Source:UN GCRG-technical team calculations(2024),“Aid under pressure:3 accelerating shifts in Official Development Assistance”.Share of loans(in%of total ODA)Action related to debt(in nominal US$billion)Trend .934.44.10.3123A world of debtA growing burden to global

85、 prosperity214.A call for action to finance sustainable developmentThe challenges posed by debt to sustainable development are at the forefront of ongoing multilateral discussions.At the most recent United Nations General Assembly,149 countries addressed issues related to financing for development o

86、r debt.Specifically,73 countries highlighted the various ways in which debt is intertwined with sustainable development.The call for reforming the international financial architecture is loud,with nearly 50 world leaders calling for efforts towards this common goal.Figure 21Nearly 50 countries call

87、for international financial architecture reformFinance and debt related topics in United Nations General Assembly speeches by number of countries and share by country group in percentage(2023)Source:UN GCRG-technical team calculations,based on 192 speeches of the General Debate at the 78th Session o

88、f the General Assembly,19-23 and 26 September 2023.Finance and debt1498267Reform of the international fnancial architecture 47309Number of speeches%of developing countries%of developed countriesA world of debtA growing burden to global prosperity22A roadmap to finance sustainable developmentTo addre

89、ss the global debt challenges and achieve sustainable development,the United Nations,in the SDG Stimulus package and the Summit of the Futures policy brief on the Reforms to the International Financial Architecture,outline a clear way forward.Provide greater liquidity in times of crisis,expanding co

90、ntingency finance so that countries are not forced into debt as a last resort,including through the strengthened use of Special Drawing Rights,a temporary suspension of IMF surcharges,and increased quota-access windows to IMF emergency financing.Make the system more inclusive,improving the real and

91、effective participation of developing countries in the governance of the international financial architecture.Tackling the high cost of debt and rising risk of debt distress and create an effective debt workout mechanism to address the slow progress of the G20 Common Framework for Debt Treatment due

92、 to limited country eligibility,creditor coordination challenges and the lack of automatic debt service suspension clauses to participating countries.More and better finance,massively scaling up affordable long-term financing.The transformation and expansion of Multilateral Development Banks to supp

93、ort long term sustainable development and scaling up private resources.More concessional finance;fulfilling aid and climate finance commitments2431Inequality is embedded in the international financial architecture.This must change.Our Common Agenda Policy Brief 6Reforms to the International Financia

94、l Architecture MAY 2023United Nations Secretary-Generals SDG Stimulus to Deliver Agenda 2030 FEBRUARY 2023A world of debtA growing burden to global prosperity23UNCTADUNCTADunctad.org/facebookunctad.org/youtubeunctad.org/flickrunctad.org/linkedinUNCTAD/OSG/TT/INF/2024/1This document has not been formally edited.