A world of debt- UNCTAD Report 2024

A world

of debt

Report 2024

A growing burden to

global prosperity

Why it matters?

Public debt can be vital for development. Governments use it to finance their expenditures, to protect and invest in their people, and to pave their way to a better future. However, it can also be a heavy burden, when public debt grows too much or too fast. 

This is what is happening today across the developing world. 

Global public debt has reached a record high of US$ 97 trillion in 2023.Although public debt in developing countries reached less than one third of the total – US$ 29 trillion – since 2010 it has grown twice as fast as in developed economies.

There is a stark contrast among developing regions. Asia and Oceania hold 27 % of global public debt, followed by Latin America and the Caribbean (5%), and Africa (2%). The burden of this debt varies significantly, with countries' ability to repay it exacerbated by inequality embedded in the international financial architecture.

Developing countries are now facing a growing and high cost of external debt. Debt service on external public debt reached US$ 365 billion in 2022, equivalent to 6.3% of export revenues. For comparison, the 1953 London Agreement on Germany’s war debt limited the amount of export revenues that could be spent on external debt servicing (public and private) to 5% to avoid undermining the recovery.

This dynamic is largely a result of high borrowing costs which increase the resources needed to pay creditors, making it difficult for developing countries to finance investments. Developing regions borrow at rates that are 2 to 4 times higher than those of the United States and 6 to 12 times higher than those of Germany.

Moreover, developing countries experienced a net resource outflow when they could 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.

The impact of these trends on development is a major concern, as people pay the price.

The increase in interest rates by central banks worldwide since 2022 is having a direct impact on public budgets. Developing countries’ net interest payments on public debt reached US$ 847 billion in 2023, a 26% increase compared to 2021. In the same vein, in 2023 a record 54 developing countries, equivalent to 38% of the total, allocated 10% or more of government revenues to interest payments.

Developing countries’ interest payments are not only growing fast, but they are outpacing growth in critical public expenditures such as health and education. As a consequence, interest payments are constraining spending across developing countries. For example, during the initial years of the COVID-19 pandemic, Africa and Asia and Oceania (excluding China) spent more on interest payments than on health.

Overall, a total of 3.3 billion people live in countries that spend more on interest payments than on either education or health. Moreover, in emerging and developing countries interest payments outweigh climate investments, thus slowing down efforts towards climate change adaptation and mitigation.

Developing countries must not be forced to choose between servicing their debt or serving their people.

______________________________________________

Developing countries must not be forced to choose between servicing their debt or serving their people. Instead, the international financial architecture must evolve to ensure a prosperous future for both people and the planet. 

To address these challenges and achieve sustainable development, the United Nations outlines a clear way forward in the SDG Stimulus package and the Summit of the Future’s policy brief on the Reforms to the International Financial Architecture. UNCTAD _____________________________________________

World Population 

⃝•  According to UN estimates, the world population passed the 8 billion mark on 15 November (2023). Over the past 25 years, the number of people on the planet has increased by one third, or 2.1 billion. Humanity is expected to grow by another fifth to just under 10 billion around 2050.

In the last 25 years, almost all the growth happened in developing economies, mainly in Asia and Oceania (1.2 billion more people) and Africa (an additional 700 million individuals). This trend is expected to continue, with half of the projected increase in world population between now and 2050 expected to occur in a few larger countries in Africa and Asia.

As the population has grown, the share of people living in developing countries has increased from 66% in 1950 to 83% now and should reach 86% by 2050. This underlines the importance of tackling the challenges that affect these nations, such as hunger, access to clean water and sanitation and health services, and getting people connected to affordable sources of sustainable electricity and the Internet.  

An estimated 828 million people go to bed hungry every night, the vast majority in developing countries. These countries, especially in Africa, are bearing the heaviest brunt of socioeconomic inequalities and poor living conditions, according to UNCTAD’s Inclusive Growth Index. In more than three fourths of African countries, half of the population has no access to clean and safely managed water. And in some developing nations, just one in 100 people have a broadband Internet connection. 

Faster population growth in developing countries makes addressing the climate emergency all the more urgent. Developing countries already struggle to find ways to meet increasing food and energy needs and will need support to meet the future demands of a growing population without excessive use of natural resources, pollution and waste generation. 

Countries with high economic performance generate twice the amount of waste per capita compared to developing countries. This highlights the need for both developed and developing countries to “decouple” prosperity from CO2 emissions while ensuring a just low-carbon transition. Developed countries should redouble their efforts towards a low-emissions future, while providing developing countries with the technologies, skills and financial support necessary to move their economies towards industries and sectors that are less polluting. This must be a priority at COP27 climate summit.

While fast population growth in developing countries presents many challenges, it can also be a source of new economic opportunities – for instance in Africa where the size of the working age population is increasing relative to younger and older generations. But if the world is unable to break the link between pollution and affluence, the challenges will likely overshadow the opportunities for the entire planet.

Syrian rebels had help from Ukraine in humiliating Russia

Eager to bloody Putin’s nose, Kyiv supplied drones for the offensive that toppled Assad

A group of militants celebrate the fall of the Assad regime in central Damascus on Monday.

(Lorenzo Tugnoli for The Washington Post) 

Opinion  By David Ignatius  

December 10, 2024

The Syrian rebels who swept to power in Damascus last weekend received drones and other support from Ukrainian intelligence operatives who sought to undermine Russia and its Syrian allies, according to sources familiar with Ukrainian military activities abroad.

Ukrainian intelligence sent about 20 experienced drone operators and about 150 first-person-view drones to the rebel headquarters in Idlib, Syria, four to five weeks ago to help Hayat Tahrir al-Sham (HTS), the leading rebel group based there, the knowledgeable sources said.

The aid from Kyiv played only a modest role in overthrowing Syrian President Bashar al-Assad, Western intelligence sources believe. But it was notable as part of a broader Ukrainian effort to strike covertly at Russian operations in the Middle East, Africa and inside Russia itself.

Ukraine’s covert assistance program in Syria has been an open secret, though senior Biden administration officials said repeatedly in answer to my questions that they weren’t aware of it. Ukraine’s motivation is obvious: Facing a Russian onslaught inside their country, Ukrainian intelligence has looked for other fronts where it can bloody Russia’s nose and undermine its clients.

The Ukrainians have advertised their intentions. The Kyiv Post in a June 3 article quoted a source in the Ukrainian military intelligence service, known as the GUR, who told the newspaper that “since the beginning of the year, the [Syrian] rebels, supported by Ukrainian operatives, have inflicted numerous strikes on Russian military facilities represented in the region.”

That story, posted online, included a link to video footage that showed attacks on a stone-ribbed bunker, a white van and other targets that it said had been struck by Ukrainian-supported rebels inside Syria. The paper said that the Syria operation was conducted by a special unit known as “Khimik” within the GUR, “in collaboration with the Syrian opposition.”

Russian officials have been complaining for months about the Ukrainian paramilitary effort in Syria. Alexander Lavrentyev, Russia’s special representative for Syria, said in a November interview with TASS, “We do indeed have information that Ukrainian specialists from the Main Intelligence Directorate of Ukraine are on the territory of Idlib.”

Russian Foreign Minister Sergei Lavrov had made a similar claim in September about “Ukrainian intelligence emissaries” in Idlib. He claimed they were conducting “dirty operations,” according to the Syrian newspaper Al-Watan, which asserted that Lt. Gen. Kyrylo Budanov, head of the GUR, had been in touch personally with HTS.

Before the HTS offensive toppled Assad, Russian officials had asserted that Ukraine’s link with the rebel group was an attempt to recruit Syrian fighters for its war against the Kremlin. A September report in an online site called the Cradle alleged that Ukraine had offered 75 unmanned aerial vehicles in a “drones-for-fighters” deal with HTS. But there isn’t any independent evidence to back this Russian claim.

Russia clearly was surprised by HTS’s rapid advance on Damascus — but interestingly, Russian sources have tried to minimize the Ukrainian role. A Dec. 2 article in Middle East Eye quoted a Russian Telegram account, said to reflect the views of the Russian military, that discounted Kyiv’s assistance: “Firstly, GUR members did visit Idlib, but they stayed there for only a short time” — not enough to train Syrians to operate unmanned aerial vehicles (UAV) from scratch. “Secondly,” the message continued, “HTS has long had its own UAV program.”

The Syria operation isn’t the only instance of Ukrainian military intelligence operating abroad to harass Russian operatives. The BBC reported in August that Ukraine had helped rebels in northern Mali ambush Russian mercenaries from the Wagner Group. The July 27 attack killed 84 Wagner operatives and 47 Malians, the BBC said.

Andriy Yusov, a GUR spokesman, touted the Mali operation several days later, saying that the Malian rebels “received necessary information, and not just information, which enabled a successful military operation against Russian war criminals,” according to the BBC. After the attack, Mali severed its diplomatic relations with Ukraine.

Budanov pledged in April 2023 that Ukraine would pursue Russians guilty of war crimes “in any part of the world,” according to a news report. Budanov’s aggressive intelligence operations have sometimes worried the Biden administration, U.S. officials have told me.

I asked Budanov in an interview at his headquarters in Kyiv last April about the GUR’s reported operations against the Wagner militia in Africa. “We conduct such operations aimed at reducing Russian military potential, anywhere where it’s possible,” he answered. “Why should Africa be an exception?”

Like Ukraine’s Africa forays and its assault on the Kursk region inside Russia, the covert operation in Syria reflects an attempt to widen the battlefield — and hurt the Russians in areas where they’re unprepared. Ukraine’s aid wasn’t “the drone that broke that camel’s back,” so to speak. But it helped, in at least a small way, to bring down Russia’s most important client in the Middle East.

And like Israel in its failure to anticipate Hamas’s surge across the Gaza fence on Oct. 7, 2023, Russia saw the Ukrainian-backed rebels coming, but couldn’t mobilize to stop the attack and prevent the devastating consequences.⍐