Debt crisis undermines education, healthcare and climate resilience in Developing Nations: Jubilee report

A Vatican-backed global commission has issued a stark warning that mounting external debt is suffocating the ability of developing nations to invest in critical public services, including education, healthcare, and climate resilience. The report, released on Saturday as part of the Jubilee Year 2025 initiative, calls for sweeping reforms to tackle the global debt crisis.

The Jubilee Commission, co-chaired by Nobel laureate economist Joseph Stiglitz and former Argentine finance minister Martín Guzmán, includes over 30 leading international experts. It was originally formed at the request of the late Pope Francis and continues its work under the leadership of Pope Leo.

Published from Vatican City, the report reveals that 54 countries spent more than 10% of their tax revenues on interest payments in 2023, with debt burdens rising over 50% since 2015. The findings underscore how unsustainable debt is obstructing development in the Global South.

“Increasing debt is squeezing out spending on health, education, and climate adaptation,” the commission notes. “Political will and global cooperation are urgently needed to reverse course.”

Bangladesh: A case in point

Speaking to the crisis in Bangladesh, Professor Suborna Barua from the University of Dhaka’s Department of International Business warned that the national debt has reached alarming levels — amounting to 50–60% of per capita income. “Foreign debt in the climate sector alone accounts for 13%,” he said, adding that foreign currency reserves are being drained to service these debts, triggering cuts in essential sectors.

“A Crisis the world cannot ignore”

Joseph Stiglitz warned that current debt policies prioritize “financial markets over people,” potentially leading to a “lost decade.” Martín Guzmán added, “More than 3.3 billion people live in countries where debt repayments exceed healthcare spending, and another 2.1 billion in countries where education is being crowded out by debt servicing.”

“These nations may not be defaulting on their debt,” Guzmán said, “but they are defaulting on development.”

A Seven-Point blueprint for debt justice

The commission proposes seven urgent reforms to restructure global debt systems and support development:

1. Reverse net negative financial flows so countries receive more than they repay.
2. End bailouts for reckless lenders—IMF and others must stop rescuing private creditors.
3. Enable meaningful debt restructuring with actual reductions in principal owed.
4. Extend loan maturities to 20 years or more to ease financial pressure.
5. Reform IMF lending practices to ensure equity and prevent political bias.
6. Support vulnerable middle-income nations, not just the poorest.
7. Guarantee full transparency and accountability in all sovereign loan deals.

As the world enters the Jubilee Year, the report urges immediate global cooperation to prevent an emerging development catastrophe — and calls on international institutions to choose people over profit.