What's Happening?
A report by UNESCO reveals that most developing countries are spending more on repaying foreign debt than on education. In 2025, 113 developing countries allocated more funds to debt servicing than to education, with some spending up to 16 times more on debt.
This situation is exacerbated by aid cuts from the U.S. and Europe, which have reduced education funding by $600 million in 2024. The redirection of public spending to debt servicing has disrupted education systems, leading to insufficient funds for schools and unpaid teachers. The report highlights the long-term impact of weakened education systems on economic development and debt management.
Why It's Important?
The prioritization of debt repayments over education funding poses significant challenges for developing countries. Education is a critical driver of economic growth and development, and underfunded education systems can hinder a country's ability to improve its economic standing and manage debt effectively. The reduction in aid from major donors like the U.S. and Europe further compounds the issue, potentially leading to a cycle of austerity and underinvestment. This situation could have broader implications for global economic stability and development, as countries struggle to balance debt obligations with essential public services.
What's Next?
To address the crisis, there is a need for a shift in how debt relief is structured, moving towards long-term solutions that allow countries to maintain funding for public services. Advocacy groups are calling for changes in debt-relief processes, including more debt cancellation and faster procedures. The UK, holding the G20 presidency in 2027, is urged to lead efforts in reforming debt-relief mechanisms, ensuring private creditors cannot disrupt agreements. These changes could help developing countries stabilize their economies and invest in critical sectors like education, ultimately supporting sustainable development.
