It is 2025, and the architecture of economic power remains grossly tilted against the nations of the global south. Nowhere is this imbalance more acute – and more enduring – than in the debilitating impact of sovereign debt.
From the vast countries of Africa to the scattered but strategically vital small island developing states (Sids) of the Caribbean and the Pacific, debt has become a modern form of bondage – the chains that restrict growth, sovereignty and the basic human dignity of nations struggling to define their own path to development.
The statistics tell an alarming story. By the start of 2024 developing countries’ public debt reached approximately $29tn (£21.2tn), rising from 16% of global debt in 2010 to nearly 30%. This escalation was fuelled by a convergence of a global pandemic and rising costs internationally. Today, average borrowing costs in Africa are almost 10 times higher than for the US. Why? International credit rating agencies will point at risk in Africa but this is perception, and a myth, not reality. Africa has consistently been the least risky continent for returns on the dollar when compared worldwide. But nevertheless, the impact is profoundly immoral as global south countries face prioritising debt servicing over essentials. One-third of these fragile countries have to allocate more to servicing interest – as much as 14% of domestic revenue – than to healthcare, education or climate resilience.
For decades, these countries have been trapped in a cycle of borrowing to survive and repaying to remain “credible” in the eyes of the international financial order. But the terms of this credibility have always been set elsewhere – primarily in western capitals, behind the closed doors of international financial institutions. These institutions, under the guise of technical neutrality, have in fact driven economic ideologies that have crippled the same countries they claim to help.
As a young economics student in the 1980s, it was made clear to me that the true path was Thatcherism and Reaganomics, elevated to near-religious orthodoxy, both rooted in neoliberalism. Developing countries were told to liberalise, privatise and deregulate. Structural adjustment programmes (SAPs), driven by IMF and World Bank conditionalities, imposed austerity measures that gutted public services and sacrificed the welfare of millions on the altar of fiscal discipline.
Healthcare systems collapsed. Schools were closed. Public sector wages were frozen and trade unions deemed to be evil. And yet, we were told to believe this was “development”. In truth, this was not development but dependency.
During the 1980s and 1990s, in Jamaica, Guyana and Trinidad and Tobago, these policies led not to prosperity but to deepening poverty, growing inequality and social unrest. In the Caribbean alone, SAPs contributed to lost decades of growth, political upheaval, and widespread disillusionment with the promise of independence. More than a few governments were ousted as a result of electoral backlash against IMF-imposed hardship.
Foreign aid – so often touted as a benevolent solution – has played a double-edged role. Far from empowering states, it has often eroded their autonomy. Much of the aid has come with heavy strings attached: contracts that must go to western contractors; conditions that require the opening of markets before local industries are ready; and monitoring mechanisms that diminish sovereign decision-making. No wonder so many African leaders prefer the Chinese offers of lending.
The result has been a facade of support, what the great activists Frantz Fanon or Kwame Ture, might have called a “pitiful mimicry” of development – where countries are forced to pursue western-centric models of skyscrapers, luxury seafront resorts denying locals access to their beaches, and white elephant vanity projects destroying the environment, while their people continue to lack access to clean water, reliable electricity, or functioning hospitals.
Development, at its core, should be about expanding the freedoms and capabilities of people. It should mean children can attend school without hunger. That mothers can give birth in safe conditions. That farmers can bring their goods to market on decent roads. That communities can trade, access clean water, and benefit from the natural resources of their lands without being poisoned by extraction.
But the dominant model of development, dictated by external creditors and investors, has misconstrued these priorities. In its place, we see the proliferation of unsustainable debt-financed projects, many of which serve elite interests or foreign investors rather than local communities.
Loans from the IMF and World Bank have frequently funded projects that do little to enhance long-term national resilience or productivity. And these loans, compounded by high interest rates and currency volatility, are serviced partially – through austerity and further borrowing – but rarely repaid. This is by design. Debt, in this system, is not a tool for development but a mechanism of control.
Across the global south, the story is much the same. Multinational corporations, often operating with generous tax concessions and little oversight, engage in resource extraction that depletes environments and communities. They argue that their share of profits is justified by their investment in infrastructure and innovation. Yet these same companies contribute disproportionately to environmental degradation – through oil spills, deforestation, over-mining and pollution – without being fairly taxed or held accountable.
One-sided trade agreements perpetuate this imbalance. The rules of global commerce, whether in mining, agriculture or tourism, are rigged in favour of the north. Risk assessments by international credit rating agencies, often influenced by outdated or racist perceptions, and opaque and biased criteria, further discourage equitable investment in the south. These assessments have more to do with where a country is located than with its actual economic potential or fiscal responsibility.
Meanwhile, the brain drain continues. The brightest young minds of Africa, the Caribbean and the Pacific are drawn to wealthier countries in search of opportunity denied at home, leaving behind hollowed-out institutions and leadership vacuums. Local education systems produce excellence, only for it to be exported.
The voices of our nations are also muted on the global stage. Despite holding the majority of the world’s population, the global south holds a minority of voting power in institutions such as the UN. Decisions that affect our future are made without our meaningful participation but with token theatre.
The UN holds its future of development financing conference in Seville, Spain, next week, it should be a moment for honest discussion on how the world can come together to support sustainable development, but already the US and the UK have blocked action on tackling the unfair burden of debt.
When disasters strike – whether hurricanes, earthquakes, or the slow violence of the climate crisis – the burden of recovery falls overwhelmingly on us. The loss and damage fund, formally established at Cop27 in 2022 and only put into operation in 2024, has been long championed by vulnerable nations but still remains underfunded and under-prioritised. Yet for many Sids, the climate emergency is not a future threat – it is a catastrophe now. Shorelines are disappearing. Coral reefs are dying. Agriculture is failing. Lives are being lost.
It is long past time for a reckoning. The economic architecture that dominates global development discourse has failed. It has failed the poor. It has failed the planet. And it has failed the very ideals of justice and solidarity upon which the post-second world war international system was supposedly built.
We need more than tinkering at the margins. We need more than an extravagant conference in Seville can deliver. We need debt forgiveness – not as a charity, but as a historical rectification. We need concessional financing with reduced interest rates and transparent, fair assessments of investment risk. We need climate reparations through robust, predictable and progressive loss and damage funds. In times of force majeure, we need aid that empowers, not aid that entraps.
Most of all, we need the freedom to define development on our own terms – rooted in equity, sustainability and sovereignty.
Until these structural injustices are addressed, the global south may remain poor not because of a lack of potential or ambition, but because the rules of the game were never written for our success.
