UN meeting highlights $4tn annual development finance gap

Developing countries face an estimated $4tn annual shortfall in financing for the Sustainable Development Goals, speakers at a joint United Nations meeting said, calling for action as debt costs and restricted access to affordable finance weigh on public spending. [1]

Amar Bendjama, president of the Economic and Social Council, said debt-service payments in developing countries reached a 20-year high in 2024. The 2026 Report on Financing for Sustainable Development puts net interest on public debt at almost $1tn in 2025 — nearly three times the 2010 level. [1]

Bendjama called for stronger debt management, greater transparency in borrowing and lending, debt-for-development swaps and more access to concessional finance. He said resources were not reaching countries and communities at the scale, speed or affordability required. [1]

Nancy Lee, of the Center for Global Development, proposed including clauses in public and private debt contracts that would temporarily suspend payments after major shocks. She said the clauses could provide rapid relief without triggering default. David Rogovic, of Moody’s Ratings, said a pause would not count as a default if it was written into the original contract and used according to its terms. He described the clauses as a tool for managing liquidity, not a solution to insolvency. [1]

Representatives of small island states said the terms on which finance is available are also a concern. Palau, speaking for the Alliance of Small Island States, called for expanded concessional finance and climate-resilient debt instruments. Fiji’s delegate urged that the multidimensional vulnerability index be used to determine eligibility for concessional financing. [1]

The meeting was convened by the UN General Assembly’s Second Committee and the Economic and Social Council. Speakers also called for the Sevilla Commitment on development financing to be put into action. [1]