The Global South is being forced to choose creditors over children

Published 25 July 2026 · world

The education of hundreds of millions of children is at risk because of the current global financial order. We need change The world claims to

The education of hundreds of millions of children is at risk because of the current global financial order. We need change The world claims to regard education as a universal right. Its financial system tells a different story. ⁠New figures released by UNESCO show that 113 countries with a total population of 6.1 billion now spend more on servicing debt than educating their people. In low-income countries, debt payments are nearly four times education expenditure. In 18 of the most heavily indebted countries, governments spend at least five times more on debt than on education. These are not merely signs of strained public finances. They reveal a stark political hierarchy. Creditors possess enforceable claims on government revenues. Children possess declarations, development goals and promises. When the two collide, creditors are paid first. The consequences are visible in overcrowded classrooms, deteriorating school buildings, teacher shortages, unaffordable school fees and children leaving education prematurely. Yet these outcomes are generally described as funding gaps or failures of domestic governance, as though governments had freely decided to neglect their schools. In reality, many governments are operating inside an international financial order that sharply restricts what they can choose. The ⁠World Bank reports that developing countries transferred $741bn more to external creditors in principal and interest between 2022 and 2024 than they received in new financing. This was the largest net debt outflow in at least 50 years.

In 2024 alone, low and middle-income countries paid a record $415bn in interest. In other words, the financial flows are frequently moving in the opposite direction from the one suggested by the language of development assistance. Poorer countries are commonly portrayed as beneficiaries of Western generosity. But vast amounts of public wealth are travelling from debtor countries to bondholders, commercial banks, multilateral institutions and wealthier creditor governments. Money that could hire teachers, provide school meals or build classrooms is instead leaving the country. This is particularly perverse because education is not simply another item of government consumption. It is an investment in a society’s future capacities. Cutting it may make debt payments easier today, but it will weaken productivity, public revenues and social resilience tomorrow. Debt contracts are treated as binding obligations whose breach can trigger credit downgrades, capital flight, lawsuits and exclusion from financial markets. The right to education, by contrast, carries no comparable machinery of enforcement. No ratings agency downgrades creditors when a country cannot afford enough teachers. No financial penalty is imposed on bondholders when debt service forces children out of school. Markets do not panic when classrooms collapse. The system disciplines governments for failing creditors, not for failing children. UNESCO has proposed expanding debt-for-education swaps. Under these arrangements, a creditor cancels or restructures part of a country’s debt in exchange for government investment in agreed educational programmes.