A World Where "Repayment Takes Priority Over Aid": Who is Turning the Debt Crisis of Developing Countries into "Business"?

1) “What Remains After the Flood is the Bill”—How the Climate Crisis Accelerates the Debt Crisis

Droughts, floods, cyclones. In countries where climate disasters occur frequently, the fiscal burden grows due to recovery costs, subsidies for food and fuel, and rebuilding healthcare systems. Meanwhile, repayments on foreign currency-denominated debts cannot be postponed. As the local currency depreciates, the burden of repaying the same dollar-denominated debt increases when viewed in local currency terms. This creates a cycle of "disaster → fiscal deterioration → additional borrowing → increased repayment burden → postponement of public investment." The Independent

The United Nations Conference on Trade and Development (UNCTAD) points out that interest payments in developing countries are rapidly increasing, and approximately 3.4 billion people live in countries where "interest payments exceed spending on health and education." The structure where future investments are cut to make repayments is clear even in statistics. UN Trade and Development (UNCTAD)

2) Who Profits and Who Cuts Back—Private Money Gaining "Crisis Dividends"

A new analysis obtained by the British newspaper The Independent from Christian Aid and Debt Justice suggests that creditors could potentially gain profits totaling around $60 billion from government bonds and other instruments in countries deepening in debt crisis. The focus is on 15 countries under severe debt stress, with funds managed by BlackRock estimated to gain approximately $2.1 billion, Goldman Sachs approximately $0.9 billion, and JP Morgan approximately $0.7 billion. The Independent

What is important here is that it's not just "the banks that lent are collecting directly." The analysis focuses on funds managed by asset managers, behind which lie "customer funds" such as pensions and individual investors. BlackRock states, "We are investing primarily the money of ordinary people saving for retirement, and we act in their best interest as a fiduciary responsibility." The Independent

However, Debt Justice argues, "If they claim they cannot voluntarily reduce debts due to fiduciary responsibility, they should support legal reforms to apply the same rules to all private creditors." Essentially, they are advocating for a system to eliminate the structure that allows "free-riding." The Independent

3) The Pitfalls of the "China as the Largest Lender" Myth—The Reality of Repayment Destinations

When debt issues are reported, "China lent too much" often comes to the forefront. However, Debt Justice, based on World Bank data, clarifies that of the external debt repayments by 88 low- to middle-income countries from 2020 to 2025, **39% is to private creditors (excluding China), while 13% is to China**. Moreover, during the COVID-19 period (2020–21), China offered repayment deferrals, whereas private creditors were reluctant to grant comprehensive deferrals, resulting in continued payments to private creditors. Debt Justice

The Independent similarly introduces the structure of developing country debt holdings as **39% private, 34% multilateral like the World Bank/IMF, 13% China, and 14% other governments**. The more the discussion is simplified, the less visible the presence of private debt becomes. The Independent

4) "What Could Have Been Done with the Same Amount"—Repayments Consuming Climate Measures

A symbolic moment is when the repayment amount and the estimated cost of climate measures are shown to be "almost the same." A report by Christian Aid points out that Nigeria is expected to pay $13 billion to private external creditors from 2025 to 2030, a scale comparable to the investment required for its climate strategy. Christian Aid

Furthermore, the report estimates that BlackRock and its clients could achieve an average return 64% higher from investments in 15 countries under debt stress, touching on estimated profit rates from bonds in countries like Angola, Egypt, Nigeria, and Kenya. While the estimates have assumptions, the causal direction of "the more repayments are prioritized, the more delayed the investment in measures" aligns with on-the-ground perceptions. Christian Aid

5) Why is Debt Relief Not Progressing?—Systemic Failures and the "Litigation Card"

The G20's "Common Framework" exists as a framework for debt relief. However, according to reports, among the four countries that applied, none have reached a "write-off" of the principal amount, leaving a high repayment burden. The Independent

When private creditors are involved, negotiations tend to become more difficult. If a creditor unwilling to negotiate hints at litigation, the government may want to buy time by paying "those who agree" first. The Independent mentions criticism that Glencore obstructed negotiations in Chad as an example (the relevant SNS post is linked in the main text). The Independent

The CEO of Christian Aid also highlights the case where South Sudan was sued by private creditors in the UK High Court, pointing out the distortion where "the more frontline countries lose funds." Christian Aid

6) Why London Becomes the "Key"—UK Law and Private Credit Rules

This issue is tied to UK politics because many international bond contracts are based on **UK law (or NY law)**. Debt Justice, in another case (Zambian bonds), clarifies that most international bond contracts are under UK or NY law. Debt Justice

The report by Christian Aid and Debt Justice argues that, considering many private creditors operate under UK law, passing the "Debt Relief (Developing Countries) Bill" in the UK could encourage private creditor participation and free up resources for crisis countries. Christian Aid

7) Reactions on Social Media—Diverging Points Beyond "Ethics"

The points of discussion appear to be divided into three main categories on social media (※ the following are "observation points" based on some public posts and do not represent the entirety).

(1) Anger at "Profiting from Crisis" (Condemnation Type)
Debt Justice has previously called for a "social media blast" on Instagram and X, using Zambian bonds as an example, stating that "BlackRock could gain up to 110% profit," linking the posts to cuts in social services like healthcare and education, with a strong moral framing of "this is not right." Debt Justice

(2) Visualizing "Climate × Debt" with Numbers (Sharing/Explaining Type)
On LinkedIn, a post is spreading that Kenya is expected to pay around $7 billion to private external creditors by 2030, and this amount is comparable to renewable energy investments (electrification of rural households). The short text showing "what could be done with the same amount" makes it easy to share. LinkedIn

(3) "Without Changing the System, It Will Repeat" Design Theory (Policy Type/Skeptical Type)
Meanwhile, in the comments section, skepticism about aid models, such as "aid can strengthen the corrupt middle class locally and distort social development," and proposals on how to mobilize private capital are visible. The discussion does not stop at "investors are bad," but moves towards transparency in the flow of funds, local implementation capabilities, and governance. LinkedIn

8) What Will Become the Focus from Now On—Not Just "Debt Relief" but "Rules" and "Resources"

The points of discussion are largely twofold. First, how to ensure the effectiveness of debt relief. As long as private creditors do not "voluntarily" participate, systems like the common framework tend to spin their wheels. Second, how to create "new resources" for climate finance. The Christian Aid report advocates for resource proposals including excess profit taxes and financial transaction taxes as "polluter pays" and legal systems involving private creditors in parallel. Christian Aid

As statistics show, in many countries, the situation where "interest payments exceed spending on healthcare and education" has already arisen. If climate disasters overlap with this, the fiscal impact could be nearly "irreparable." Debt was originally a means for growth. However, now it also becomes a blade that cuts the prerequisites for growth (human life, education, energy transition). UN Trade and Development (UNCTAD)