Debt crisis hits women hardest as global instability deepens, UN warns

Women in developing countries are bearing the brunt of rising government debt, with millions losing jobs and incomes as public spending is squeezed — a crisis set to worsen amid ongoing instability in the Middle East, according to new UN research.

A report by the United Nations Development Programme (UNDP), based on data from 85 countries over three decades, finds that women are disproportionately affected when debt burdens surge and governments are forced to cut spending, The Guardian writes.

As states divert resources to service growing debts, sectors such as education and care — where women make up a large share of the workforce — are often hit first. This not only leads to job losses but also increases unpaid care responsibilities as public services are reduced.

UNDP administrator Alexander De Croo said the findings highlight the risks governments face when making fiscal decisions during periods of economic strain.

“In a moment like this, due to the instability in the world, but definitely induced by what is happening in the Gulf region, you see that governments are even more pressed to make choices,” he said.

“What we really want to point to in this report is that, look, when you make those choices as governments, please be careful: if you reduce your social spending, you should know that big chunk of social spending is going to women, and a bigger part of the employment that social spending is going to – it’s going to women.”

Even before the escalation of the US-Israel war on Iran, 56 countries were already allocating more than 10% of their revenues to debt servicing, De Croo noted. Rising costs for energy and fertilisers, alongside higher global interest rates linked to the conflict, are expected to intensify the pressure.

The report reveals that debt-servicing burdens in the surveyed countries nearly doubled between the early 2010s and 2022. This increase is estimated to have resulted in the loss of 22 million women’s jobs in the short term and more than 38 million in the long term.

It also found that shifting from a moderate to a high debt burden — measured against exports — leads to an average 17% decline in women’s income per capita, while men’s income remains largely unchanged. Life expectancy declines for both genders under such conditions.

The findings come as the international community continues to push toward achieving the United Nations’s sustainable development goals, including gender equality.

De Croo suggested that creditor nations could play a role by linking debt relief to protections for social spending.

“Helping women to have an income, to have a job, has a very high development outcome, and it actually has a higher development outcome than providing men with an income,” he said. “The countries providing loans can go into that logic and say: ‘Let’s have a discussion on making sure how you actually preserve your path towards prosperity and towards repaying those debts.’”

The report underscores how external shocks are compounding vulnerabilities across developing economies. Rising oil, gas and fertiliser prices are straining budgets, while cuts to overseas aid — including from the United Kingdom — have further limited financial support.

The International Monetary Fund has also warned that developing countries are increasingly exposed to interest rate hikes and currency volatility, partly due to the growing role of private lenders such as hedge funds.

Echoing those concerns, the UNDP report highlights how currency instability can worsen debt pressures, creating a cycle of economic strain.

By Sabina Mammadli