Egyptian Presidential Economic Advisor Hala El-Said.
Speaking at the fifth edition of Al Baraka Regional Forum Conference, held in Cairo, El-Said warned that annual financing gaps for developing economies now range between $2.5 trillion and $4 trillion, describing the trend as “deeply concerning” in light of successive global shocks.
The conference kicked off earlier Tuesday in Cairo under the title “Islamic Finance and Sustainable Economy: Innovations for Financing Development and Addressing Debt Crises.”
Held in strategic partnership with the League of Arab States, the fifth edition of Al Baraka Regional Forum brings together a high-level gathering of Arab ministers, central bank governors, and international economic experts to explore innovative, sustainability-compliant financing solutions amid mounting global debt challenges.
El-Said stressed that addressing these challenges requires a multi-track strategy, starting with raising the efficiency of public spending through better management of available resources, alongside the adoption of innovative, non-traditional financing tools to ease mounting fiscal pressures.
She also underlined the central role of the private sector as a key partner in development, particularly in infrastructure and other vital sectors, noting that public resources alone are no longer sufficient to meet growing development needs.
Meanwhile, Mahmoud Mohieldin, the UN Secretary-General’s Special Envoy for Financing the 2030 Agenda for Sustainable Development, said that net foreign direct investment in developing countries currently represents just 2–3 percent of GDP, down sharply from five percent in 2008.
Mohieldin noted that net capital flows to developing economies have remained negative for three consecutive years, meaning that outflows, driven by debt servicing and capital flight, have exceeded inflows.
He warned of a continued decline in development- and infrastructure-related investment, revealing that development-linked financing indicators fell by seven percent last year, with projections pointing to a further drop of 15–20 percent in 2025, threatening global sustainable development efforts.
In its latest Financial Stability Report, released in October, the International Monetary Fund (IMF) revealed that the government debt in emerging market and developing economies has surged to approximately $30 trillion. Excluding China, the figure stands at $12 trillion.
Meanwhile, developing countries paid $741 billion more in principal and interest on their external debt than they received in new financing between 2022 and 2024, the largest gap in at least five decades, according to the World Bank’s International Debt Report issued in December.
Developing countries restructured $90 billion in external debt in 2024, the highest level since 2010.
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