The Human Rights Consequences of Pricing Developing Countries Out of Global Finance.

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On March 30,  2026, the United Nations (UN) delivered an important remark regarding Developing Countries, which are being excluded from access to affordable finance, essential for sustainable development, as sovereign credit ratings frequently exaggerate risks and fail to recognise their long-term economic prospects. While many crises compete for international attention, few are as quietly devastating as the financial suffocation now affecting large parts of the Global South. The scale of exclusion, the depth of economic strain, and the direct impact on people’s lives combine to form a structural emergency with discerning human rights consequences.

The UN, yet again, argues that one of the main reasons is that the credit ratings given to these countries often make them look riskier than they really are. Because the credit rating is a score that suggests to investors how risky it is to lend money to a government and how likely they are to repay their debt, and as such this score hardly shapes a country’s ability to access needed funds. If the score is low, investors demand higher interest rates, making borrowing more expensive. Sometimes so expensive that these countries simply cannot afford it, undermining their ability to uphold their development projects and human rights.

The UN’s Deputy Secretary-General Amina Mohammed, explains that the current rating system relies too heavily on old or incomplete information. For this reason, many developing countries are judged unfairly. They end up paying far more to borrow money than developed countries, even when their economic situation is improving or when they are making responsible financial decisions, and the consequences are severe. Developing countries now spend around 1.4 trillion dollars every year just to service their existing debt. Meaning that they pay interests instead of directing those assets towards building and sustaining hospitals, schools or their climate protection agenda. In fact, more than three billion people live in countries that spend more on interest payments than on health or education. This is a striking illustration of how debt costs can directly undermine people’s well-being and their rights.

Furthermore, global instability has made the situation worse. Conflicts, rising fuel prices and economic uncertainty all increase pressure on developing countries, especially those already burdened by high debt and fragile fiscal positions. Climate-vulnerable countries face repeated disasters but cannot access affordable finance to rebuild, trapping them in a cycle where they are constantly paying for past crises instead of preparing for future ones. 

The UN claims that this is not just a technical issue but as well a matter of global fairness. If credit ratings exaggerate risk or rely on outdated information, then countries are being judged by standards that do not reflect their real situation. This creates a form of structural discrimination in global finance. Therefore this argument links the debate on credit ratings to wider efforts to reform the global debt system, which is needed in order to give developing countries more influence in discussions about how debt is managed and how lending rules are set. Efforts to rebalance the system include creating a platform where borrower countries can coordinate and articulate shared standards for responsible lending and borrowing, while also supporting new institutions such as the planned African Credit Rating Agency. Such initiatives matter because current rating practices often rely on subjective judgements that leave great room for bias, contributing to the persistent gap between developed and developing countries. By generating assessments grounded in better data and a fuller understanding of local realities, and by strengthening transparency and domestic institutions, developing countries can reduce reliance on external ratings and challenge the structural disadvantages embedded in the global financial architecture.

The UN’s Deputy Secretary-General calls for a complete reassessment of how credit ratings are designed. Amina Mohammed urges that ratings should not only focus on a country's weaknesses but also on its potential. She argues that the mindset needs to shift from short-term speculation to long-term investment. Thus, instead of pushing away countries for being vulnerable, the institutional system should recognise that investing in development: health, education, infrastructure and renewable energy as this actually makes countries more stable and more capable to repay debts in the future. Therefore, long-term supporting developing countries will actually reduce their financial vulnerability and improve their credit score. Last but not least criticism goes towards the narrow use of GDP as the main measure of progress, as according to Mohammed, the GDP captures the cost of everything but the value of very little. In other words, it measures costs and transactions without revealing whether what is produced actually improves people’s lives.

Ultimately, greater transparency, stronger data and clearer accountability from governments, investors and rating agencies are essential if credit ratings are to support rather than undermine human rights. Until these reforms take hold, millions will continue to bear the human cost of a financial system that misjudges their countries, restricts their opportunities and reinforces global inequality. 

written by Antonina Axenti