Debt & Gender Justice
Debt & Gender Justice
More than 3 billion people live in countries that spend more on interest payments than they do on health or education, and when public services decline, the care burden on households increases and women shoulder this cost. The following debt stories explore how gender justice and debt justice are inseparably intertwined.
Sri Lanka
by Asia Pacific Forum on Women, Law and Development (APWLD) and WeWomenLanka
Since defaulting on its external debt payments in 2022, Sri Lanka has been in a deep debt crisis. At the time of default, the country’s domestic external debt amounted to US$ 41.5 billion, with domestic debt totalling a further $42.1 billion . Of the former, up to 43 per cent was owed to private creditors. In 2021, before the default, Sri Lanka devoted more than half (57.3 per cent) of its government revenue annually on external debt service. This ratio has since been brought down to 25.6 per cent in 2025, due to a very harsh austerity programme and debt restructuring. However, the external debt burden remains too high. Estimates by erlassjahr.de indicate that the country will have to use an average of 22.9 per cent of government revenues for debt service payments in the years 2026- 2028. The debt restructuring didn’t deliver sufficient debt relief, private creditors ended up being paid around 21 per cent more than bilateral creditors, and the country hasn’t still resolved the debt crisis.
The IMF has played a central role in the current debt crisis. While necessary for advancing debt restructuring, the IMF programme imposed one of the sharpest and fastest fiscal adjustments ever - equal to nearly 8 per cent of GDP over three years. What was seen by some as a rapid way to stabilise the economy, was felt by many to be harsh and harmful austerity, including reduced public expenditure, public-sector wage cuts, energy subsidy removal without adequate safety nets, and regressive tax increases, all of which deepen hardship for ordinary people. This has led to increased cost of living. Sri Lanka’s public health expenditure went from 11.3 per cent of the government expenditure in 2021, prior to the debt default, to 6.3 per cent in 2023, once it was in a full blown debt crisis. When a government cannot afford to invest in public health, it is the most vulnerable, particularly women, who suffer and end up indebted to be able to pay for medical bills or basic access to food or housing.
The crisis that Sri Lanka is facing is also a climate, food and gender justice issue. The country relies on the apparel industry and its exports to access foreign currency in order to repay external debts. It's an industry where around 70 per cent of its workers are women with low wages who have to work long hours and don’t have access to social protection or proper public health systems.
In the aftermath of Cyclone Ditwah, civil society groups demanded urgent revision of the debt restructuring agreement, major debt reduction, an immediate standstill on debt servicing, and climate finance as grants rather than loans. They argue that IMF conditions perpetuate a debt-climate trap that weakens resilience and erodes social protections, while 6.3 million people face food insecurity. Women and girls are particularly impacted by these compounding crises. hey are among the first to be affected by shortages, inflation, care burdens and the collapse of livelihoods, as they act as “shock absorbers” of fiscal consolidation. When the state withdraws, unpaid care work expands inside households.