Malaysia must avoid debt trap squeezing education spending, Anwar warns

Prime Minister Anwar Ibrahim has raised alarm over the fiscal pressures facing developing economies, warning that nations must not allow themselves to be caught between mounting debt obligations and the needs of their citizens.

Anwar pointed to a troubling global pattern where some developing countries allocate larger portions of their budgets to servicing debt interest than to education spending. The disparity underscores the challenge facing policymakers attempting to balance fiscal responsibility with social investment.

The prime minister's comments reflect growing concerns about the sustainability of public finances in the region, where many nations have taken on significant debt to fund infrastructure and pandemic-related stimulus measures.

Anwar's warning comes as Malaysia continues to grapple with its own fiscal challenges. The government has been working to stabilise its debt-to-GDP ratio while maintaining spending on essential services including healthcare and education.

Experts have cautioned that prioritising debt payments over human capital development could undermine long-term economic competitiveness and social stability in developing nations.