Bangladesh, a country grappling with an increasing external debt burden, is owed a staggering $5.8 trillion in climate debt by rich, high-polluting nations, according to a report by ActionAid released this month.

The report, titled "Who Owes Who?", highlights the urgent need for debt cancellation and global financial justice.

Based on historic and projected atmospheric appropriation using low-range estimates since 1992, wealthy nations owe Bangladesh $5.8 trillion in climate debt, the report said.

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It also underscored the stark imbalance between the debts that low- and lower-middle-income countries owe and the obligations that high-income countries continue to evade.

The report said that as we enter 2025, 54 countries are in a debt crisis and are being forced to cut spending on basic public services and climate action in order to pay external debts.

Bangladesh, whose external public sector debt stood at $84.44 billion as of September 2024, made debt repayments totalling $4.77 billion to its creditors in 2023.

The country on the Bay of Bengal, one of the most vulnerable to climate change, has to divert its resources towards debt repayment rather than essential public services, while wealthier nations fail to meet their own financial obligations relating to climate justice and reparations.

In 2024, Bangladesh spent 16.9 per cent of its national revenue on external debt repayments, while only 3.08 per cent was allocated to health and 11.73 per cent to education.

"Bangladesh needs debt cancellation and freedom from colonial debt structures to address both the debt crisis and climate change," ActionAid Bangladesh Country Director Farah Kabir said.

The new report highlights the debt burden of low- and lower-middle-income countries versus the financial obligations of rich nations regarding climate damages, compensations, and unmet commitments, she added.

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The Global South, which broadly represents countries mostly in Latin America, Asia, Africa, and Oceania, must secure debt cancellation and push for the establishment of a new UN Framework Convention on debt this year.

She emphasised the impact of the climate crisis, especially on women and girls.

"We have seen time and again how women are at the forefront of the climate crisis. The failure by the rich polluting countries to pay their climate debt is standing in the way of mitigation and adaptation."

The ActionAid report said that lower-income countries collectively paid $138 billion just to service their debts last year, sacrificing health, education, people's rights, and sustainable national development to satisfy wealthy creditors.

It said that, based on the most systematic studies, the climate debt that rich polluting countries owe low- and lower-middle-income countries is $107 trillion.

This is more than 70 times greater than the total external debt of $1.45 trillion that these countries collectively owe.

The report urges global leaders to unite in demanding debt cancellation as part of payment of the climate debt and other reparations owed by high-income countries.

"As Bangladesh and other vulnerable nations continue to struggle under the weight of an unjust financial system, the findings of this report reinforce the need for urgent global action to address both debt injustice and the climate crisis."