BANGKOK -- Rising debt service costs are squeezing developing countries' ability to invest in growth, a senior official at the Rockefeller Foundation told Nikkei, calling for better coordination with creditors to prevent new financing from being swallowed up by debt repayments.

The U.S. philanthropic organization, which provides grants worldwide, pointed out in its report released in October that about 40 low- and lower-middle-income countries globally, including those in Asia, face heavy debt service burdens that have left them short of funds for growth-enhancing investment.

"They're paying incredibly high amounts of interest on their debt," said Christina Segal-Knowles, the foundation's managing director for international policy, in an interview with Nikkei. "That is squeezing out the space for investment. And that means that they don't have enough space for investment to get back to growth." She was speaking on the sidelines of the International Monetary Fund and World Bank annual meetings in Bangkok in mid-October, where the impact of higher bond yields in advanced economies was among the key topics.

The Rockefeller report warned that the debt situation in developing countries could worsen.

"Without urgent action, this will get worse: a wall of Covid-era, low-cost external borrowing is coming due just as borrowing costs have skyrocketed," the report said. "Particularly with advanced economy borrowing rates above five percent, many developing countries face a stark choice: make further sharp cuts to spending at significant cost to growth and human lives, or finance government deficits and amortizations via exorbitant private borrowing that is likely to lead to eventual default."

Segal-Knowles said many countries could restore sustainable debt levels through economic growth. But without affordable financing, such as low-rate loans, and other support, they could be forced into debt restructuring, she warned.

International institutions "are not providing enough to bring countries not just to the point where [developing countries] can get through the crisis ahead of them but to fully recover and rebuild their resilience," Segal-Knowles said.

New financing in developing countries should be "coordinated with creditors," she said, so that the funds could support economic recovery rather than flow back out through debt repayments.

Segal-Knowles also added that international assistance needs to be tied more closely to developing countries' investment and economic recovery plans.

"There hasn't been a really comprehensive plan that brings that money together behind an actual plan for investment and a country-led plan for recovery," she said.