Blighted by the effects of global heating, beset by food insecurity and rising poverty, and hobbled by dollar-denominated debt that leaves no fiscal room for manoeuvre, some of the world’s poorest nations are enduring a perfect storm. In the wake of Covid and then the war in Ukraine, inflation and high interest rates have tipped many over the edge: between 2020 and 2023 there were 18 sovereign defaults in 10 developing countries – more than in the previous two decades. Others are either in debt distress or close to it.
As the World Bank and the International Monetary Fund hold their annual spring meetings in Washington this week, this dismal state of affairs should be at the top of delegates’ agendas. Prior to the pandemic, the 2020s had been earmarked as a transformative decade – one in which developing nations would make vital progress towards climate targets and eliminating extreme poverty and hunger. Instead, due to events beyond those countries’ control, there has been what a World Bank report this week described as a “great reversal”. In countries classified as eligible for grants and loans from the bank’s International Development Association (IDA), a quarter of the population is now surviving on less than $2.15 a day – the global definition of poverty.
