A recent report by the World Bank has shed light on a concerning trend affecting half of the world's 75 poorest countries. For the first time in this century, these nations are experiencing a widening income gap with the wealthiest economies, marking a significant reversal in development progress.
The report reveals that over the past five years, the per capita income growth in the poorest countries has lagged behind that of the richest nations, leading to a troubling lack of convergence. This trend has resulted in these countries becoming poorer, indicating a serious structural regression in global development.
The 75 countries identified in the report, eligible for support from the World Bank's International Development Association (IDA), are at risk of facing a lost decade of development unless bold policy changes and substantial international aid are implemented.
Factors contributing to this economic downturn include pre-existing growth slowdowns, exacerbated by events such as the COVID-19 pandemic, Russia's invasion of Ukraine, climate change impacts, and rising violence and conflict in these regions.
Despite possessing youthful populations, abundant natural resources, and renewable energy potential, many of these countries are grappling with debt distress, food insecurity, and limited access to financial support from creditors.
The report emphasizes the urgent need for ambitious policies to stimulate investment, strengthen fiscal and monetary frameworks, implement structural reforms in education and revenue generation, and enhance international cooperation on climate action, debt restructuring, and trade facilitation.
Highlighting success stories of countries like China, India, and South Korea that have overcome extreme poverty, the World Bank underscores the importance of not neglecting the plight of IDA countries and calls for robust replenishment of IDA funds by the end of the year.
