These economies are now poorer than before the COVID-19 pandemic, while most other countries in the world have recovered and returned to growth, the report said.
The report, released ahead of the annual meetings of the World Bank and the International Monetary Fund (IMF) in Washington, highlights a major setback in poverty reduction efforts and underscores the World Bank’s goal of raising $100 billion to recapitalize the International Development Association (IDA), the fund for the poorest countries.
Afghan women evacuate after an earthquake in Herat, Afghanistan on October 10, 2023. Photo: Reuters
These economies, with per capita incomes below $1,145 a year, are increasingly reliant on aid and near-zero-interest IDA loans as market financing has dried up. Their average public debt-to-GDP ratio is 72 percent, an 18-year high, and half of them are at risk of high debt or debt crises.
The majority of the countries studied are in sub-Saharan Africa, from Ethiopia to Chad and the Congo, with Afghanistan and Yemen also included. Two-thirds of these countries are in a state of armed conflict or struggle to maintain order due to institutional and social weaknesses that discourage foreign investment. Most of these countries are dependent on commodity exports, making them vulnerable to cycles of economic boom and bust.
“While much of the world has turned its back on the poorest countries, IDA has been their lifeline,” said World Bank chief economist Indermit Gill. “Over the past five years, IDA has channeled most of its financial resources to 26 low-income economies, helping them weather the historic shocks they have suffered.”
IDA is typically replenished every three years by the World Bank’s shareholder countries. In 2021, the fund raised $93 billion, and World Bank President Ajay Banga is aiming to surpass that figure, raising more than $100 billion in commitments by December 6.
Natural disasters have also taken a greater toll on these countries over the past decade. Between 2011 and 2023, natural disasters caused an average annual loss equivalent to 2% of GDP, five times the average in lower-middle-income countries, highlighting the need for greater investments in disaster preparedness.
The report also recommends that these countries do more to help themselves, including improving tax collection through simplifying tax registration and administration, as well as improving the efficiency of public spending.
Cao Phong (according to Reuters, AFP)
Source: https://www.congluan.vn/ngan-hang-the-gioi-tinh-tinh-tai-chinh-26-quoc-gia-ngheo-nhat-ngay-cang-xau-di-post316684.html
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