The report found that low-income countries are still poorer than before the coronavirus pandemic.
The world’s 26 poorest countries are more deeply in debt than at any time since 2006, making them increasingly vulnerable to natural disasters and other shocks, the World Bank said.
The Washington, D.C.-based lender said in a report released Sunday that even though the rest of the world has largely recovered, economic conditions in the poorest countries are now worse than they were before the COVID-19 pandemic. He also said that the situation is getting worse.
The combination of COVID-19 and the ensuing crisis caused per capita income to decline by an average of 14% from 2020 to 2024, according to the report.
To achieve key development goals, economies will need additional annual investment equivalent to 8% of gross domestic product (GDP) until 2030, twice the average annual investment of the past decade. The World Bank said.
However, despite the need for greater support, net official development assistance as a share of gross domestic product (GDP) has fallen sharply, dropping to 7% in 2022, the lowest level in 21 years. The book said.
Indermit Gill, chief economist and senior vice president for development economics at the World Bank Group, said: “At a time when many countries in the world were simply retreating from the poorest countries, IDA (International Development Association) was a major lifeline. It was,” he said.
“Over the past five years, governments have poured most of their resources into 26 low-income countries, helping them weather historic setbacks they have suffered. IDA supports job creation, children’s education, and improved health care. However, it takes an unprecedented pace of investment for low-income countries to emerge from chronic emergencies and achieve key development goals. need to be accelerated.”
The report also found that low-income economies are at much higher risk of natural disasters than other developing countries.
According to the World Bank, from 2011 to 2023, the average annual loss from natural disasters will reach 2% of GDP, which is five times the average loss for lower middle income countries.
Adapting to climate change will be five times more expensive for low-income countries, costing the equivalent of 3.5% of annual GDP, according to the report.
Ayhan Kose, deputy chief economist and outlook group director at the World Bank, said low-income countries can take steps to save themselves, but they will also need support from wealthier economies.
“By simplifying taxpayer registration, tax collection and administration, we can expand the tax base. There is also plenty of scope to improve the efficiency of public spending,” Kose said.
“However, these economies need both greater international cooperation on trade and investment and greater support to IDA, which can work with the private sector to mobilize additional resources and help promote structural reforms. We also need stronger support from abroad.”
