A newly released World Bank report on Monday exposes a concerning trend: half of the world’s 75 most vulnerable countries are falling behind wealthier nations in terms of income growth. This phenomenon, termed the “Great Reversal,” persists despite these nations boasting youthful populations, abundant natural resources, and ample sunshine for solar energy.
These countries, known as IDA Borrowing countries and home to 1.9 billion people, hold immense potential. Their youthful workforce could be a catalyst for economic advancement, and their resources are critical for facilitating the transition to clean energy. Nevertheless, the report paints a troubling picture.
Indermit Gill, Chief Economist of the World Bank Group, expressed alarm, stating, “One out of three IDA countries is now poorer than before the COVID-19 pandemic.” Extreme poverty levels are eight times higher than the global average, with widespread issues of hunger, malnutrition, and debt distress. Foreign investment has dwindled, and the toll of climate disasters has doubled over the past decade.
The World Bank advocates for a dual approach to address these challenges. IDA countries must prioritize investments in education, healthcare, and job creation for their youthful populations. Additionally, they require substantial international financial support, including enhanced debt restructuring, increased aid, and global collaboration on climate change.
Gill emphasized, “The world cannot afford to overlook IDA countries. Their success is pivotal for global prosperity.” The report cites past success stories such as China, India, and South Korea, all of which were once IDA borrowers but managed to lift themselves out of poverty. With the implementation of appropriate policies and robust international support, the current IDA countries possess the potential to replicate these achievements.