Alarm over ‘reversal’ of development

In Business
April 16, 2024



WASHINGTON:

Half of the world’s 75 poorest countries are experiencing a widening income gap with the wealthiest economies for the first time this century in a historical reversal of development, the World Bank said in a report on Monday.

The differential between per capita income growth in the poorest countries and the richest has widened over the past five years, according to the report.

“For the first time, we see there is no convergence. They’re getting poorer,” Ayhan Kose, Deputy Chief Economist for the World Bank and one of the report’s authors, told Reuters.

“We see a very serious structural regression, a reversal in the world … that’s why we are ringing the alarm bells here,” he said.

The report said the 75 countries eligible for grants and zero-interest loans from the World Bank’s International Development Association (IDA) risk a lost decade of development without ambitious policy shifts and significant international aid.

Kose said growth in many IDA countries had already begun to taper off in these countries before the Covid-19 pandemic, but it would be just 3.4% in 2020-2024, the weakest half-decade of growth since the early 1990s. Russia’s invasion of Ukraine, climate change, increases in violence and conflict also weighed heavily on their prospects.

More than half of all IDA countries are in Sub-Saharan Africa; 14 are in East Asia and eight are in Latin America and the Caribbean. Thirty-one have per capita incomes of less than $1,315 a year. They include the Democratic Republic of Congo, Afghanistan and Haiti.

One in three IDA countries is poorer now than on the eve of the pandemic. IDA countries account for 92% of the world’s people who lack access to a sufficient quantity of affordable, nutritious food. Half of the countries are in debt distress, meaning they are unable to service debt or are at high risk of not being able to.

Published in The Express Tribune, April 16th, 2024.

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