According to the World Bank, efforts to eradicate extreme poverty have had little success recently. The poorest countries in the world are more indebted than they have been in 18 years.
According to a World Bank report, the 26 poorest countries in the world are more indebted than they have been since 2006. Accordingly, the affected economies, in which around 40 percent of the world’s population live, are poorer today on average than before the corona pandemic. The rest of the world, on the other hand, has largely recovered and is growing again.
The debt level of these countries is now on average 72 percent of gross domestic product (GDP), according to the report published by the World Bank on Sunday. Half of the group whose per capita income is less than $1,145 are either in a debt crisis or at risk of one. That is twice as many as in 2015, according to the study.
International aid has declined
In addition to the high debt burden, the poorest countries are struggling with a decline in international aid. According to the World Bank, the amount of aid reached its lowest level in two decades. “There is much that low-income economies can – and must – do for themselves,” said World Bank Deputy Chief Economist Ayhan Kose. “But these economies also need greater help from abroad.”
World Bank wants Financing Fund increase
The Washington-based World Bank is currently seeking to increase its financing fund for the world’s poorest countries, the International Development Agency (IDA), by $100 billion. The 26 poorest economies surveyed are increasingly reliant on IDA grants and near-interest-free loans as market financing has largely dried up, the World Bank said.
The study also points out that these countries have been hit harder by natural disasters over the past decade. Between 2011 and 2023, natural disasters caused annual losses of an average of two percent of GDP, which is five times higher than the average for lower-middle-income countries.