World Bank: Poorest Nations in Worst Financial Shape Since 2006
Facts
- A recent World Bank report has warned that the 26 poorest countries, which are home to 40% of the world’s poorest population, are currently facing their worst financial conditions since 2006.[1][2]
- The organization says that these countries, many of which are in sub-Saharan Africa, are currently dealing with massive debt problems, conflicts, economic instability, and vulnerabilities to natural disasters.[3]
- The report also detailed how, while the rest of the world has largely economically rebounded since the outbreak of COVID-19, many of these countries are even poorer now than they were before the pandemic.[4]
- The report also highlighted that international aid has hit a 21-year-low, with countries contributing lower and lower percentages of their GDPs to aid developing nations.[1][5]
- The bank is also seeking to raise $100 billion in funds to replenish its International Development Association, which has been supporting many financially struggling nations through near-zero interest loans and grants.[6]
- The report additionally suggested that climate change is having an increasingly damaging effect on the economies of the poorest nations, with natural disasters resulting in an annual average loss of 2% of global economic output between 2011 and 2023.[4][7]
Sources: [1]Reuters, [2]WION, [3]The Times of India, [4]Dw.Com, [5]Openknowledge, [6]Al Jazeera and [7]The Japan Times.
Narratives
- Pro-establishment narrative, as provided by Brookings. Since its inception, the World Bank has played an instrumental role in global economic development. The investments from the bank play a crucial role in global infrastructure projects and some of its initiatives play critical roles in helping fragile and conflict-stricken states. This essential work must continue.
- Establishment-critical narrative, as provided by Nature. The World Bank and its policies are not devoid of criticism and controversy. The bank's loan policies contribute to a damaging cycle of loan dependency, in which recipient countries become continuously dependent on external financing. Additionally, the bank's neoliberal principles are extremely Western-centric, contributing to this uneven power structure between the global south and the rest of the world.