Posted on 22 April 2024
In a sobering assessment of global economic disparities, the World Bank’s latest report reveals a concerning trend among the world’s most vulnerable nations. The study, titled “The Great Reversal: Prospects, Risks, and Policies in International Development Association Countries,” highlights a growing income gap between 75 of the poorest countries and their wealthier counterparts—the first such divergence this century. Despite notable strides in development over the past two decades, these countries, which are eligible for low-interest loans and grants from the International Development Association (IDA), are now witnessing a slowdown in income growth compared to affluent economies. This reversal is alarming, as one-third of these nations are now poorer than before the COVID-19 pandemic, exacerbating poverty and hunger among their populations.
The report underscores the potential of IDA countries to contribute significantly to global prosperity, given their demographic and resource advantages. However, realizing this potential requires comprehensive policy reforms to strengthen fiscal and monetary frameworks, enhance human capital, and improve institutional quality. Moreover, the World Bank emphasizes the necessity of consistent international financial support and cooperation on global policy issues to aid these countries. With the right mix of internal reforms and external assistance, IDA countries could emulate the success stories of former IDA borrowers like China, India, and South Korea, which have seen remarkable economic transformations.
Source: The World Bank
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