ROMA – If the objective was “leaving no one behind”, we can say that the world has failed, at least so far. This is the incipit of the article published by Blacknesssigned by Brando Ricci. Which continues: the poorest countries on the planet are in fact increasingly poorer and vulnerable to the global shocks that cyclically, increasingly close to each other, hit our world.
Out of 26 poor countries analyzed, 22 are in Africa. This is not stated by a group of activists nor by Pope Francis, but a new study from the World Bank on the economic vulnerability of the 26 Lower income countriesi.e. the lowest income countries in the world. Twenty-two of these are located in Africa, including important countries on the continent such as the Democratic Republic of Congo, Ethiopia and Mozambique. The report was published a few days before the start of the annual meetings of World Bank e International Monetary Fund (FMI).
Leave no one behind, they said. The motto, in the English declension Leave no one behindrepresents the promise that informs the entire architecture ofAgenda 2030 for United Nations Development. A principle that was forcefully relaunched even during the pandemic. Yet it went differently. According to document from the World Bankthe 26 poorest countries in the world, that is, those with an average annual per capita income of less than 1,145 dollars (in Italy, for comparison, it is around 34,700 dollars) are poorer now than they were before of the global health emergency.
Those below the threshold of 2.15 dollars a day. In the poorest low-income populations, where more than half the population lives below the poverty line of $2.15 a day, average per capita income has fallen by about 14% compared to pre-pandemic levels. To achieve their sustainable development goals, these latter states would have to more than double the annual investments made for this purpose over the last decade.
They are countries among the most burdened by debt. These countries, it is worth remembering, represent 10% of the world population and almost half of the total poor countries in the world. They are also among the most burdened by public and foreign debt in particular and the pandemic and the related crises have only made things worse. In 2023 alone, the debt/gross domestic product ratio of the areas covered by the document increased by 9% – the largest growth in the last 20 years – settling at 72%, well above the sustainability threshold of 60%.
And interest rates have also increased. The payment of which in 2023 was worth more than 10% of the state’s tax revenue. Again, the highest figure in the last two decades. All low-income countries are at risk or high debt risk. At least one, Ethiopiadefaulted on its debt after the pandemic began.
Linked crises that create a trap. The data presented so far can be imagined as the mechanism of a trap. They are linked to each other on a systemic level and worsen each other, tightening their grip on the economies of individual countries with each worsening. In fact, given the complex economic scenario to say the least, the ability of low-income countries to attract subsidized financing or with low interest rates – the only ones they might think they can repay in the future – is largely worn out, observes the World Bank.
And the share of aid to these countries is decreasing. According to the Washington-based institute, the share of GDP of public development assistance destined for these countries has decreased in the recipient countries themselves to reach 7% in 2023, the lowest share in the last 21 years.
And the addiction increases. These are a series of factors which increase the dependence of low-income countries on aid provided by the International Development Agency (International Development Association – IDA), a World Bank body that grants grants or loans at an interest rate close to zero with the aim of supporting the poorest states. “At a time when much of the world has distanced itself from poorer countries, IDA has been their main lifeline,” said Idermit Gill, chief economist and senior vice president for economic development at World Bank Group.
World Bank loans forcing cuts in public spending. If this aid is in fact fundamental, the conditionality with which it is granted has been a source of criticism for years. The support plans provided by the so-called Bretton Woods institutions, i.e. the World Bank and the IMF, including those starting from the IDA, in fact require the beneficiary governments to impose a series of reforms which often involve the contraction of public spending, ending up further penalizing the most vulnerable sections of the population.
Powerless in the face of the climate crisis. Last but not least, low-income countries are often located in the heartlands of hotspot of the global climate crisis, such as the Sahel or the Horn of Africa. The result is easy to say: from 2011 to 2023, natural disasters – increasingly intense and frequent due to climate change – cost low-income countries up to 2% of GDP every year, or five times more than in low-income countries. low-medium income. The same proportion is found in the costs of adapting to the crisis, which according to the World Bank are around 3.5% of GDP in poor countries.
There are the conditions for change: but here are the two different reasons why it doesn’t happen:
At first. In theory, it closes the World Bankthe poorest states on earth would have the potential to reverse course and start a parable of development. Just look at the capital of natural resources and demography, which indicates an ever-increasing availability of the workforce. However, there are numerous characteristics that hinder any development prospect. Some are structural but purely endogenous, such as the inability to raise tax revenues and a general inefficiency when spending funds, also due to corruption.
The others. Other causes, however, are systemic and call into question the entire world system: the dependence on the export of raw materials for example, and with them the volatility of their prices on the markets. And then the wars, which afflict two-thirds of low-income countries. Among these, we find the theaters of some of the longest-running crises on the planet, from the Democratic Republic of Congo to Somalia, from South Sudan to Syria to Yemen.
* Brando Ricci – Blackness
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