For the first time this century, half of the world’s 75 poorest countries are experiencing a widening income gap with richer economies, representing a historic setback in development.
This is stated by the World Bank in a document on the eve of the spring meeting held this week by this institution together with the International Monetary Fund (IMF). The gap between per capita income growth in the poorest and richest countries has widened over the past five years. That is to say, the poor are, in comparison, increasingly poorer. Inequalities increase.
Ayhan Kose, deputy chief economist at the World Bank, points out that this setback began during covid. Between 2020 and 2024, this group of countries, which represent a fifth of the world’s population – some 1.9 billion people – recorded growth of 3.4%, which represents its worst five-year period since the 1990s.
More than half of these countries – eligible for grants and interest-free loans from the World Bank – 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 annually. One in three states in this group is poorer now than on the eve of the pandemic.
However, the institution emphasizes that these territories also have very positive elements. Among them, the demographic dividend, at a time when Western economies are aging. Likewise, these countries also have a great wealth of natural resources and a high potential for solar energy generation, and have important mineral deposits that could be fundamental for the world to make the transition to clean energy.
The problem is that half of these states, which need investments, are in a situation of over-indebtedness or are at serious risk of suffering from it. Foreign lenders in recent years have moved away from them, precisely when they need money most.
“The well-being of these countries has always been fundamental to long-term global prosperity. Three of today’s economic powers—China, India, and South Korea—have prospered to such an extent that they have been able to reduce extreme poverty and improve living standards. With help from abroad, all of these poorer countries could also do it,” said Indermit Gill, vice president of this organization.
In this sense, the organization advocates for debt relief or restructuring.
