The World Bank is an organization dedicated to providing financing advice, and research to developing nations to aid in their economic advancement. In its 110 page Global Progress report it states ” The recent IMF/WBG Annual Meetings was aptly titled Development in Crisis highlighting the fact that today’s crises are happening all at once, and their negative repercussions are compounded by climate change. The war in Ukraine and aftershocks from the COVID-19 pandemic triggered a steep rise in food, fertilizer,and energy prices, and interest rates. Many developing countries are experiencing historically high inflation,and more than half of IDA countries are at high risk of debt distress or already in debt distress, seriously limiting fiscal space available for many developing countries to alleviate the burden on their populations with spending measures.
In all these crises, the poor and vulnerable are the hardest hit. The recently published World Bank’s Poverty and Shared Prosperity Report finds that COVID-19 dealt the biggest setback to global poverty-reduction efforts: it’s estimated that about 70 million people were pushed into extreme poverty in 2020, the largest one-year increase since global poverty monitoring began in 1990. This period also dealt the worst blow to progress on education and learning— learning poverty has increased by a third in low- and middle-income countries—which may further worsen poverty in the future.
To respond to these multiple crises, many developing economies need to spend more to protect the poor and vulnerable households, to service their debt, to reverse the learning losses and to invest in climate change mitigation and adaptation. At the same time, these countries are experiencing slower revenue recovery as their economic growth slows. Global tax revenues in 2020 declined by 12 percent in real terms, a steeper 15 percent decline in low-and middle-income countries.