KAMPALA: The next 25 years present a pivotal window for the world’s 26 poorest nations, many of which have seen progress stall due to conflict, economic instability, and debt distress. According to a new World Bank analysis, these countries—home to over 40 percent of people living on less than $2.15 a day—risk being left behind unless global and domestic efforts realign to foster sustained growth. Despite daunting challenges, opportunities exist for these nations to escape poverty, thanks to abundant natural resources and burgeoning working-age populations.
Limited Progress Over Two Decades
The findings, part of the World Bank’s forthcoming Global Economic Prospects report, highlight a troubling stagnation in growth among the poorest nations. While 39 countries, including India, Indonesia, and Bangladesh, have transitioned from low to middle-income status since 2000, the remaining 26 have seen little change. On average, their inflation-adjusted GDP per capita has grown by less than 0.1 percent annually over the past 15 years. Only six are projected to achieve middle-income status by 2050 if current trends continue.
Mounting Challenges
Chief among the obstacles is widespread conflict and fragility. Seventeen of these countries are experiencing significant instability, with lethality rates 20 times higher than in other developing economies. This disrupts economic activity and hinders the establishment of the stable institutions necessary for growth.
Climate change presents another pressing challenge. Nearly all of these nations are highly vulnerable to its effects, facing recurring droughts, floods, and natural disasters that disproportionately affect agriculture-dependent economies. These events displace populations, intensify resource scarcity, and stifle development.
Debt distress is equally concerning. Many of these countries are either in debt crises or at high risk, limiting their ability to invest in critical infrastructure and social services. Geographic disadvantages compound these issues, as half of these nations are landlocked and bordered by other impoverished countries, reducing access to trade routes and external markets essential for economic growth.
Opportunities for Growth
Despite these challenges, the report identifies significant untapped potential in these nations. Together, they hold more than 60 percent of the world’s cobalt reserves and 50 percent of its graphite, key materials for renewable energy and storage. Their solar energy production potential is among the highest globally. Additionally, these countries boast rapidly expanding working-age populations, offering a demographic dividend that could drive economic progress.
The experiences of Nepal and Rwanda provide valuable lessons. Nepal, once in the grip of civil war, achieved middle-income status by 2019 through political stability and international support. Similarly, Rwanda has transformed its economy through policy reforms, debt relief, and investments in healthcare and education, positioning itself on the brink of middle-income status.
A Call to Action
“The global battle to end extreme poverty will not be won until it is won in the 26 poorest countries,” said Ayhan Kose, the World Bank’s Deputy Chief Economist. He urged national policymakers and international stakeholders to address the triple challenges of conflict, climate vulnerability, and debt distress.
Pathways to Prosperity
The report emphasizes that progress is possible with the right mix of domestic reforms and international support. Key actions include fostering political stability, investing in infrastructure, and creating an environment conducive to private enterprise. Sustained growth accelerations, often spurred by reforms that channel resources into productive investments, are critical for these nations to break free from poverty.
As the report highlights, the next 25 years represent a window of opportunity. With strategic interventions, these countries can harness their natural resources and demographic potential to chart a path toward economic stability and prosperity. The stakes are high, but the potential rewards—both for the nations themselves and for global poverty reduction—are immense.
