The World Bank, through an extensive document published on its website, revealed the results of an analysis exercise they carried out to define how we live this year that is just days away from ending. The international entity begins this report with a forceful phrase: “If 2022 was a year of uncertainties, 2023 is the year of inequality”.
This harsh statement is the preamble to indicate that they are The poorest countries are having a ‘bad time’, because after coming from a pandemic (due to Covid-19), the attempt to recover socially and economically has been hindered this year by several factors: climate change; economic and social fragility, conflicts and violence, food insecurityamong others.
“As in most crises, The poorest countries in the world are the most affected. Many of these countries, which are already in a situation of over-indebtedness, must face an even greater scarcity of resources. Online gig work is an essential aspect of the labor market and a source of income, but only for those who can access it. And we must not forget the current refugee crisis. Improved immigration policies can not only help alleviate the crisis; They can also drive economic growth and prosperity,” the organization says.
In summary, the World Bank assures in its analysis that in 2023 allSome more than others, we have faced a polycrisis. “How the World Bank responds and manages new and existing threats is increasingly critical“, indicated the entity.
A few days before the end of 2023, this is the World Bank’s summary of the year in new major topics.
1. Poverty
The World Bank assured that although extreme poverty has decreased in middle-income countries, “the problem remains worse than before the pandemic in the poorest countries and affected by fragility, conflict or violence. The persistence of poverty in these countries makes other key global development goals much more difficult to achieve.
It highlights that almost 700 million people (690.76 million) in the world are today in extreme poverty, living on less than US$2.5 a day.. Although progress had been made, The entity highlighted that with the covid-19 pandemic everything went backwards and that today three years of fighting against poverty have been lost. People who live on less than US$3.65 a day amount to 1,155.73 million and those who have less than US$6.85 are 1,836.07 million people.
2. Debt
According to the International Debt Report of the world Bank, Developing countries spent a record US$443.5 billion servicing their public and publicly guaranteed external debt in 2022. They added that the poorest countries receiving financing from the World Bank’s International Development Association (IDA) also paid a record $88.9 billion in debt service costs in 2022, 4.8% more than in 2021.
“Poorer countries are at risk of debt crises as borrowing costs rise. Rising costs led to resources being diverted and critical needs such as health, education and the environment being neglected.“, warned the entity.
3. Global economic outlook
High inflation, rising interest rates, reduced investments and the disruption caused by Russia’s invasion of Ukraine were part of the causes that have slowed down the world economy. according to the World Bank.
“It is projected that the World economy will grow 1.7% in 2023 and 2.7% in 2024, and that the sharp slowdown in growth will be widespread. Forecasts in 2023 will be corrected downwards for 95% of advanced economies and for almost 70% of emerging markets and developing economies,” he indicated.
And he ended this topic by saying that the economic outlook for developing economies has been bleaker in 2023. “The first four years of the 2020s have been the weakest in 30 years“, said.
4. Falling long-term growth prospects
The first comprehensive assessment of potential long-term output growth rates following the Covid-19 pandemic and Russia’s invasion of Ukraine was presented by the World Bank in the report titled Falling Long-Term Growth Prospects: Trends, Expectations, and Policies. And the conclusion is alarming: “These rates can be considered the “speed limit” of the global economy, and this year’s conclusions are worrying.”
The World Bank once again reiterates that what is expected is that the maximum long-term rate of global growth, without causing inflation, will fall to the lowest level in the last 30 years in the remainder of the 2020s. “This is because most of the forces that have driven prosperity since the early 1990s have weakened, including the increase in the working-age population“explained the World Bank.
5. Climate
On this issue the prognosis is surprising. The World Bank stated in this report that Climate change could force 216 million people to migrate within their own countries by 2050.
“It will likely increase water stress and decrease crop yields, especially in the most food-insecure regions. Agri-food systems are also responsible for a third of all emissions. Expanding renewable energy and increasing energy efficiency, and investing in large-scale electrification, while avoiding the construction of new coal plants and decommissioning old ones, are critical measures to provide clean energy to homes , schools, hospitals and companies“he indicated.
Although they highlight that countries are working to reduce emissions and boost resilience, what is required are real social, economic and technological changes.
“Just this month, during COP28 in Dubai, the World Bank announced (i) bold steps to increase climate finance, expand the scope of debt standstill clauses following a climate crisis, enhance efforts on carbon and decisively bend the curve of methane emissions, among others,” reported the World Bank.
And I add: “In a world in which the poorest are the most affected by crises, climate change is no exception. Addressing it is a central issue in the challenge of development and the creation of a habitable planet.“.
One of the data provided in the report is that High-income countries represent 16% of the world’s population, but generate 31% of GHG emissions.
6. Commodity markets
The entity recovers the conclusions of the latest Commodity Markets Outlook report, where they explain that an escalation of the current conflict in the Middle East, added to the disruptions caused by Russia’s invasion of Ukraine, could push the global commodity markets into uncharted waters.
“Global commodity prices declined nearly 25% in 2023 relative to 2022, the steepest decline since the pandemic. The start of the conflict in the Middle East in early October caused an initial rise in prices, although the impact so far has been modest. “The prices of most basic products remain above the average of the 2015-19 period,” he explained.
The World Bank’s forecast is that Oil prices will average US$90 a barrel in the current quarter, before falling to an average US$81 next year as global economic growth slows, and overall commodity prices are expected to basics will fall 4.1% in 2024.
As for agricultural commodity price projections, what they estimate is that they will decline next year as supplies increase. Regarding base metal prices, they also said that they will fall 5% in 2024, and commodity prices will stabilize in 2025.
7. Women, business and the law
This figure given by the World Bank is overwhelming: almost 2.4 billion women of working age in the world still do not have the same rights that men have.”
The entity explained that in 2022, the average score worldwide in the Women, Business and Law index was 77.1, increasing only half a point, which indicates that, on average, women enjoy only 77% of the same rights as men. This year, The global pace of reforms to ensure equal rights for women has fallen to the lowest level in 20 years and, in 2022, only 34 legal reforms related to gender equality were registered in 18 countries, which is the lowest number since 2001.
“This poses a major obstacle to economic growth and women’s empowerment at a time when the global economy is already suffering setbacks. At the current pace of reform, women entering the workforce today will leave before gaining the same rights as men“, reported the entity.
8. World Development Report on Migration
Regarding migration, the World Bank revealed that it is one of the most pressing development challenges. Around 184 million people (2.3% of the world’s population) live outside their country of nationality, and almost half of them are in low- and middle-income countries. “How migration is addressed and migrants are protected as they move from their place of origin to receiving communities is key to ensuring their economic growth and success.“, said.
For the organization, it is necessary to have improved immigration policies that help boost prosperity in all countries. “Populations around the world are aging at an unprecedented rate, leaving many countries increasingly reliant on migration to realize their long-term growth potential. This can be used as an opportunity to find better ways to ensure that migration benefits people and societies,” he said.
9. Work without borders
The organization explained that the demand for online gig workers is increasing faster in developing countries than in industrialized countries and is because of the flexibility and potential to generate additional income. According to the World Bank, online gig work is a growing force in many labor markets, accounting for up to 12% of the global workforce. It constitutes a growing source of income for millions of people.
“Local gig work platforms play a vital role in local labor markets, but face difficulties in establishing a viable business model. Online gig work can support inclusion by providing job opportunities to young people, women and low-skilled workers. The gig economy can help governments develop digital skills, increase income-earning opportunities, and expand social protection coverage for informal workers,” said the World Bank.
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