These stark warnings come from the World Bank’s first comprehensive assessment of conflict-affected economies in the aftermath of the Covid-19 pandemic.
The report finds that as conflict has become more frequent and deadly in the 2020s, these economies are falling behind on nearly every major development indicator.
Since 2020, per capita GDP in these countries has contracted by an average of 1.8% annually — while other developing economies have seen average growth of 2.9%.
This year, some 421mn people are surviving on less than $3 a day in economies afflicted by conflict or instability — more than in the rest of the world combined. That number is projected to rise to nearly 435mn by 2030, representing nearly 60% of the world’s extreme poor.
“For the last three years, the world’s attention has been focused on conflicts in Ukraine and the Middle East. That focus has now intensified,” said Indermit Gill, Chief Economist of the World Bank Group.
“Yet more than 70% of those suffering from conflict and instability are in Africa. When left unaddressed, these conditions become entrenched — half of the countries currently facing conflict or instability have been in such circumstances for 15 years or more. Misery on this scale is inevitably contagious,” Gill noted.
The findings help explain why the global goal of eradicating extreme poverty remains out of reach. Poverty is now increasingly concentrated in places where progress is most difficult.
Of the 39 economies classified as conflict-affected or unstable, some 21 are currently experiencing active conflict.
While the extreme poverty rate in developing economies has declined to just 6%, the rate stands at nearly 40% in fragile and conflict-affected settings. Their average per capita GDP remains stagnant at around $1,500 — unchanged since 2010 — compared to $6,900 in other developing economies, where it has more than doubled.
Labour markets, too, are under severe strain. These economies are failing to generate enough jobs to keep up with population growth. In 2022, of the more than 270mn people of working age in these countries, fewer than half were employed.
The impact of conflict and instability is evident across the development spectrum. On average, life expectancy is seven years lower than in other developing economies. Infant mortality is more than twice as high.
Acute food insecurity affects 18% of the population — 18 times the rate in other developing economies. Sadly, 90% of school-age children do not meet minimum reading proficiency.
Yet, the report also highlights untapped potential. Natural resource wealth — including minerals, forests, oil, gas, and coal — represents over 13% of GDP on average in these economies, three times the share found elsewhere in the developing world.
Several countries — including the Democratic Republic of Congo, Mozambique, and Zimbabwe — are rich in the critical minerals
needed for renewable energy technologies like electric vehicles, solar panels, and wind turbines.
Moreover, these countries have one of the world’s youngest and fastest-growing populations. While working-age populations are stabilising or shrinking in many parts of the world, they are projected to expand in conflict-affected economies through at least 2055.
By then, nearly two out of every three people in these countries will be of working age — the highest share globally!
Realising this demographic dividend, however, will require substantial investment — in education, healthcare, infrastructure, and in fostering a dynamic private sector capable of generating sustainable, quality employment, the World Bank emphasised.
Undoubtedly, extreme poverty is surging in conflict-affected economies with their development gains getting reversed amid most widespread conflict in a period of nearly 25 years!
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