Debt burdens are stopping investments in health, education, climate action and economic reform. Image: Unsplash/Tim Mossholder
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- 2022 will be remembered for war in Europe, inflation, and food and energy crises.
- At the same time the continuing effects of COVID-19 harmed human health.
- These 5 World Bank charts show the impact of 2022 on human development.
Few people will look back on 2022 with much affection. Just as the world struggled to recover from COVID-19 and the economic impact of lockdowns, war broke out in Europe, driving up global inflation and creating food and energy shortages.
The climate crisis also continued, with extreme weather causing catastrophic floods, droughts and wildfires that left millions homeless across the globe – 6.5 million people fled their homes in Pakistan alone at the height of floods in September.
The World Bank has just released a series of interactive charts that put the year into perspective and released data about its response. Here are five that sum up a very difficult year.
1. Global economic slowdown
Although the global economy started to recover from the depths of the pandemic, the bounceback was uneven and unstable, the World Bank says. The slowing rate of economic growth reversed much of the progress towards ending poverty, and led to increased global debt.
The “confluence of crises” in 2022 means that the world’s economic slowdown is the steepest since 1970, the Bank says. Tumbling consumer confidence and slowdowns in the world’s biggest economies mean more bad news could cause a full-blown global recession in 2023.
2. Slowing the fight against poverty
Before the pandemic, the world had been making steady progress in reducing poverty. But COVID-19 saw the number of people surviving on less than $2.15 a day rise for the first time in three decades. The crises of 2022 dashed hopes of ending extreme poverty by 2030.
The slowing fight against poverty means a target of reducing the number in extreme poverty to just 3% of the global population by 2030 will be missed, the Bank adds. It estimates that 685 million people could now be living in extreme poverty.
3. Developing world debt crisis
Developing nations’ debt crisis intensified in 2022, with 6 in 10 now either in debt distress – where borrowing becomes unsustainable – or at risk of it, the World Bank says. Debt burdens are stopping investments in health, education, climate action and economic reform.
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A bigger proportion of poorer nations’ debt – over 60% – is now owed to private lenders and countries like China, India, Saudi Arabia and the UAE. Although this trend spreads the risk, it also makes it harder for countries to restructure their debt, the Bank says.
4. The cost of climate change
The World Bank committed 36% of its total funding in 2022 to the fight against climate change, delivering a record $31.7 billion – almost $13 billion of which was to help countries increase their resilience to extreme weather events.
A report by the charity Christian Aid estimated that the 10 costliest climate-related disasters in 2022 each caused more than $3 billion of damage, with the impact falling disproportionately on the least wealthy nations.
5. Power off: Slowing access to electricity
Sharp increases in energy prices following Russia’s invasion of Ukraine have made it harder to achieve the UN Sustainable Development Goal of ensuring universal access to affordable, reliable, sustainable modern energy by 2030.
Progress was reversed in 2022, with an increase in the number of people in Sub-Saharan Africa without electricity. Globally, 733 million people have no electricity, and on current trends 670 million will still be unconnected in 2030 – around 10 million more than forecast in 2021, the Bank says.
What is the World Bank doing to tackle the crises?
- Cost of food: The World Bank has made $30 billion available to help nations suffering food insecurity in the face of soaring costs for agricultural products and fertilizers.
- COVID vaccines: The Bank is the single largest funder of the global COVID-19 health response. It has committed over $14 billion in more than 100 countries, funding 633.5 million vaccine doses.
- Back to school: As many as 70% of children in low and middle-income countries are not in full-time education. This is higher than before the pandemic, and COVID setbacks have eliminated all the gains made in reducing learning poverty since 2020. The Bank is supporting nations to keep schools open.
- A new source of funds: The Bank’s International Development Association (IDA) has launched a $93 billion package to support the 75 poorest and most vulnerable countries through the current crises. The IDA uses capital markets to almost quadruple every $1 given by donor governments.
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The views expressed in this article are those of the author alone and not the World Economic Forum.
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