New Delhi: Poor countries around the world are continuously deteriorating. On one hand, poverty is increasing there, on the other hand, the debt trap is also getting tighter. A World Bank report shows that the 26 poorest countries of the world are currently under heavy debt, which is the highest since 2006.

40 percent of the world's poorest people live in these 26 countries. These people are not only trapped in the trap of poverty and debt, but they are also at the highest risk of natural calamities and other problems.

What does the World Bank report say?

The World Bank report shows that the economy of these 26 poor countries is still weaker than it was just before the Corona pandemic. At the same time, the rest of the world has largely recovered from the shock of Covid. Their pace of progress has more or less become the same as before.

This report has been released just before the annual meeting of the World Bank and the International Monetary Fund (IMF) begins. This shows that efforts to eradicate extreme poverty have suffered a major setback. The World Bank is accelerating efforts to raise $100 billion to replenish its financing fund for the world's poorest countries - the International Development Association (IDA).

What is the per capita income

In these 26 poorest countries, annual per-capita incomes are less than $1,145. The World Bank says that these countries have become increasingly dependent on grants from IDA and near-zero interest rates because market financing has almost ended.

The debt-to-GDP ratio of these countries is 72%, which is the highest in 18 years. Half of the countries in this group are either trapped in debt crisis or are on the verge of getting trapped. The trouble does not end here. About two-thirds of the 26 countries are either embroiled in armed conflict or are finding it difficult to maintain governance due to institutional and social challenges. This is having a bad effect on everything from foreign investment to exports. Due to this, the risk of inflation and recession is constantly increasing in these countries.

What is the International Development Association?

IDA provides essential facilities in poor countries. It is usually replenished every three years with contributions from the World Bank's shareholder countries. It raised a record $93 billion in 2021. World Bank President Ajay Banga is trying to take it beyond $100 billion by December 6.

Natural disasters have also had a disproportionate impact on these poor countries in the last decade. The World Bank says that between 2011 and 2023, the average annual loss from natural disasters was 2 percent of GDP. This is five times more than the average for low-middle income countries. This shows the need for much higher investment for essential facilities in these countries.