Rethinking Development in an Age of Crisis
New transnational threats such as climate change and pandemics require international financial institutions to redefine the fundamentals of growth, strengthen their operating models, and foster greater international cooperation. With global shocks showing no signs of abating, united action must become the new normal.
WASHINGTON, DC – Nowhere is the impact of recent crises – the lingering economic consequences of COVID-19 and the global spillover effects of Russia’s war in Ukraine – being felt more acutely than in the developing world. People in poor countries are struggling to cope with higher food and fuel prices and unsustainable debt, while schoolchildren are still suffering from learning loss caused by the pandemic. In many places, economic growth has stalled.
Compounding these challenges, the effects of climate change are becoming even more pronounced, with floods, droughts, and crop failures threatening lives and livelihoods. And as the Intergovernmental Panel on Climate Change (IPCC) warned in its most recent report, the world must act immediately to ward off some of the more catastrophic consequences of global warming, which would hit the poorest and most vulnerable the hardest.
The global “polycrisis” poses an unprecedented threat to economic development. Creating a more resilient, sustainable, and prosperous future for all now requires redefining the fundamentals of growth to address new transnational threats. Responsiveness, innovation, international cooperation, and private-sector partnerships matter more than ever. The World Bank, already the largest provider of finance for climate action in developing countries, is strengthening its operating model to respond rapidly to these changed circumstances.
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