BANGKOK: Millions could be thrown into poverty by surging energy costs, the impact of an intense El Nino phenomenon and higher interest rates, with vulnerable countries being pushed to the brink by repeated crises, the UN’s development chief told AFP.
Global fuel prices have soared since the United States launched its war on Iran in late February, with Tehran’s retaliations against Washington’s Gulf allies curtailing major oil and natural gas supplies.
Fiscal deficits and debt-to-GDP ratios around the world have ballooned since the 2008 global financial crisis, with governments firefighting against a series of shocks including the pandemic and wars in Ukraine and the Middle East.
Speaking on the sidelines of the IMF-World Bank Annual Meetings in Bangkok, UN Development Programme (UNDP) head Alexander de Croo said many developing countries had responded to the current spike in energy prices with blanket subsidies, but a succession of crises had left them with limited resources to keep that up.
“You have to repair your roof while at the same time your home is on fire,” he told AFP, adding governments in the developing world did not have time to rebuild buffers or resolve previous shocks before being hit by new crises.
The IMF warned this week that while global growth had held up in the face of the energy crisis, that resilience was highly dependent on the boom in AI technology investments, and poorer countries not exposed to that were still struggling.
IMF chief Kristalina Georgieva had warned that “winter is coming” — an allusion to popular fantasy book series “Game of Thrones” — implying that a cataclysm was around the corner if the world did not prepare for it.
And De Croo added: “Some countries have a well-insulated house with money in the bank.....
