UN: The gap between rich and poor countries is growing, again

In a reversal of recent trends, the UN has found that the gap between rich and poor countries is steadily widening. This is according to the United Nations Development Programme (UNDP)’s 2023-24 Human Development Report published in March 2024.

In a reversal of recent trends, the UN has found that the gap between rich and poor countries is steadily widening. The United Nations Development Programme (UNDP) highlighted this untoward development in its 2023-24 Human Development Report which was published in March 2024.

The results make for grim reading in relation to the period since the COVID-19 pandemic. As the graphic below shows, while 100% of OECD countries have returned to or surpassed pre-pandemic human development index (HDI) levels, the least developed countries show a mixed bag of results. Only about half of poorer countries have recovered from COVID while the other half are still trending below pre-pandemic HDI levels.

Demonstrating the difference between countries measured by the HDI, Switzerland was ranked number one globally with a score of .967, better than its 2021-22 score of .962. Yet, South Sudan, which was ranked last in 2021-22 with a score of .385, had an even worse 2023-24 score of .381 under the index which considers per capita income, life expectancy and education in its ranking.

Although this is hardly news for anyone that closely followed the train of events during COVID and its aftermath, I think the data serves to reinforce just how pivotal the events of 2020 were to many vulnerable economies. The significant mismatch in state spending during the pandemic, vaccine inequality, and harsher impact of lockdown policies on poorer countries seem to have had their effect.

The data indicates a downturn in what had previously been a positive 20-year period where the economic circumstances between rich and poor countries had started to equalize.

“COVID-19 has been a ‘multiplier’ of pre-existing structural problems”

Some of the big pre-COVID issues have become even bigger today. Challenges like populism, militarisation and “mismanaged globalisation” are key obstacles to equitable socio-economic prosperity across the world. According to Achim Steiner, administrator of the UNDP, “we are seeing that defence budgets are increased year on year, while development budgets, the very currency of being able to help poorer countries to invest in cooperation, are being slashed. This is a reciper for a much darker future.”

He states further that, “the pandemic weakened countries’ resilience and ability to withstand shock. So the subsequent shocks of conflict, which have affected many countries, and the high-inflation environment have cumulated to disproportionately affect those countries that were already the most weakened by the pandemic.”

The losses may become permanent

Apart from the disappointing reversal in the recent HDI trend that the UNDP report shows, it’s possible that the losses could become permanent, especially “if the global HDI continues to evolve below the pre-2019 trend…”

In the report, the UNDP notes that “based on the 1999-2019 trend, the global HDI value was on track to cross the threshold defining very high human development (a value of 0.800) by 2030 — coinciding with the deadline to meet the Sustainable Development Goals. Now, the world is off track. Indeed, every region’s projected 2023 HDI value falls below its pre-2019 trend.”

Consequently, we have a lot of work on our hands if we’re to elevate global HDI back to its pre-pandemic trend. Sadly, as the report points out, some of the losses already experienced will never be recovered. But, with global commitment towards improving lives across board, it may be able to reverse and consolidate on gains elsewhere, enabling a better future for us all.

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(by Do?an Erbek and STF Team) https://www.sustainabletradeandfinance.com/about-us-dogan-erbek/