Battle-scarred developing nations search for a way out of permacrisis
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Developing country policymakers left this week’s IMF-World Bank meetings more frustrated than ever as successive external shocks kept derailing efforts to cut debt, reform economies and improve living standards for millions of people already struggling to pay for food and fuel. The war and the sharp spikes it triggered in oil and fertilizer prices have worsened the outlook, even as officials across Africa, Asia and Latin America search for more durable ways to protect their economies.
The IMF and World Bank offered little beyond familiar advice, warning countries against hoarding energy and relying on broad, untargeted fuel subsidies. At the same time, they acknowledged that the latest shock could deepen inflation, weaken growth and destabilize fragile budgets that were only just recovering from earlier crises.
For many officials, the frustration was not only about the current crisis but the pattern of repeated ones. Countries such as Zambia and Sri Lanka, which had already made painful fiscal adjustments, are now facing new strain, while Kenya has become the first larger emerging economy to publicly confirm a formal request for emergency World Bank support.
Nigeria’s finance minister, Wale Edun, said the repeated shocks were eroding the gains from reform efforts such as subsidy removal, foreign exchange liberalisation and regulatory changes aimed at attracting investment. He argued that developing nations need more self-reliance, stronger domestic resource mobilisation and deeper regional integration, including more trade within Africa.
The broader message from the meetings was that policymakers are no longer waiting for outside rescue. Some are turning toward renewable energy, critical minerals and other domestic advantages to build resilience, while the World Bank warned that a prolonged conflict could push another 50 million people into acute food insecurity and destroy millions of jobs in the near term.
