A recent report by the UN Department of Economic and Social Affairs (DESA) has revealed that the fallout from the war in Ukraine could dramatically worsen the economic outlook for the developing countries already facing economic challenges due the COVID-19 pandemic. The report clearly depicts that the rich nations were able to support their pandemic recovery with record sums borrowed at ultra-low interest rates, while the poorest countries spent billions servicing debt, thus preventing them from investing in sustainable development. The report indicates that presently on average, the poorest developing countries pay around 14 percent of revenue for interest on their debt, while the figure is 3.5 percent for richer nations.
The third decade of the twenty-first century has witnessed unpredictable circumstances mainly due to the emergence of the global COVID-19 pandemic which shattered the global economy while pushing the developing economies to the edge of collapse. Most of the developing nations diverted their development budgets, and funds for social protection, healthcare, and education toward COVID-19 mitigation campaigns, which badly hurt the pace of development in third-world nations. While the eruption of the Ukrainian crisis is another jolt for the developing nations, mostly dependent on the imported energy and food grains. Russia, the largest exporter of oil and gas get involved in war with Ukraine, the fourth-largest exporter of food grains, hence the prices of essential commodities and fuel rocketed high in all parts of the world and likely to result in further increases in debt distress, hunger, and broadening gap between the rich and the poor.
According to a UN report, the pandemic had pushed 77 million people into extreme poverty in 2021, while the numerous third world nations reliant on the tourism industry such as Sri Lanka, Malaysia, Turkey, Ecuador, South Africa, and others are facing serious economic challenges. The world forum has stressed the developed world for massive investment in sustainable development, clean infrastructure, social protection and public services while assisting developing countries to do so for reduction of inequality, unemployment, poverty, and famine throughout the world.
