ISLAMABAD: In a review of the year, the World Bank says 2022 has been a year of uncertainty, with education losses, global inflation, disruptions in supply chains and other global challenges that reminds that effects of the Covid-19 pandemic continue to linger.

An increase in the severity of natural hazards continues to illuminate the social and economic impacts of climate change. As countries began looking at a post-pandemic world in 2022, climate impacts got worse: extreme floods in Pakistan claimed hundreds of lives and displaced millions, droughts in China and the horn of Africa impacted millions, and Europe saw scorching heat waves and its worst drought in 500 years.

As an unstable and uneven economic recovery took form during 2022, global development faced a crisis. Slowing growth contributed to a reversal of progress on the global poverty agenda and an increase in global debt.

A global vaccination effort helped countries begin emerging from the pandemic and returned millions of children to the classroom, but the lasting impacts from recent learning losses could resonate for years. Food inflation and food insecurity rose significantly throughout the year, exacerbated by climate change and Russia’s invasion of Ukraine — contributing to higher food, fuel, and fertilizer prices.

Global economy in its steepest slowdown, says report

The confluence of crises that defined 2022 continue to hamper global growth. The global economy is now in its steepest slowdown following a post-recession recovery since 1970, with global consumer confidence already suffering a much sharper decline than during the run-up to previous global recessions.

The world’s three largest economies have been sharply slowing. Under the circumstances, even a moderate hit to the global economy over the next year could tip it into recession.

The Covid-19 pandemic dealt the largest setback to global poverty reduction efforts in decades, and the recovery has been highly uneven. By the end of 2022, as many as 685 million people could be living in extreme poverty - making 2022 the second worst year for poverty reduction in the past two decades (after 2020).

In addition to the lingering effects of the pandemic, rising food and energy prices — fueled by climate shocks and conflicts such as the war in Ukraine — have hindered a swift recovery. It is now projected that 7 per cent of the world’s population — roughly 574 million people — will still struggle in extreme poverty in 2030 — far short of the global goal of 3 per cent in 2030.

The past year saw the debt crisis of developing countries intensifying. Overall debt levels have increased for developing countries over the past decade, with some 60 per cent of the world’s poorest countries either in debt distress or at risk of it.

Over-encumbered with debt, the world’s poorest are not able to make critical investments in economic reform, health, climate action, or education - among other key development priorities. Perhaps more significantly, the composition of debt has changed dramatically since 2010, with private creditors playing an increasingly larger role.

By the end of 2021, private creditors held 61pc of the public and publicly guaranteed debt of low- and middle-income countries, according to the 2022 International Debt Report.

2022 was marked by a drastic rise in food insecurity around the globe. The war in Ukraine, high inflation, supply chain disruptions, and the global economic downturn all combined to drive large price increases for many agriculture products and inputs, such as fertilizers. In response to this situation, the World Bank Group has made $30 billion available to address food insecurity over a period of 15 months.

The World Bank Group continues to work with its partners to build food systems and can feed everyone, everywhere, every day by improving food security, promoting ‘nutrition-sensitive agriculture’ and improving food safety. The bank is a leading financier of food systems. In fiscal year 2022, there was $9.6 billion in new IBRD/IDA commitments to agriculture and related sectors.

The World Bank Group stepped up its support to help countries address climate and development needs together: delivering a record $31.7 billion in climate finance, the most ever in a single year in its history. Of this total, the World Bank delivered $26.2 billion, of which nearly half ($12.9 billion) specifically supported investments in adaptation and resilience.

The first half of 2022 showcased one of the largest shocks to global energy markets the world has seen in decades, sending energy prices soaring, exacerbating energy shortages and energy security concerns, and further slowing progress toward universal access to affordable, reliable, sustainable, and modern energy by 2030

Globally, 733 million people still have no access to electricity and, at the current rate, 670 million people will remain without electricity in 2030, 10 million more than projected last year.

Published in Dawn, December 19th, 2022