According to the fund, support should be focused on grants and concessional lending for the poorest and vulnerable countries, and attracted to the extraction of private investment in lower-income, more developed countries.
Two articles by his researchers, Guillaume Chabert and Robert Powell, have won the title "The Poorest Countries and the Vulnerable States," and states that the important shocks that the global economy has held over the past five years have the most people in low-income, vulnerable, vulnerable, conflict-related states.
The recovery of total ingress and outflows in low-income countries remained the threshold country economy, which revived a major difference in 2021.
Among the low-income countries defined as 70 countries questioned by IMF concession loans (trust in poverty reduction and growth), 38 people with higher incomes, different exports and access to international capital markets compared to an average of 5.3%. This is compared with 3.3% in the poorest 32 in the group. It was only 2.6% in vulnerable and conflict situations.
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The poorest countries and vulnerable states are increasingly receding
Support for developing countries should focus on grants and highly confessional loans for the poorest and vulnerable countries, supporting more advanced crowds of foreign investment and private finance.
Guillaume Chabert, Robert Powell
The significant shocks that the global economy has hit worldwide over the past five years have mostly dedicated ordinary existence in countries with low-income, vulnerable and conflicted states.
The recovery of total ingress and outflows in low-income countries remained the threshold country economy, which revived a major difference in 2021. Of the low-income countries defined as 70 countries questioned by IMF concession loans (trust in poverty reduction and growth), 38 of the higher incomes, different exports, and higher advanced incomes with 5.3% international capital access, were achieved. As this week's figure shows, this is compared to 3.3% of the 32 poorest people in the group. It was only 2.6% in vulnerable and conflict situations.
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In the meantime, funding flows to developing countries, particularly for low-income people, have declined significantly since the start of the pandemic, but these countries face a major need to fund important spending such as education, health and infrastructure. It is important to reverse this trend and ensure that developing countries receive repeat rivers with sufficient new and affordable funding. Furthermore, the weaknesses of debt should be addressed proactively.
For the wealthier developing countries, the focus should be on helping them attract more foreign investment and international private finance, with the support of bilateral and multilateral partners where needed. For the poorest and fragile countries, adequate financial support through grants or highly concessional loans is critical, alongside technical assistance to build further institutional capacity. Further improvements in restructuring processes are also needed to deliver efficient and timely debt restructuring for countries where debt is not sustainable.
Building institutional capacity
Strengthening public financial management, efficiency of spending, and tax capacity—the policy, institutional, and technical capabilities to collect tax revenue—is part of a deeper process of building institutional capacity. While developing countries have made some progress in raising additional government revenue in recent decades, much more is needed. A 7 percentage-point increase in the ratio of tax revenue to economic output is feasible for low-income countries through a combination of tax system reform and institutional capacity building, according to IMF research published in 2023.
For its part, in addition to economic surveillance and concessional lending, the IMF has expanded its capacity development work with low-income countries. Between 2022 and 2024, this group of countries received over 40 percent of the IMF’s overall capacity development with its member countries. More broadly, the IMF will continue to help its members achieve economic and financial stability, which is a prerequisite for reaching their development objectives. It will do so by using the whole range of its tools including policy advice, capacity development, and balance of payment financial support where relevant.
The international community can help by intensifying efforts to provide technical and financial assistance, including grants and concessional loans, and timely debt restructuring where needed. It could also develop risk-sharing instruments to attract more participation by private investors where appropriate. Given the higher costs associated with private finance, developing countries should ensure that private debt is incurred in a sustainable manner.