Rich-poor division might exacerbate developing world poverty: World Bank chief

GANDHINAGAR: At a G20 finance ministers conference in India on Tuesday, the new World Bank director warned that rising divides between rich and poor nations risked deepening poverty in the developing world.

After the coronavirus outbreak and Russia’s war in Ukraine, global petroleum and commodity prices plummeted, many countries are still recovering.

Climate change is hardest for the poorest nations.

After Russia refused to prolong a Black Sea grain export contract on Monday, the UN said millions of the world’s poorest will “pay the price” at the G20 summit.

South African Finance Minister Enoch Godongwana warned it was “likely to have an impact on food prices, which will more heavily impact poorer nations”.

German central bank director Joachim Nagel told AFP it was “really strange” to be holding talks “discussing how to help the vulnerable countries” as Russia withdrew from the grain deal.

World Bank president Ajay Banga warned that stagnation could split the global economy.

“The thing that keeps me up at night is a mistrust that is quietly pulling the Global North and South apart at a time when we need to be uniting,” Banga said the two-day finance ministers and central bank chiefs meeting in Gandhinagar, Gujarat.

“Global South frustration is reasonable. After being nominated by US President Joe Biden, Indian-born Banga, a naturalised American citizen, assumed the bank post last month.

“When they should ascendant, they’re concerned promised resources will be diverted to Ukraine’s reconstruction, they feel energy rules aren’t applied evenly, constraining ambition, and they’re worried the grip of poverty will pull down another generation.”

Banga told AFP that developing nations had the most young people, but they needed education and jobs to succeed.