A new report released by the World Bank on Sunday indicates that the 26 poorest countries globally are home to 40% of the world's poorest people, with debt levels reaching their highest since 2006 and increasing vulnerability to natural disasters and other shocks.

The report found that the current average poverty levels in these economies are higher than they were on the eve of the COVID-19 pandemic, while the rest of the world has largely recovered from the pandemic and resumed growth trajectories.

Released a week before the annual meetings of the World Bank and the International Monetary Fund in Washington, the report confirms significant setbacks in efforts to eradicate extreme poverty and highlights the World Bank's efforts to raise $100 billion this year to replenish its financing fund for the world's poorest countries—the International Development Association (IDA).

The World Bank stated that the average annual income per person in the 26 poorest economies is less than $1,145, and due to the near-drying up of market financing, they are increasingly reliant on IDA grants and loans with near-zero interest rates. Their average debt-to-GDP ratio stands at 72%, the highest in 18 years, with half of the countries either in debt distress or at high risk of debt.

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The report states that two-thirds of the 26 poorest countries are either in armed conflict or struggle to maintain order due to institutional and social fragility, which hinders foreign investment and nearly all export commodities, causing them to frequently cycle through periods of boom and bust.

World Bank Chief Economist Indhira Rajah said in a statement: "As most of the world moves away from the poorest countries, the IDA has been their lifeline. Over the past five years, it has invested most of its financial resources in 26 low-income economies, helping them weather historic setbacks."

The IDA is typically replenished every three years, funded by the World Bank's shareholder countries. In 2021, the IDA raised a record $93 billion, and World Bank President David Malpass aims to raise over $100 billion by December 6th, surpassing this figure.

Over the past decade, natural disasters have also caused greater losses to these countries. The World Bank stated that between 2011 and 2023, annual losses due to natural disasters accounted for 2% of GDP, five times the average loss of lower-middle-income countries, indicating a need for more investment.

The report also suggests that these economies take more measures to help themselves, as they have a large informal sector operating outside the tax system. This includes improving tax collection by simplifying taxpayer registration and tax administration, and increasing the efficiency of public spending.