Gap between rich and poor nations grows wider: UN report
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United Nations: The divide between wealthy and poorer nations is widening further as key commitments made last year—including reforms to major global financial institutions—remain largely unfulfilled, according to a new United Nations report.
The report evaluates progress on the development blueprint adopted in Seville, Spain, in June last year, aimed at reducing inequality and achieving the UN’s 2030 development goals. It was released ahead of next week’s spring meetings in Washington of the International Monetary Fund and the World Bank, which play central roles in promoting global economic growth.
IMF Managing Director Kristalina Georgieva said the institution had been prepared to support global growth, but the Iran war has since darkened the economic outlook.
Li Junhua warned that rising geopolitical tensions are making it harder for developing countries to secure financing. “This is an extremely perilous time for international cooperation,” he said, noting that geopolitical factors are increasingly influencing economic relations and financial policies.
The report also highlighted rising trade barriers and recurring climate-related shocks as major contributors to the widening gap.
At last year’s Seville conference, leaders from many countries—excluding the United States—unanimously adopted the Seville Commitment, aimed at bridging a USD 4 trillion annual financing gap for development. The plan called for increased investment in developing nations and reforms to the global financial system, particularly the IMF and World Bank.
UN Secretary-General Antonio Guterres has repeatedly urged major reforms, criticising the IMF for favouring wealthy nations and the World Bank for failing to meet its mandate, especially during the COVID-19 pandemic, which left many countries heavily indebted. His concerns reflect broader frustration among developing nations over the dominance of the United States and its European allies in decision-making at these institutions.
The report describes the Seville Commitment as “the best hope” for closing the growing financial gap. However, progress has faltered. In 2025, 25 countries reduced development assistance to poorer nations, resulting in a 23 per cent overall decline from 2024—the steepest annual drop on record. The largest reduction, at 59 per cent, came from the United States.
Preliminary data indicates a further 5.8 per cent decline in aid is expected in 2026.
The report also pointed to tariffs—including those imposed by US President Donald Trump—as having a significant impact on developing economies. Average tariffs on exports from the world’s poorest nations surged from 9 per cent to 28 per cent in 2025, while tariffs on developing countries, excluding China, rose from 2 per cent to 19 per cent.
The findings underscore mounting challenges to global cooperation and highlight the urgent need for meaningful reforms to address deepening economic inequalities worldwide.
With PTI inputs