Barring a miracle, the 2020s will prove to be exactly what their grim opening foretold: a lost decade — not for a handful of isolated cases, but for dozens of developing economies. Confronted with one of the largest clusters of global shocks since the 1970s, nearly half of all developing economies have failed, since 2019, to deliver on the most basic promise of development: narrowing the income gap with the world's more prosperous nations. To glimpse any light at the end of the tunnel, one must look to the 2030s. That decade is within reach and offers a historic opportunity the world cannot afford to squander.
As the World Bank Group's latest Global Economic Outlook makes clear, the losses of the 2020s have been severe. Global growth this year will fall to its weakest pace outside of a declared recession in almost 20 years — a modest 2.5%. By the end of 2026, a quarter of developing economies, a third of low-income economies and half of fragile and conflict-affected economies will be poorer than they were in 2019, on the eve of the Covid-19 crisis.
Among the 24 poorest economies, 19 still depend on external aid for food supply, yet the world has rarely been less well-positioned to provide it. Public debt in developing economies has reached record levels, and private investment growth in the 2020s has fallen to less than half the rate recorded in the 2010s.
Yet on the horizon, three opportunities are taking shape that could transform the 2030s into a golden era for job creation and growth. The first is undeniable: the rapid adoption of artificial intelligence. Even if AI falls short of expectations, it will still, according to most analyses, push global productivity rates above the modest average of the 2020s. But if managed well — if its potential for good is maximised — our estimates suggest that global growth in the 2030s will exceed the average recorded in the 2000s. In short, AI could usher in the world's most prosperous decade since the 1970s.
The second opportunity is energy security. The two major conflicts of this decade have focused the attention of policymakers. Clean energy now accounts for two-thirds of all global energy investment. In 2025, global investment in clean energy reached a record US$2.2 trillion, far surpassing fossil fuels. Over the past five years, the bulk of the increase in clean energy spending — approximately 70% — has come from net importers of fossil fuels seeking to strengthen their energy security. Clean energy is now as much a national security imperative as it is a global development priority. If this convergence holds, it could accelerate economic growth in developing economies by creating jobs, broadening access to affordable energy and making those economies more resilient to future shocks.
"The first half of the 2020s is already gone, and it is possible that this decade is already lost. But the 2030s are not. The economic forces now consolidating are powerful enough to drive transformative progress."
The third opportunity is regional trade. Globalisation may have lost its lustre in some parts of the world, but regional trade is on the rise. The number of regional trade agreements increased considerably during the 2020s, rising from just over 300 to nearly 400 today. Together, these agreements now account for 60% of global trade, up from 40% in 1990. This makes them a powerful complement to the rules-based global system, given its current fragility. Regional trade is increasingly binding developing economies together and bringing a much-needed degree of predictability — not only through tariffs, but through clear rules on investment, standards and services.
Seizing these opportunities will not be easy. Artificial intelligence, for example, depends on digital infrastructure, computing capacity and technical expertise — resources still concentrated in wealthier economies. Developing economies account for less than a quarter of global data centre capacity; the 24 poorest economies in the world account for less than one tenth of 1%. Moreover, leading AI models suffer from a significant gap: the languages of approximately half the world's population remain poorly represented in the data used to train those models. Unless these gaps are bridged, the AI revolution could widen, rather than narrow, the divide between rich and poor countries.
Similar gaps exist in the energy and trade sectors. Since 2022, rising borrowing costs, growing inflation and difficulties in connecting new renewable energy projects to electricity grids have slowed the pace of growth in clean energy investment. Furthermore, that investment remains unevenly distributed. China alone accounts for nearly a third of the global share. Smaller economies grappling with high debt and tight government budgets — particularly in sub-Saharan Africa — have struggled to mobilise the capital needed for clean energy infrastructure. In the area of regional trade, developing economies still have significant gains to unlock: they could trade far more with neighbouring economies, for instance, by cutting border bureaucracy, harmonising rules and facilitating access to finance for businesses, especially smaller ones.
At the same time, investment treaties must move beyond merely protecting investors and become effective in enabling investment while simultaneously advancing broader development and sustainability objectives. All of this must happen while governments manage the immediate fallout from the conflict in the Middle East and resume the unfinished work of economic recovery. Debt needs to be reduced. Inflation needs to be brought under control. Food insecurity needs to ease. And countries need to restore the preconditions for sustainable job creation and rising living standards: more robust infrastructure, healthier and better-skilled workers, a regulatory environment that rewards investment and larger reserves of private capital. Few challenges in the modern era have demanded this degree of sustained global coordination and support.
The World Bank Group was created precisely for a moment such as this. In response to the historic setbacks of the 2020s, we have responded at historic scale: during the five-year period ending 30 June 2025, we provided more in financing commitments to help developing countries than in any other five-year period in our history. Today, we are helping developing economies navigate the Middle East shock by providing immediate liquidity — up to US$25 billion through existing instruments — to help them manage the situation. We are mobilising additional resources by reprioritising projects already under way. And we stand ready to do more if needed: should the conflict and its economic consequences persist, World Bank Group financing could be scaled up to between US$80 billion and US$100 billion over 15 months.
The first half of the 2020s is already gone, and it is possible that this decade is already lost. But the 2030s are not. The economic forces now consolidating — artificial intelligence, energy transformation and deeper regional integration — are powerful enough to drive transformative progress in the decade ahead. Yet seizing that potential will require immense preparation, and it must begin now.
Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/?p=528380
