How colonialism and wars keep 26 countries poorest in the world

Burundi, a country in East Africa, has been identified as the world’s poorest country in the latest World Bank report.

The nation of over 12 million people has faced economic woes for over two decades, with the lowest GDP globally and an inability to repay debt, even with low-interest loans from institutions like the International Development Fund (IDF).

In its damning report, the World Bank has identified 26 of the world’s poorest countries, characterised by the lowest per capita incomes.

The majority are in Africa, with exceptions such as Afghanistan, Iraq, Syria and North Korea from the Middle East and Asia. Such grim are their circumstances that it would take them “more than a century” to alleviate poverty.

In total, around 500 million people are grappling with extreme poverty. Experts consulted by TRT World attribute this stagnation to a lack of robust institutions and inadequate public and economic infrastructure, which they see as the primary obstacles to growth and development in these nations.

But what caused the stagnation?

Experts point to colonialism as a major factor, explaining that it has left most of these 26 countries struggling to repair their broken infrastructure, which has led to a bleak economic future.

“Empires extracted immense wealth, even if some of them didn’t put that wealth to particularly productive use, like Spain, while settler colonies just enclosed land which later became hugely valuable,” William Booth, a professor in Latin American History at the University College of London, tells TRT World.

Booth, who has expertise in colonialism, said that the presence of colonial powers in places like Africa and Latin America ensured that their subjects did not evolve in any of the spheres – be it religion, politics or basic civic life.

Nobel laureates Daron Acemoglu and James A. Robinson point to a new dimension centred around colonialism and poverty of today.

In their latest book, Why Nations Fail, Acemoglu and Robinson provided compelling evidence on how the institutions established during European colonisation continue to influence prosperity today.

The countries that were relatively wealthier at the time of colonisation are now among the poorest, they argued in the book, finding a correlation between the heavy loss of human capital - as a result of mass slaughter carried out by colonial forces – and stunted economic growth that continues to affect the GDP of these countries today.

The government debt of the 26 countries recently identified by the World Bank stands at 72 percent of GDP, the highest figure in 18 years.

Then external factors such as the Covid-19 pandemic or protracted conflicts or both made matters worse. Most of these countries depend on grants or low-interest loans from bodies like the International Development Association.

The war on Ukraine has also diverted much of the aid away from these countries as Ukraine has become a priority for Western donors, making the financial bail-out difficult.

What makes poverty intractable in these nations?

Many of these countries lack sufficient natural resources, and their economies rely heavily on dated agricultural practices, which makes them vulnerable to climate change.

High rates of disease and malnutrition also impact labour productivity. Corruption plays a significant role as well, with officials often hoarding wealth instead of investing it in infrastructure, healthcare, and other critical services.

“Poverty in Africa is a multi-dimensional problem, influenced by various factors including climate risks, conflict prevalence, colonial legacies, and poor health and education systems,” says Christopher Vandome, Research Fellow at Chatham House.

“At the core of this issue are the evolution and effectiveness of political and economic institutions, which set the rules governing economic and political activity.”

Ovigwe Eguegu, Policy Adviser at Development Reimagined, echoes a similar view, saying that short-term measures like financial aid leave the structural problems unaddressed.

Eguegu tells TRT World, “What countries need for economic development is capital accumulation, in the form of trade, and investment into capacity building across industries.”

Vandome says donor nations contributing to international aid organisations have become more aware of the impact of their intervention.

“They realise it can be damaging as well as productive. Significant amounts of aid money end up with international consultants overseeing administrative functions rather than on the ground being productive,” he says.