When we say a country is poor, what are the deciding factors?
When determining why a country is impoverished, various factors come into play.
Data from The International Monetary Fund reveals stark differences in per-capita purchasing power between the wealthiest and poorest nations. For instance, the average per-capita purchasing power in the ten poorest countries is less than $1,500, while in the ten richest countries, it exceeds $110,000.
Identifying a singular cause for long-standing poverty proves challenging.
Why Countries Stroll In Poverty
Factors such as corrupt governance, historical exploitation through colonization, weak rule of law, ongoing conflicts, adverse climate conditions, or hostile neighboring relationships can all contribute to a nation’s economic struggles. Moreover, these weaknesses often exacerbate each other, creating a cycle of deprivation.
For instance, a nation burdened with debt may lack the resources to invest in education, leading to a poorly educated workforce that further hampers economic progress.
The COVID-19 pandemic has exacerbated the challenges faced by underprivileged households globally. In the poorest nations, where informal employment is prevalent and social safety nets are lacking, the economic and social impacts have been particularly severe. Without adequate support systems or access to temporary financial assistance, businesses have struggled to stay afloat, and workers have faced unemployment.
The World Bank’s projections indicate that students in low and middle-income countries may suffer long-term economic repercussions, with potential losses of up to 10% in future average annual income.
The Poorest Nations Of The World
10. Yemen
With a population of approximately 35 million, Yemen is one of the poorest countries on the Arabian Peninsula. Since late 2014, it has been engulfed in conflict between the Saudi-backed government and the Houthi rebel movement. This war has resulted in significant loss of life, crippled the economy, and caused widespread destruction of infrastructure. As a consequence, over 80% of Yemen’s population now lives in poverty.
9. Madagascar
Despite gaining independence from France in 1960, Madagascar has faced recurring political instability, including violent coups and disputed elections.
President Andry Rajoelina, elected in 2019, pledged to combat corruption and poverty and boost economic development. However, poverty rates remain high at around 75%, with sluggish economic growth and nearly 8% inflation. Madagascar also ranks among the top 10 countries globally most vulnerable to climate hazards, such as droughts, floods, and cyclones.
8. Liberia
Africa’s oldest republic has long struggled with poverty. Hopes were high when former football star George Weah assumed the presidency in 2018, but his tenure was marked by high inflation, unemployment, and negative economic growth. In 2023, Weah was defeated in elections by opposition leader Joseph Boakai.
Economic growth has since restarted, with projections reaching about 5.3% in 2024 and remaining above 6% in subsequent years.
7. Malawi
Despite enjoying stable governance since gaining independence from Britain in 1964, Malawi faces significant economic challenges. A constitutional court annulled the 2020 general election results due to alleged vote tampering, leading to the swearing-in of Lazarus Chakwera as president.
However, structural changes have been slow, contributing to an economic crisis characterized by fuel shortages, food price surges, and currency devaluation. Over 70% of Malawi’s population is estimated to live below the international poverty line.
6. Niger
With 80% of its territory covered by the Sahara Desert and a growing population reliant on small-scale agriculture, Niger faces threats from desertification and food insecurity. Recurrent clashes with Boko Haram have displaced thousands. In 2021, Mohamed Bazoum became president in Niger’s first democratic transfer of power. Although the economy expanded by 12% in 2022, Bazoum was ousted and imprisoned by his presidential guard in 2023, leading to military rule.
5. Mozambique
Mozambique is rich with resources but remains among the world’s poorest countries due to severe climate conditions, political instability, and attacks by Islamic insurgent groups since 2017.
The economy has historically seen growth rates of over 7%, but challenges persist. The IMF projects economic expansion of around 5% in 2024 and 2025, with double-digit growth anticipated in the latter part of the decade.
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