The onset of this decade has been marked by a surge in conflicts worldwide, with the number of conflicts and related fatalities having more than tripled since the early 2000s. These intensifying conflicts are causing severe and long-lasting economic damage. Currently, there are 39 economies classified as fragile and conflict-affected situations, with more than half of them facing active conflict. Due to the escalation of conflicts, global poverty and food insecurity are predominantly concentrated in these economies.

Poverty and Conflict

In these economies, close to 40% of the population lives in extreme poverty. According to the 2024 Global Multidimensional Poverty Index, out of 1.1 billion people living in acute poverty, 455 million resided in countries experiencing war or fragility. In 2025, although these regions accounted for less than 15% of the world’s population, they were home to 421 million people living in extreme poverty, more than the total in the rest of the world. Estimates indicate that by the end of this decade, nearly three-fifths of the global extremely impoverished population, approximately 435 million people, will be living in these economies.

As the conflict has intensified, food insecurity has also risen sharply, with approximately 200 million people, accounting for 18% of the population in these regions, facing acute food insecurity. Countries affected by conflict often experience high levels of poverty and ongoing conflict slows progress in poverty reduction. Poverty, in turn, interacts with other underlying grievances to fuel instability, while conflict further deepens economic hardship.

United Nations Security Council

At a United Nations Security Council open debate in New York, U.N. Secretary-General António Guterres emphasised how poverty can fuel conflict.

He said: “Poverty breeds despair. Despair fuels unrest. And unrest tears at the fabric of societies — feeding mistrust, fear and violence.” Conflict, in turn, weakens already weak institutions and exacerbates poverty and food insecurity. In cases of severe conflicts, after five years, the GDP per capita drops by around 15%. It has also negatively impacted employment creation and average life expectancy.

In this manner, conflict and poverty become mutually reinforcing, creating a vicious cycle. A World Bank report suggests that although these countries face significant challenges, they have untapped potential that could reignite growth with effective policymaking. One such advantage is having a large working-age population. By 2055, around 60% of the population in areas affected by conflict or instability will be of working age, larger than anywhere else in the world.

Transforming this into growth would require investment in education, health care, infrastructure and the private sector to create employment opportunities.

Breaking the Cycle

The World Bank, through its programs, aims to provide basic services, foster development opportunities and create employment in these economies by remaining engaged during conflict and after to assist in recovery and transition. The Adaptive Social Protection for Increased Resilience Project (ASPIRE) in Haiti and the National Community-Driven Development Project in Myanmar are two notable examples.

The ASPIRE program in Haiti supports nearly 23,000 households in the department of Grand’Anse. As Haiti continues to struggle with conflict and political instability, the initiative helps strengthen its ability to cope with recurring shocks by providing it with a monthly cash transfer. The program also aimed to provide training on financial literacy and health and hygiene practices to 50% of households. It helped identify more than 100,000 vulnerable households, enabling targeted investments. It not only addressed immediate challenges but also laid the groundwork for future investments in human capital.

The National Community-Driven Development Project in Myanmar, which comprised 37,000 sub-projects, positively impacted more than seven million people in the country. Nearly a fifth of the country’s population benefited from the improved infrastructure, transportation, water supply, education and electrification. Although the World Bank halted the disbursements of the Myanmar Partnership Multi-Donor Trust Fund in 2021, it continued to monitor the situation and provide analyses.

Final Remarks

Addressing conflict can lead to growth only when immediate humanitarian needs are met and paired with long-term investment in human capital. Through the ASPIRE program in Haiti and the development project in Myanmar, the World Bank routed investments toward education, health care and infrastructure. In doing so, the World Bank sought to break the vicious cycle of conflict and poverty.

– Priya Doshi

Priya is based in Edinburgh, Scotland and focuses on Good News and Politics for The Borgen Project.

Photo: Wikimedia Commons