## Countries Hurt by War and Fragility Need Strong Global Partnerships, Resources

_IMF Blog, December 22, 2022_

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## Bibliographic details
- Authors: Jihad Azour, Franck Bousquet, Abebe Aemro Selassie
- Published: December 22, 2022

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### Current situation and risks
- Fragile and conflict-affected states (FCS) are home to 1 billion people across more than 40 countries.
- These countries face long-standing challenges: poverty, low-capacity institutions, governance challenges, violence, and recent shocks from the pandemic and Russia’s invasion of Ukraine.
- Income per capita in fragile states is projected not to recover to 2019 levels until 2024.
- United Nations estimate: the number of forcibly displaced people increased to 100 million due to Russia’s war in Ukraine.
- The influx of almost 8 million Ukrainian refugees into neighboring European countries creates short-term fiscal costs and policy challenges for labor market integration and access to social services.

### Regional impacts and key statistics
- Sub-Saharan Africa
  - Home to about half of countries in the FCS category.
  - Consumer prices have increased by more than 20 percent on average this year.
  - Public debt is approaching 60 percent of gross domestic product.
  - Forecast: economic growth in seven countries—Burkina Faso, Central African Republic, Comoros, Eritrea, Mali, Nigeria, and Zimbabwe—will be below the regional average of 3.6 percent this year.
  - Food insecurity: 123 million people, or 12 percent of the region’s population, face acute food insecurity, equivalent to two-thirds of the worldwide total.
- Middle East and North Africa (MENA)
  - More than one-third of countries in the region are FCS.
  - Growth has remained sluggish at less than 1 percent.
  - Per capita GDP continues to decline.
  - Consumer prices are projected to rise by more than 30 percent on average this year.
  - Inflation will remain in double digits in 2023.
  - Public debt as a share of GDP is forecast above 60 percent.

### Priority 1 — Tailored multilateral engagement
- International financial institutions (IFIs) should remain engaged in stabilizing fragile and conflict-affected economies and fostering inclusive growth.
- Recent institutional developments:
  - African Development Bank updated its fragile states strategy.
  - European Investment Bank adopted its first fragile-states strategy.
  - World Bank and Asian Development Bank have taken similar steps since 2020.
  - IMF launched its Strategy for Fragile and Conflict-Affected States in March to strengthen support tailored to constrained policy space in these countries.
- Examples of IMF support:
  - Mozambique: program supports vulnerable households through cash transfers, including people forcibly displaced by conflict in the North.
  - Somalia: support to rebuild key economic institutions and foster stability and growth, including forthcoming debt relief under the Heavily Indebted Poor Countries Initiative with the World Bank.
  - Yemen: policy advice to help stabilize its economy and reduce food insecurity.

### Priority 2 — Financing is key
- Scale up financing to match challenges faced by FCS.
- IMF and global initiatives provided support during the pandemic:
  - FCS received $14.3 billion in IMF financing.
  - An additional $26 billion from last year’s IMF general allocation of special drawing rights.
- New and existing IMF instruments:
  - Resilience and Sustainability Trust to provide longer-term affordable financing to address structural challenges such as those brought about by climate change; potential additional source for eligible FCS.
  - Food Shock Window approved by the IMF’s Executive Board in September to help countries faced with food cost-related balance of payment problems.
- IMF policy advice, capacity development assistance, and financial support are coordinated with international partners.

### Priority 3 — Treating fragility as a global public good
- Fragility evolves and can affect middle-income countries via spillovers from neighboring conflicts.
- Scaled-up international support is critical for countries providing a global public good by hosting refugees and absorbing spillovers.
- Multilateral development banks have expanded assistance, including concessional financing to middle-income countries affected by spillovers, with examples cited including Colombia, Ecuador, Jordan, Lebanon, and Moldova.
- The international community must join forces to manage interconnected risks and strengthen its social contract with the most vulnerable countries.

*Source: Countries Hurt by War and Fragility Need Strong Global Partnerships, Resources (IMF blog, December 22, 2022).*

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## References

- [Fragile and conflict-affected states](https://www.imf.org/en/Topics/fragile-and-conflict-affected-states/work-on-fcs)
- [global public good](https://www.imf.org/en/Publications/fandd/issues/2021/12/Global-Public-Goods-Chin-basics)
- [projected](https://www.imf.org/en/Blogs/Articles/2022/01/21/fragile-and-conflict-affected-economies-are-falling-further-behind)
- [Consumer prices have increased](https://www.imf.org/en/Publications/REO/SSA/Issues/2022/10/14/regional-economic-outlook-for-sub-saharan-africa-october-2022)
- [make policy decisions](https://www.imf.org/en/Blogs/Articles/2022/12/15/europe-could-do-even-more-to-support-ukrainian-refugees)
- [Strategy for Fragile and Conflict-Affected States](https://www.imf.org/en/News/Seminars/Conferences/2022/03/18/strengthening-support-for-fragile-and-conflict-affected-states-fcs)
- [Mozambique](https://www.imf.org/en/Countries/MOZ)
- [Somalia](https://www.imf.org/en/Countries/SOM)
- [Heavily Indebted Poor Countries Initiative](https://www.imf.org/en/About/Factsheets/Sheets/2016/08/01/16/11/Debt-Relief-Under-the-Heavily-Indebted-Poor-Countries-Initiative)
- [Yemen](https://www.imf.org/en/Countries/YEM)
- [special drawing rights](https://www.imf.org/en/About/Factsheets/Sheets/2016/08/01/14/51/Special-Drawing-Right-SDR)
- [Food Shock Window](https://www.imf.org/en/About/FAQ/global-food-crisis-and-food-shock-window)
- [coordinated with our international partners](https://www.imf.org/en/News/Articles/2022/09/21/pr22313-second-joint-statement-by-the-heads-of-fao-imf-wb-wfp-and-wto-on-the-global-food-security)

_Source: https://www.imf.org/en/blogs/articles/2022/12/21/countries-hurt-by-war-and-fragility-need-strong-global-partnerships-resources_