Barring a miracle, the 2020s will prove to be what their ominous opening foreshadowed: a lost decade—not just for a couple of outliers, but for dozens of developing economies. Amid one of the densest clusters of global shocks since the 1970s, nearly one out of every two developing economies has failed since 2019 to advance on the most rudimentary promise of development: narrowing the income gap with the world’s most prosperous economies. For light at the end of the tunnel, you’d have to look to the 2030s.
That new decade is an eyeblink away—and it offers a historic opportunity the world cannot afford to squander. As the World Bank Group’s latest Global Economic Prospects report makes clear, the losses of the 2020s have been stark. Global growth this year will slump to its weakest pace outside of outright recession in close to 20 years—a meager 2.5 percent. By the end of 2026, one-quarter of developing economies, one-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 foreign assistance for their food supplies, but the world has seldom been in a less charitable mood than it is today. Government debt in developing economies has surged to all-time highs, meanwhile, and private investment growth in the 2020s has more than halved relative to the 2010s.
Yet on the horizon are three pockets of opportunity that could make the 2030s a golden era for job creation and growth. The first is impossible to miss: the rapid adoption of artificial intelligence (AI), even if it failed to live up to the hype, would by most accounts still boost global productivity rates above the paltry average of the 2020s. But if it is managed well, if its potential for good is maximized, our estimates suggest that global growth in the 2030s would surpass the average of the 2000s. AI would, in short, usher in the world’s most prosperous decade since the 1970s.
The second is energy security. The two major conflicts of this decade have concentrated the minds of policymakers. Clean energy now accounts for two-thirds of all global investment in energy. In 2025, global investment in clean energy reached a record $2.2 trillion, eclipsing fossil fuels by a wide margin. Over the past five years, most of the increase in clean-energy spending—as much as 70 percent—has been attributable to net importers of fossil fuels aiming to bolster energy security. Clean energy, in short, is now as much a national security imperative as it is a priority for global development. That convergence, if it holds, could speed up economic growth in developing economies—by creating jobs, expanding access to affordable power, and making them more resilient to future shocks.
The third is regional trade. Globalization might have lost its luster in some parts of the world, but regional trade is on the upswing. The number of regional trade agreements has surged over the 2020s, rising from slightly more than 300 in 2020 to nearly 400 today. Collectively, these agreements now account for 60 percent of global trade, up from 40 percent in 1990. That makes them a potent complement to the global rules-based system, given its diminished state. Regional trade is increasingly binding developing economies together—and bringing a much-needed measure of predictability, not just through tariffs but also through clear rules on investment, standards, and services.
Realizing these opportunities will not be easy. AI, for example, depends on digital infrastructure, computing capacity, and technical expertise—resources still concentrated in richer economies. Developing economies account for less than one-quarter of global data-center capacity; the world’s 24 poorest economies account for less than one-tenth of 1 percent. AI’s leading models, moreover, suffer from a major blind spot: the languages of roughly half the world’s people remain poorly represented in the data that trains the models. Unless such gaps are closed, the AI revolution could widen rather than narrow the gap between rich and poor countries.
Similar gaps exist in energy and trade. Since 2022, higher borrowing costs, rising inflation, and difficulties in connecting new renewable projects to electricity grids have slowed the pace of growth in clean energy investment. Such investment, moreover, has remained uneven. China, for example, accounts for nearly a third of the global share. But smaller economies struggling with high debt and tight government budgets, especially in Sub-Saharan Africa, have had a hard time mobilizing the capital necessary for clean-energy infrastructure. In the area of regional trade, developing economies still have significant gains to be reaped: they could trade much more with nearby economies, for example, if they cut red tape at borders, harmonized rules, and made it easier for firms—especially small businesses—to obtain financing. At the same time, investment treaties should shift from simply protecting investors toward making investment happen while advancing overall development and sustainability goals.
All of this, moreover, must happen while governments manage the immediate fallout of the conflict in the Middle East and return to the unfinished work of economic repair. Debt must come down. Inflation must stay contained. Food insecurity must recede. And countries must return to putting in place the pre-requisites for sustained job creation and rising living standards: stronger infrastructure, healthier and better-skilled workers, a regulatory environment that rewards investment, and deeper pools of private capital. Few challenges in modern times have required this degree of sustained global coordination and support.
The World Bank Group was created for exactly such a moment. In response to the historic setbacks of the 2020s, we responded on a historic scale: during the five-year period that ended June 30, 2025, we provided more in financing commitments to help developing countries than in any previous five-year period in our history. Today, we are helping developing economies confront the Middle East shock by providing immediate liquidity—up to $25 billion through existing instruments—to help them cope. We are bringing additional resources to bear by reprioritizing projects already in the pipeline. And we stand ready to do more if needed: if the conflict and economic fallout persist, World Bank Group financing could be increased to $80 to $100 billion over 15 months.
The first half of the 2020s are now behind us, and it is possible that this decade might already be lost. But the 2030s are not. The economic forces now gathering—AI, energy transformation, and deeper regional integration—are powerful enough to unlock transformative progress in the next decade. Seizing that potential, however, will require immense preparation, and it must begin now.
Source : World Bank
