Last week's meetings of the International Monetary Fund and World Bank offered no new answers for the developing world to questions raised by the spreading war in the Middle East, the continuing war in Ukraine, rising debt payments and the potential for an AI bubble.
Once again, lower-income countries are being hit by the spillover effects of actions taken by wealthier nations, including rising debt-servicing costs, higher inflation and the risk of falling further behind economically as a result of the AI boom.
Instead, they received the familiar advice from global lenders: reduce fiscal deficits and accelerate economic reforms to attract more private sector investment.
Kristalina Georgieva, the first IMF chief from a developing country, Bulgaria, said advanced economies were actually the worst offenders when it came to budget imbalances. She noted that developing countries' debt levels had fallen in recent years, only for surging bond yields elsewhere to drive up their borrowing costs.
Average debt-servicing payments in developing countries had more than doubled over the past decade to 14% of government revenue, crowding out spending on education, healthcare and other critical areas, she said.
Advanced economies focused on their own problems
Speaking at a panel on Saturday, Georgieva said many issues remained unresolved, particularly those surrounding AI.
"We are in a place where we have many more questions than we have answers. And my alert to everybody is: Do not fall for the guys that pretend they have the answers. They are tricking you."
Josh Lipsky, vice president of international economics at the Atlantic Council think tank, said the meetings had missed an opportunity to provide guidance or identify ways to help.
"It's hard to talk about the developing world when the advanced economies don't have their act together and are at risk of a fiscal crisis," he said. "And that's on top of political situations in many of these countries that makes development aid not a priority at the moment."
Mauricio Cardenas, Colombia's former finance minister and now a research scholar at Columbia University's School of International and Public Affairs in New York, said many policymakers were left with a deep sense that "something really bad could happen", but without a clear roadmap for navigating the future.
"The IMF and World Bank are not particularly well prepared for this new phase. They understand that something is going on, they bring in experts on AI," he said. "But in the end, there's no kind of specific, concrete advice on how to be prepared for something where you don't really understand how it's going to unfold."
Geopolitical tensions that have strained both institutions since Russia's invasion of Ukraine in 2022, complicating coordinated action, were also evident in Bangkok, where nearly half the delegates at an IMF steering committee meeting walked out when Russia's finance minister spoke.
Houthi attacks on Riyadh airport delayed the arrival of the committee's head, Saudi Finance Minister Mohammed Al-Jadaan, who had to travel overland to Qatar to catch a flight.
Bangkok itself offered a stark reminder of the challenges facing developing countries, as parts of the city remained under water following September floods that caused almost $200 million in damage to Thailand's industrial sector.
Rising inequality could raise costs in the long term
Kate Pickett, a professor at the University of York, urged policymakers to focus on more inclusive growth rather than forcing developing countries to undertake tough structural reforms.
"If inequality increases, if poverty deepens, that will increase their costs in the long term," she said. "It's not enough to describe an economy as resilient. It's only resilient for the rich and the privileged."
Ayhan Kose, deputy chief economist at the World Bank, said the global economy had weathered its biggest energy shock, caused by the US-Israeli war on Iran, better than expected.
However, while a global recession had been avoided, growth prospects in both developing and advanced economies were worse than before.
Growth had already slowed in half of advanced economies, while in developing countries as a whole, it had fallen significantly to around 3.6% from 4.4%.
"People are really worried because resilience today is not a guarantee for resilience tomorrow," he said. "Now they are worried about what will be the next shock, because every six months, if not every three months, there is a new shock."
Although no specific initiatives were announced, he said the World Bank remained focused on helping developing countries prepare for advances in AI, partly by mobilising more private capital, which was now three times the level recorded in 2022.
However, the bank also has to contend with sharp declines in official development aid and persistent challenges in attracting foreign investment to developing countries.
"The reality on the ground is the reality on the ground," he said.