In the complex landscape of the global economy, numerous countries are grappling with daunting hurdles that have triggered significant disruptions in their economic systems. Without a particular ranking, these ten nations are embarking on a challenging journey as they seek to achieve sustained economic growth and prosperity.
1. Russia
Russia’s economy has struggled for 15 years due to weak institutions characterized by a fragile rule of law, inadequate protection of property rights, and pervasive corruption. The nation has been subjected to extensive sanctions from the West since the Ukraine conflict, resulting in restricted access to foreign reserves, banking networks, technology, and energy markets.
As a consequence, Russia has grappled with high inflation, a deep recession, shortages, and escalating prices. With diminishing reserves and growing isolation, the economy is ill-equipped to navigate this closed-off status. According to the World Economic Outlook April report, Russia ranks at the bottom of the global average GDP ranking, experiencing an average decline of -8.5% from 2018 to 2022.
2. Ukraine
Ukraine’s economy has been profoundly impacted by the conflict with Russia. The World Bank forecasts a contraction of up to 45% in 2022. Vital export routes and trade have been disrupted, leading to a ban on grain and staple exports for food security. Ukraine is seeking financial assistance to offset the impact of closed debt markets.
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The costs of reconstruction are estimated at $349 billion, with rising poverty rates and a projected budget deficit of $38 billion in 2023 due to reduced tax revenues. Ukraine’s global average 5-year GDP ranking has declined by -35%.
3. Syria
Since 2011, Syria’s economy has endured severe hardship due to its ongoing civil war. The conflict has led to a substantial reduction in oil production and exports, which were crucial sources of revenue for the nation. Infrastructure, including factories and businesses, has been ravaged, and millions of people have been displaced.
According to the United Nations, the economic losses inflicted by the war on Syria exceed $400 billion. The International Monetary Fund (IMF) does not incorporate the country’s finances or politics into its financial projections due to their dire and uncertain nature.
4. Afghanistan
Decades of conflict and instability have taken a heavy toll on Afghanistan’s economy. The spread of the COVID-19 virus and the withdrawal of foreign troops have further compounded the country’s woes. Wars have obliterated entire cities, displaced millions, and decimated critical infrastructure, including businesses and factories.
A United Nations Development Programme (UNDP) report from December 2022 reveals that the Afghan economy lost $5 billion since August 2021, erasing a decade’s worth of progress. Afghanistan has long grappled with dependence on foreign development and humanitarian aid, particularly to fund essential public services like healthcare, education, energy, sanitation, shelter, and food assistance. The GDP per capita of Afghanistan has consistently remained low compared to other countries. Similarly, like Syria, the IMF does not include Afghanistan in its economic projections.
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5. Belarus
Belarus has been mired in economic challenges due to a poor rule of law, inadequate protection of property rights, and widespread corruption. Moreover, since the contentious 2020 presidential election, the West has imposed severe sanctions on the country.
These sanctions have left Belarus unable to access its foreign currency reserves, financial systems, technological advancements, or energy markets. Consequently, the nation has witnessed significant inflation, a severe economic downturn, shortages of essential goods, and price increases. Belarus has limited crude oil reserves and relies heavily on subsidized crude oil and natural gas imports from Russia. According to the World Economic Outlook’s April report, Belarus has an average 5-year GDP growth rate of -0.0%.
6. Solomon Islands
Despite being rich in timber and underdeveloped mineral resources, including lead, zinc, nickel, and gold, most of the population in the Solomon Islands relies on subsistence farming, fishing, and artisanal logging. It remains one of the poorest places in Asia. The COVID-19 pandemic has significantly impacted the country, adversely affecting tourism and other industries. According to the World Economic Outlook’s April report, the country’s average 5-year GDP growth stands at -0.7%.
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7. Tonga
Tonga’s small size, isolation, and vulnerability to natural disasters have contributed to its recent economic struggles. Remittances from Tongans living abroad constitute over one-third of its GDP. Following remittances, tourism serves as the primary source of foreign exchange revenues.
Most of the country’s food supply is imported, primarily from New Zealand, resulting in trade deficits and a growing dependence on imports. Between 2018 and 2022, Tonga’s GDP averaged -0.1%, as reported by the World Economic Outlook.
8. Micronesia
Micronesia faces an uncertain economic future due to its reliance on U.S. aid and the lackluster performance of its small and stagnant private sector. The islands possess few minerals of commercial value, and their isolation, inadequate infrastructure, and limited domestic air and sea transport hinder tourism potential. In the five years leading up to 2022, the country’s GDP averaged -0.8%.
9. Samoa
Samoa has traditionally depended on foreign aid, remittances from overseas relatives, tourism, agriculture, and fishing to sustain its economy. Although employing only about 6% of the workforce, the industrial sector contributes nearly 22% of GDP. It transitioned out of the Least Developed Country status in January 2014. Samoa’s GDP averaged -1.5% over the past five years ending in 2022.
10. Estonia
Estonia boasts a modern market-based economy with a relatively higher per capita income than Central Europe and the Baltic region. However, its heavy reliance on trade makes it vulnerable to external shocks. The average 5-year GDP growth rate ending in 2022 stands at 2.8% for Estonia.
