The new World Bank report, Fragile and Conflict-Affected Situations: Intertwined Crises, Multiple Vulnerabilities (2025), paints a sobering picture of the world's most vulnerable economies. Fragile and conflict-affected situations, or FCS, are defined in this report as states where weak institutions, long-term conflict, and overlapping crises describe how failures in governance sustain fragility and have generated deep structural challenges. They are further exacerbated by natural disasters, global economic shocks, and commodity price variability that contribute to local struggles and incorporate environmental perspectives on the previous challenges. Demonstrates climate change exacerbates fragility in addition to the economic shocks and generates new challenges for millions of people living in poverty and instability. For a significant number of nations, fragility is not a temporary stage but a long-term condition. Nearly three-quarters of the economies on the FCS list have been listed for more than a decade. It has not been easy for these economies to escape their status, in large part due to the feedback loop of conflict and weak governance. Violence has become more frequent and increasingly deadly, demonstrating how conflicts are financed and resources are diverted, with the number of conflicts and intensity tripling or more since the early 2000s. The economic consequences are serious. Countries in armed conflict usually suffer (an average) drop of 20% of per capita expected income over five years. These declines are not simply momentary slips but major shocks that will restrict growth and slow recovery for possibly decades. The staggering impacts occur behind the numbers. Today, four in ten people in fragile states are living in extreme poverty. By 2030, these countries are projected to represent almost 60%, growing from 50% in 2024, of total extreme poverty global totals. Food insecurity is rampant, with about 200 million people living in fragile economies suffering from acute hunger. Associates hunger with displacement of persons. Associate hunger and poverty with displacement pressures. It will feel organic given that hunger and displacement often affect women and girls most. Thus, gender inequality makes sense as the next point to discuss. Women and girls equally limited in access to education, preventive and curative healthcare, and economic resources are further eroding human capital.

At the same time, primary health and education effects remain stable with global norms. Compared to other developing countries, infant mortality is two times as much, life expectancy is seven years lower, and many children completed just six years of schooling. Links education, the youth population, and challenges for future employment. Illustrates how lack of digital access exacerbates barriers to education and economic participation. The already fragile health systems usually collapse under the stress of conflict. Makes visible vulnerability due to epidemics and health shocks at scale. Financial distress adds to economic fragility. Connects the constraint fiscal weakness represents, where revenue-generating activities can be crowded out, to contributing to unemployment and urban instability. Nearly 70 percent of the conflict-affected and fragile states are at serious risk of debt difficulties. A small-sized fiscal measure by the government cannot respond to crises and invest in essentials for people's lives, including health, education, and infrastructure. Indicates that external assistance is insufficient without institutional reform. Without these fiscal measures to imply, such economies will be determined by every shock. Nonetheless, fragile economies, despite their dire statistics, are hopeful. A number are resource rich, have youth and growing populations, and could create high-potential sectors like tourism once peace and stability return. Gives an explanation for the reason for limited investment and how reforms could unlock potential. With peace and good governance, those advantages could turn into powerful forces of growth and resilience. Domestic action and international aid are required to end fragility. Some important priorities given by the World Bank are reducing conflicts, improving governance, widening access to important services, and supporting private sector investment. Critical impacts on global partners, supported finance, debt relief, and long-term technical assistance. Demonstrates how remittances help households in fragile economies. Human capital investment will lead to rebuilding strength, especially in health and education.

Details The departure of a skilled workforce curtails recovery. No matter how much is invested, the development of infrastructure is also important to link communities, stimulate trade, and allow economic participation. Signals because poor infrastructure is a barrier to growth. Supporting private enterprise could generate employment for an expanding youth bulge and mitigate some of the risks of instability. The difficulties confronting fragile and conflict-affected economies are not restricted to those countries. By the year 2030 most of the world’s extreme poor will live in fragile, conflict-affected countries. Disputes affect other countries, humanitarian disasters, disruption in trade routes, and undermining other economies. Describes why regional collaboration is important Emphasizes the idea that fragility does not confine itself to borders. Thus, global progress towards the sustainable development goals is bound to enhance fragile conditions. There are successful countries like Rwanda and Nepal showing that recovery is possible through strong efforts and peacebuilding institutes and stable international engagement; conflict-affected states can move from fragility to resilience and equitable growth. Links it back to the objectives of global development. Economies that come across fragility and conflicts are at a crucial phase; without notable advancements and sustained international aid, millions more will lose financial stability, hunger, and certainty. Stresses the cyclical nature of fragility and emphasizes the importance of coordinated long-term action. With effective policies, investments, and joint ventures, these countries can mobilize their potential.

Resolving fragility is not only the role of humanitarian action but also important for international security and economic equality. The country is experiencing fragility and conflicts through a multifaceted issue that hinders development and undermines social security. Prolonged hostilities, weak institutions, and state capacity constraints prevent governments from providing necessary services and developing trust from their people. Nevertheless, fragile economies have considerable promise. Most have ample resources, young populations, and positive geographical conditions that can enable economic expansion through expertise in governance, laws/rules, and the private sector to fulfill that promise. Worldwide support, including technical partnerships, trade facilitation, and collaborative expertise programs, can enhance reforms and improve adaptability.

Afrin- Master of Economics, Madras Univesity-Chennai.