‘No time to recover’: UNDP chief sounds alarm on growing poverty after Iran war shock

Global Economic Turmoil Threatens 130 Million More Lives; UNDP CEO Cites Widening Poverty Risk in Iran War Aftermath

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• Since the United States initiated military action in Iran, global fuel prices have surged, disrupting major oil and natural gas supplies worldwide.
• Developing nations confront mounting fiscal challenges, depending heavily on subsidies to mitigate energy cost spikes while operating with constrained budgets.

Updated 2 min 55 sec ago

October 15, 2026 08:34

BANGKOK: As global energy costs soar following the U.S. military engagement in Iran, an intensifying El Nino phenomenon and rising interest rates could push millions into poverty, warned UN development chief Alexander de Crocou while reporting to AFP. Surges in fuel prices began after the United States launched its war campaign in Iran in late February, and Tehran’s retaliatory moves have curbed critical oil and natural gas exports.
Fiscal deficits and soaring debt‑to‑GDP ratios have accumulated since the 2008 financial crisis, compelling governments to battle a succession of shocks—incl. pandemics, conflicts in Ukraine and the Middle East—leaving little time to stockpile reserves before new crises arrive.

“You must repair the roof while the house is on fire,” de Crocou explained at the IMF‑World Bank Annual Meetings in Bangkok, stressing that many emerging economies attempt reconstruction under extreme pressure. When resources dwindle, societies cannot afford extended recovery periods.

The IMF issued a warning this week that while global expansion holds up thanks largely to AI‑driven technology investment, poorer nations excluded from that boom remain precariously stuck. IMF chief Kristalina Georgieva phrased the outlook starkly: “Winter is coming”—a nod to the Game of Thrones reference signifying an imminent catastrophe if preparation fails. De Croc reinforced that wealthier states sit with ample cash buffers, while many developing regions lack basic safety nets, leading them to flounder successively from one crisis to another.

If current policies misfire, the damage could be devastating. A fresh UNDP report projects that roughly 130 million people stand on the cusp of poverty if energy and food price rises occur without meaningful subsidy relief. South and East Asian societies, together with sub‑Saharan populations, are singled out as especially at risk.

“The difficulty is immense,” noted the UNDP, whose analysis highlights that middle‑income nations now allocate roughly nine point five percent of government revenue to interest service—twice that of high‑income peers—and leaves little room for alternative fiscal measures.

Beyond the macroeconomic strain, the upcoming El Nino event is projected to be the strongest on record, bringing floods, droughts and other climatic extremes that may peak in early 2027. Private capital is therefore called upon to bridge the gap left by deteriorating state capacity. De Croc argued that fighting the worst effects of climate change carries clear economic remuneration.

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