Economics & Development

The Systematic Country Diagnostic (SCD) covers a group of nine small Pacific Island Countries (PIC9) - Kiribati, Marshall Islands, the Federated States of Micronesia, Nauru, Palau, Samoa, Tonga, Tuvalu, and Vanuatu. The document updates the previous SCD, completed in 2016, and assesses emerging challenges arising from the COVID-19 pandemic and increasing climate change risks. It refreshes the pathways identified in the earlier SCD to reflect underlying structural constraints as well as emerging impediments to development now in the foreground; the pathways to development are: (i) increased economic opportunities; (ii) maximizing human capital and its economic returns; and (iii) building more resilient incomes and livelihoods. As the PIC9 SCD Update shows, while each country is unique, there are common challenges across the region. Moreover, development priorities cannot be viewed in isolation - they are largely interconnected, with progress in one area depending on progress in many others.

This report examines the Philippines' progress in poverty reduction and shared prosperity, and identifies priority reforms needed to build a secure, resilient middle class in line with the national vision of Ambisyon Natin 2040, a prosperous, predominantly middle-class society free of poverty by 2040. Drawing on a multi-layered analytical framework, including Family Income and Expenditure Survey (FIES) data, computable general equilibrium (CGE) modeling, microsimulation, and fiscal incidence analysis, the report finds that while the Philippines has achieved meaningful gains in poverty reduction since the Global Financial Crisis, these gains remain fragile. A large share of households live just above the poverty line, and the middle class has stagnated, leaving many families highly exposed to economic, climatic, and price shocks. Three structural weaknesses are identified as central obstacles to sustained progress: inadequate income growth and limited access to productive employment, fragmented and incomplete social protection systems, and uneven delivery of public services, particularly in lagging regions. Persistent human capital deficits, including high stunting rates and poor learning outcomes, further entrench intergenerational poverty. To address these challenges, the report proposes a reform roadmap organized around three interconnected pillars: (1) strengthening the preconditions for productive employment through improved evidence-based policymaking and local government capacity; (2) expanding access to better jobs for the poor and vulnerable, with a focus on women's economic participation, labor market formalization, and overseas Filipino worker (OFW) opportunities; and (3) building household resilience through a more responsive social protection system, stronger agricultural insurance, and structural reforms to reduce the structural drivers of high food prices. The report concludes that sustained, inclusive growth requires coherent policy action across all three pillars, with particular attention to spatial disparities and the needs of the most vulnerable households.

This CPF FY26-FY30 Annex 5, outlines Yemen’s eligibility for the Remaining Engaged in Conflict Allocation (RECA) under IDA21, reflecting its status as a high-risk fragility, conflict, and violence (FCV) setting. Prolonged conflict has led to economic collapse, institutional fragmentation, and severe humanitarian challenges. The annex identifies key FCV drivers, including weakened governance, a dysfunctional social contract, economic decline, resource competition, and external influences, while emphasizing sources of resilience such as local institutions, civil society, and the private sector. It highlights the importance of preserving human capital and core institutions, strengthening delivery platforms, and leveraging partnerships to mitigate risks and support recovery, resilience, and sustainable development outcomes.

Deep divisions between social groups, rooted in long-standing social, economic, and institutional foundations, slow development, weaken institutions, and can unravel years of progress. This paper sets out a framework for strengthening intergroup cohesion in divided societies and offers practical guidance for development teams. It synthesizes findings on five intervention modalities with proven impacts (collaborative contact, intergroup dialogue, perspective taking, mediation training, and edutainment) and guides practitioners on matching each to context. Effects across rigorous evaluations are consistent but modest, pointing to incremental rather than transformative change. Drawing on case studies from Sub-Saharan Africa, the Middle East, and beyond, the framework offers diagnostic tools, illustrative indicators, and operational guidance for embedding cohesion activities into projects and tracking results over time.

This Country Partnership Framework (CPF) FY26-30 for Yemen Annex 1 focuses on preserving human capital and strengthening institutions amid fragility, conflict, and economic collapse. It prioritizes three outcomes: improving nutrition through integrated health, social protection, and climate-resilient WASH services; expanding access to electricity via decentralized and off‑grid solutions linked to livelihoods and essential services; and strengthening agribusiness, fisheries, and financial inclusion to support jobs and food security. The CPF emphasizes adaptive, geographically targeted interventions, leveraging IDA, IFC, and advisory services to address shocks, enhance service delivery, promote resilience, and create sustainable economic opportunities, with a strong focus on women and vulnerable populations.

The Country Partnership Framework (CPF) supporting document presents: intervention logic and results framework; financing and implementation arrangements; World Bank Group (WBG) portfolio snapshot operations portfolio (IDA grants), as of March 9, 2026; Yemen: selected economic indicators; Yemen’s fragility, conflict, and violence (FCV) envelope IDA eligibility; Yemen streamlined country diagnostic 2025; expanding women’s participation in Yemen’s economy and society; and lessons from third-party implementation in Yemen.