PARIS—The leaders of wealthy nations want private investors to send a flood of capital to poorer countries to lift them out of poverty and bankroll the response to climate change. Instead, those investor funds are drying up.
Rising interest rates and financial stress have choked off finance to the world’s poorest countries, leaving them with debt burdens that are larger than they have been in nearly three decades. The market turmoil and the aftereffects of the global pandemic have pushed these countries deeper into poverty, reversing years of income gains and undermining their transition to cleaner energy, one of the rich world’s top development priorities.