The conflict in the Middle East makes developing countries have to bear the consequences

According to United Nations Development Program (UNDP)Developing countries have been forced to spend hundreds of billions of dollars to protect households from soaring energy costs, leaving less money for schools, hospitals and climate action.

Their new report, Military Escalation in the Middle East: Dampening Global Shockfound that governments have relied on fossil fuel subsidies, price caps and tax cuts to protect families from rising oil prices triggered by instability in the Middle East.

While these measures provide short-term relief, they have major long-term impacts, the agency reported.

UNDP projects global fossil fuel subsidies will increase to $1.1 trillion in 2026, about $410 billion more than in 2025 if oil prices average $88.60 per barrel. In a more severe scenario, with prices reaching $110 a barrel, subsidies could increase to $1.43 trillion.

Development delayed

The report warns that rising energy costs will put pressure on public finances in low- and middle-income countries.

“Money that should be used to build schools, hospitals, and clean energy systems is used simply to keep the economy afloat,” said UNDP Administrator Alexander De Croo.

Many developing countries entered this latest crisis already burdened by rising debt. Nearly half of the world’s poorest countries are in debt distress or at high risk, while interest payments continue to consume a large part of government budgets.

This year, The median developing country spends an estimated 9.5 percent of government revenue on debt repayments, twice as much as a decade ago and the highest level in 25 years.

The UNDP warns that diverting limited public funds to fossil fuel subsidies risks slowing progress towards the age of 17 Sustainable Development Goals (SDGs) while locking countries into more carbon-intensive energy systems.

Call for international support

De Croo said developing countries should not sacrifice long-term development to respond to crises that are beyond their control.

“No country should have to sacrifice their future development to manage a crisis they did not createhe said.

He called for easier access to international financing and faster investment in renewable energy, arguing that expanding green energy would strengthen energy security and reduce vulnerability to future geopolitical shocks.

“This crisis has made one thing clear,” he said. “Energy security and energy transition are no longer separate agendas. They are one unit.”