AI-Driven Financial Solutions for Climate Resilience and Geopolitical Risk Mitigation in Low- and Middle-Income Countries

Climate change disproportionately threatens low- and middle-income countries, yet integrated assessments combining socio-economic fragility with physical hazards remain limited. This study quantifies multi-dimensional climate vulnerability and derives optimized adaptation policies for six representative nations (Bangladesh, Colombia, Kenya, Morocco, Pakistan, Vietnam) by fusing socio-economic indicators with climate risk data (2000–2024). A computational framework integrating unsupervised learning, dimensionality reduction, and predictive modeling was employed. Principal Component Analysis synthesized eight indicators into a Compound Vulnerability Score (CVS), while K-Means and DBSCAN identified distinct vulnerability regimes. XGBoost quantified driver importance, and Graph Neural Networks captured systemic interconnections. XGBoost identified projected drought risk (31.2%), precipitation change (18.1%), and poverty headcount (14.3%) as primary drivers. Graph networks demonstrated significant risk amplification in African nations (Morocco SRS: 0.728–0.874; Kenya SRS: 0.504–0.641) versus damping in Asian countries. A Reinforcement Learning (RL) agent was trained using Deep Q-Networks with experience replay to optimize intervention portfolios under budget constraints. The RL policy achieved a 23% reduction in systemic risk compared to uniform allocation baselines, generating context-specific priorities: drought management for Morocco (score 50) and Pakistan (40); poverty alleviation for Kenya (40); coastal protection for Bangladesh (40); agricultural resilience for Vietnam (35); and institutional capacity building for Colombia (50). In conclusion, socio-economic fragility non-linearly amplifies climate hazards, with poverty and drought risk constituting critical vulnerability multipliers. The AI-driven framework demonstrates that targeted interventions in high-sensitivity systems maximize systemic risk reduction. This integrated approach provides a replicable, evidence-based foundation for strategic adaptation finance allocation in an increasingly uncertain climate future.