• Sat. May 14th, 2022

No free ride: World Bank urges all creditors to support debt relief | Business and Economy

The President of the World Bank said that commercial creditors could not “take advantage” of the suspension of debt payments by bilateral creditors.

Trade creditors must support debt relief for the poorest countries and cannot simply “turn freely” on a suspension of debt payments by official bilateral creditors, World Bank President said on Friday. , David Malpass.

Malpass told the World Bank’s Development Committee that the debt relief initiative agreed this week by the Group of 20 (G20) economies and the Paris Club was a “huge achievement” to help lesser countries. poorer to cope with the health and economic impact of the new coronavirus. pandemic.

Malpass said the World Bank would look for ways to further expand its support to the poorest countries, but warned that it was essential to protect the financial capacity, credit rating and low cost of finance offered by ARMs. loan from the bank.

He said the COVID-19 pandemic, the respiratory disease caused by the novel coronavirus, had triggered a global recession that would be deeper than that seen during the global financial crisis of 2008-2009, and which would hit the poorest and most the most vulnerable. most difficult countries.

More than 2.14 million people in more than 210 countries and territories have been infected with the novel coronavirus worldwide, and 143,744 have died, according to a Reuters tally.

Malpass said the World Bank is funding and implementing pandemic response programs in 64 developing countries, with the number expected to rise to 100 by the end of April. The Bank was able to provide $ 160 billion in financing over the next 15 months, of which around $ 50 billion went to the poorest countries or eligible for assistance from the International Development Association (IDA).

But more work and resources would be needed, he said.

“Clearly this will not be enough. If we don’t act quickly to build systems and resilience, the development gains of recent years can easily be lost, ”Malpass told the committee, which was meeting by video conference early Friday.

Debt relief will be a big topic of the meeting.

China on Thursday urged the World Bank to allow its poorest borrowers to put their debt payments on hold as they grapple with the coronavirus pandemic, saying the world’s largest multilateral development bank should “give it away. ‘example “.

World Bank officials fear that the suspension of debt payments could undermine the excellent credit ratings currently held by the bank’s IDA bonds and other instruments.

Nigerian Finance Minister Zainab Ahmed also praised the G20 debt relief deal, but urged the World Bank and other multilateral institutions to find ways to participate.

She said middle-income countries facing debt problems also needed urgent assistance and supported African leaders’ call for $ 100 billion in aid to the continent to deal with the crisis. pandemic, including $ 44 billion for immediate debt relief.

Malpass said Africa was a big concern for the Bank, and that she would create a new vice president post in July to focus on sub-Saharan Africa.

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