The Development Committee of World Bank and Fund shareholders raised calls on Friday for finding case-by-case solutions. This is to ease debt burdens on middle-income countries hit by the novel coronavirus pandemic.
The committee urged the Bank to explore suspension of debt payments for the world’s poorest countries.
World Bank Group President; David Malpass said the global recession would be deeper than the one seen during the global financial crisis of 2008-2009. It would also hit the poorest and most vulnerable countries the hardest.
He further urged private creditors to support Wednesday’s agreement by the G20 major economies and the Paris Club; to suspend bilateral official debt service payments for the world’s poorest countries through year-end.
Malpass noted that the World Bank was financing and implementing pandemic response programs in 64 developing countries; with the number to grow to 100 by the end of April.
The Bank was able to provide $160bn of financing over the next 15 months; with some $50bn earmarked for the poorest countries, or those eligible for International Development Association (IDA) aid.
“It’s clear that it won’t be enough. If we don’t move quickly to strengthen systems as well as resilience, the development gains of recent years can easily be lost,” Mal pass told the committee, Reuters reported.
Meanwhile, United Nations Secretary-General Antonio Guterres, in separate remarks, also urged creditors to grant a debt standstill for all developing countries, not just the poorest, warning that many faced debt distress due to a major global recession caused by the pandemic.