The World Bank plans to give $50 billion concessional credit to the poorest and most fragile countries and people by next year.
World Bank Group President David Malpass made this known at the G20 Finance Ministers and Central Bank Governors Meeting at the just-concluded IMF/World Bank virtual yearly meetings in United States.
He said the facility would enable the beneficiary countries meet the needs of the their citizens.
He said the bank’s economic and poverty data showed that desperate inequality was being caused by the COVID-19 pandemic and economic shutdowns.
He said: “The recession in advanced economies is less severe than had been feared, but in most developing economies, it has become a depression, especially for the poorest. Extreme poverty may rise by 150 million by 2021.”
Malpass said in March that the G20 endorsed a vital debt relief programme for the poorest countries, giving people a ray of hope. The DSSI helped increase fiscal resources for over 40 countries and created more transparency on the overwhelming debt burden. This week, the bank also published more granular data on debtors and creditors, which will help identify problems and work toward sustainability.
However, some core DSSI-related problems were still unresolved, notably a lack of participation by private creditors and incomplete participation by some official bilateral creditors.
Malpass said the tendency in past debt crises is for countries in debt distress to go through a series of ineffective debt res-chedulings that leaves them weaker. Creditors may eventually allow them to get to a debt reduction process, but at a tremendous cost to the poor. We need to work better and faster this time.
H e said that given the urgency of the debt crisis, the IMF and World Bank have proposed that they undertake a joint action plan on debt reduction for the most indebted International Development Association (IDA) countries.
“Our Board approved a package of up to $12 billion to expand our fast-track COVID response for the purchase and distribution of COVID-19 vaccines, tests and treatments.
