The World Bank president says this situation makes it "imperative" for creditors to reduce the amount of debt held by vulnerable poor countries, beyond the obligation to withhold debt payments.
Washington:
World Bank President David Malpass warned Thursday that the coronavirus pandemic may push up to 100 million people into extreme poverty.
The Washington-based Development Bank until now estimated that 60 million people would fall into severe poverty due to COVID-19, however the new estimate puts the decline from 70 million to one hundred million, and said, "This wide variety should rise" if the epidemic worsens or prolongs.
Malpass said in an interview with Agence France-Presse that this situation makes it "necessary" for creditors to reduce the amount of debt borne by the poor countries at risk, beyond the obligation to suspend debt payments.
The advanced economies of the G20 have already committed to withholding debt payments from the poorest countries until the end of the year, and there is growing support for an extension of that delay until next year.
But Malpass said this would not be enough, because the economic downturn means those countries, which are already struggling to provide a safety net for their citizens, will not be in a better position to handle the payments.
He said that the amount of debt reduction required will depend on the situation in each country, but that the policy is "very rational".
"Therefore, I think that awareness of this matter will gradually become clearer and clearer" especially for the countries most exposed to debt situations. "
The World Bank has committed $ 160 billion to fund 100 countries through June 2021 in an effort to address the urgent emergency, but even so, extreme poverty.
Malpass said the decline was due to a combination of job destruction during the pandemic in addition to supply problems that make access to food more difficult.
"All this contributes to returning people to extreme poverty the longer the economic crisis continues."
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