The Interview

'Much more is needed', World Bank chief says of Covid-19 debt relief for poor countries

THE INTERVIEW
THE INTERVIEW © FRANCE 24

In an interview with FRANCE 24, David Malpass, the President of the World Bank, discussed the global economic consequences of the Covid-19 pandemic, as well as the debt moratorium for the world's poorest nations agreed to by G20 finance ministers and central bankers on April 15.

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Speaking to FRANCE 24, World Bank President David Malpass welcomed the G20's move to provide temporary debt relief worth around $20 billion to low-income countries, but warned that "much more is needed". 

"For at least several countries, and I think it will end up being several dozen countries, the pause should continue and that becomes a form of debt cancellation. I think that will be needed. Keep in mind that many of the countries simply had too much debt even before the pandemic struck, so that means there needed to be a new thought process on this system. I had complained about it before the pandemic that it was debt piling on debt," Malpass told FRANCE 24's Business Editor Stephen Carroll.

>> Covid-19: G20 endorses temporary debt relief for the poorest countries

On April 15, G20 finance ministers and central bankers agreed to suspend debt service payments for the world's poorest countries for a duration of one year. The initiative will provide around $20 billion of immediate liquidity, which can be used by those countries – whose healthcare systems and infrastructure are already fragile –

to focus on tackling Covid-19.

The World Bank chief also told FRANCE 24 that the deep recession sparked by the Covid-19 pandemic will create "a very difficult situation" in developing countries.

"There will be companies that shut down – to the extent that there are private sector companies – and from the standpoint of government workers, their pay is more difficult for the governments to provide. I think one of the key difficulties – there are multiple: health, education and food, the basics that people and children need – are all going to be under massive pressure," he explained.

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