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