World Bank proposes debt cancellation to help poorest countries
(VOVWORLD) - The COVID-19 pandemic could trigger a debt crisis in some countries, so investors must be ready for granting some form of relief that could also include debt cancellation, World Bank President David Malpass said on Sunday.
 Residents in Abidjan, Cote d'Ivoire, wear masks to prevent coronavirus transmission. (Photo: AFP/VNA) |
Malpass told Germany’s Handelsblatt business daily in an interview that it is evident that some countries are unable to repay the debt they have taken on. He pointed to similar steps in previous financial crises such as in Latin America and the so-called HIPC initiative for highly indebted countries in the 1990s.
Rich countries last month backed an extension of the G20’s Debt Service Suspension Initiative (DSSI) to help developing nations survive the coronavirus pandemic, which has seen 43 of a potential 73 eligible countries defer 5 billion USD in “official sector” debt payments.
Amid warnings that the pandemic could push 100 million people into extreme poverty, Malpass renewed his call for private banks and investment funds to get involved too.