World Bank chief reiterates call for forgiveness of debts of poor countries | Economy News

David Malpas said private banks and investment funds were not doing enough to help countries suffering from the coronavirus.

World Bank President David Malpas said the coronavirus pandemic would provoke a debt crisis in some countries, so investors should be prepared to offer some relief, including debt cancellation.

“It is clear that some countries are unable to repay the loans they have taken.

“It is very important to reduce the amount of debt through restructuring,” Malpas added.

He pointed to similar measures in Latin America and in previous economic crises, such as the “extremely indebted poor countries” initiative for countries with unsustainable debt in the 1990s.

Rich nations have backed the extension of the G20’s Debt Service Suspension Initiative, approved in April to help developing countries recover from the coronavirus epidemic, with 43 of the 73 eligible countries deferring payments of $ 5 billion.

‘Disappointment’

The pandemic warned in August that the pandemic could push 100 million people into extreme poverty. In his latest remarks, he renewed his call for private banks and investment funds to participate.

“These investors are not doing enough and I am disappointed with them. Also, some major Chinese lenders are not participating enough. The impact of the relief measures will be less than that,” the World Bank chief said.

Malpas also warns that the pandemic could lead to another debt crisis, as some developing countries are already reeling under weak growth and economic hardship.

“Huge budget deficits and debt payments are flooding these economies. In addition, the banks there are in trouble because of bad credit,” Malpas said.