World Bank President David Malpass has announced on Monday that he is preparing a $170 billion aid package over 15 months to help countries cope with multiple crises, including the food and humanitarian crisis caused by the war in Ukraine, AFP reports.
“We are preparing for a continued response, given the multiple crises” around the world, World Bank President David Malpass told reporters as the Spring Meetings kicked off.
He cited in particular food insecurity and the refugee crisis linked to the war in Ukraine. Millions of people, mostly women and children, have fled Ukraine to escape attacks from Russia.
“Over the next few weeks, I plan to discuss with our board of directors a new envelope of approximately $170 billion spread over 15 months to cover the period from April 2022 to June 2023,” a- he specified.
He added that the goal was to “commit some $50 billion of that over the next three months.”
157 billion against Covid-19
This envelope is substantial, he noted, recalling, by way of comparison, that the Board of Directors had approved in 2020 the release of 157 billion dollars to deal with the crisis caused by the pandemic.
President of the World Bank David Malpass also said he was particularly worried about the indebtedness of poor countries.
“We expect the debt crisis to continue to worsen in 2022,” he said, noting that these countries were under “serious financial stress”.
In total, 60% of low-income countries are already in debt distress or at high risk of debt distress.
Restructure debt
Last week, the World Bank President David Malpass once again called for improving the common G20 framework for debt restructuring.
He then suggested “the establishment of a timetable allowing the creditors’ committee to suspend debt service payments and penalty interest by widening eligibility”.
He also recommended involving private creditors early in the restructuring process.
At the start of the Covid-19 pandemic, rich G20 countries offered poor countries a moratorium on debt service payments until the end of 2020 before extending it until the end of 2021.
In parallel with this debt service suspension initiative (DSSI), they had created, in November 2020, a “common framework” intended to restructure, or even cancel the debt of the countries which would request it.
But for now, private creditors, particularly Chinese, are holding back its implementation.