Washington, Mar 25: The World Bank Group (WBG) and the International Monetary Fund (IMF) on Wednesday jointly called on the Group of Twenty (G20) nations to offer debt relief for the poorest countries to help them tackle challenges posed by the COVID-19 pandemic.
The two institutions called on official bilateral creditors to immediately suspend debt payments from International Development Association (IDA) countries, if requested. Those nations, home to a quarter of the world’s population and two-thirds of the world’s population living in extreme poverty, will be hardest hit by the pandemic, they said.
The coronavirus outbreak is “likely to have severe economic and social consequences” for the poorest countries, which draw on the World Bank’s International Development Association (IDA), according to the New York Times.
“With immediate effect — and consistent with national laws of the creditor countries — the World Bank Group and the International Monetary Fund call on all official bilateral creditors to suspend debt payments from IDA countries that request forbearance,” the statement read.
“This will help with IDA countries’ with immediate liquidity needs to tackle the challenges posed by the coronavirus outbreak and allow time for an assessment of the impact of the crisis and financing needs for each country,” the statement read. Most of the 76 countries receiving IDA support have gross national income per capita of below $1,175, a threshold that is updated annually.
G20 leaders are due to hold a virtual summit on Thursday to discuss an action plan to deal with the worsening pandemic. (UNI)
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