World Bank concerned about IDA countries’ $44 billion debt service obligations

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The World Bank has urged development partners and governments to make progress on debt reduction and transparency, as it has expressed concern that the debt service expected in 2022 from the countries of the ‘International Development Association (IDA), the world’s poorest countries, is $44 billion. .

The Bank noted that the amount is greater than the combined World Bank and International Monetary Fund (IMF) resources for these countries and will leave developing countries without the fiscal space for education, adaptation to climate and other necessary means.

These are the remarks made by the President of the World Bank Group, David Malpass, to the Development Committee during the Annual Meetings of 2022, in the presence of the Secretary-General of the United Nations, Mr. Antonio Guterres, and the Director-General of the World Trade Organization, Dr. Ngozi Okonjo-Iweala.

Malpass said, “We also need to make progress on debt, debt reduction and transparency. The debt service expected in 2022 for IDA countries, the poorest countries in the world, is $44 billion and that is more than the combined resources of the Bank and the IMF for these countries. This leaves developing countries without the fiscal space for education, climate adaptation and other necessary means.

The International Development Association (IDA) is part of the World Bank that helps the world’s poorest countries.

The head of the World Bank added that “Kristalina and I have proposed several changes on the debt. We advocate together for debt transparency; a status quo for countries requesting Common Framework processing; inclusion of all creditors from the start of the process; a greater role for debtor countries; earlier sharing of debt relief parameters and debt sustainability analyses; and finally, comparable treatment between official bilateral and commercial creditors using a common discount rate. We need a lot more progress on debt.

Another longer-term crisis, which he said should be addressed, as the focus should not just be on immediate needs, is the slowdown in global growth which is weighing on countries, especially developing countries. development.

He pointed out that the long-term outlook is modest at best and could be even slower, as there has been a high concentration of capital around the world, adding to inequality, which needs to be addressed.

Some of the short-term risks that were of concern are food, energy and fertilizers.

Malpass observed that the cycle to 2023 poses a grave danger to the world, noting that “we continue our rapid acceleration of aid by providing $30 billion to address food insecurity.”

He added: “And thirdly, the decline in greenhouse gas emissions throughout 2022. There have been large increases in the export and burning of coal, oil and timber, which is a serious concern for the climate and the world.”

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World Bank concerned about IDA countries’ $44 billion debt service obligations

World Bank concerned about IDA countries’ $44 billion debt service obligations

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