The head of the World Bank on Tuesday warned that the COVID-19 pandemic threatens to push about 60 million people into extreme poverty, wiping out the gains made over the past three years.
The global lending institution is already financing aid programs in 100 countries under its commitment to spend US$160 billion over the next 15 months, World Bank president David Malpass said.
“That’s home to 70 percent of the world’s population. This represents a significant milestone,” Malpass told a conference call.
Photo: Reuters
The bank anticipates a 5 percent contraction in the world economy this year, with severe effects on the poorest countries, Malpass said.
“Our estimate is that up to 60 million people will be pushed into extreme poverty, erasing all the progress made in poverty alleviation in the past three years, and our forecasts indicate a deep recession,” Malpass said.
The World Bank has spent US$5.5 billion to shore up beleaguered health systems, economies and social services in poor countries.
However, Malpass said that the World Bank’s efforts alone were insufficient, urging donor nations to step up bilateral aid to poorer countries to ensure a durable recovery.
Restoring the flow of remittance payments and tourism — key sources of income for developing countries — would be “critical steps in the reopening,” Malpass said.
A year-long moratorium on debt payments by less-developed countries — called for by the G20 in the middle of last month — has gained growing acceptance, he said.
A total of 14 countries have agreed to such a suspension of debt payments, another 23 are expected to request it and 17 were giving it serious consideration, he added.
“That’s a very welcome and very fast response and positive response to the G20 countries’ commitment,” Malpass said.
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