Cairo v Debt situation in poorer countries could worsen due to volatile commodity prices and high interest rates, World Bank President David Malpas said Thursday, urging countries to gradually begin monetary consolidation to maintain investor confidence.
By mid-2021, more than half of the world’s poorest countries were “in or at risk of external debt crisis,” Malpas said in a speech from the Sudanese capital, Khartoum, in mid-October ahead of the annual meeting of the World Bank and the International Monetary Fund.
“When the annual suspension of services or the DSSI initiative ends later this year, the financial space of low-income countries that start providing debt services will shrink,” Malpas said, limiting the ability to finance vaccine purchases and other priorities.
Malpas reiterated its call for accelerated cooperation to implement a G20 debt restructuring framework for poor countries, including the private sector, which has so far failed to extend tolerance to sovereign orrow recipients.
“This is a gradual and people-oriented fiscal consolidation, and a restructuring of volatile debt,” Malpas said, adding that countries need to add.
At the same time, countries should try to rebuild their debt repayments when international interest rates are low, while eliminating wasteful spending.
Malpas Covid-1 called for increased development efforts to help rebuild the economy from the pandemic epidemic.
“To make an impact, we need education, nutrition and vaccination programs that reach millions of children. We need digital cash transfer programs that can provide the resources needed by billions of people in the next crisis,” Malpas said.
Malpas, who previously met with Sudanese Prime Minister Abdullah Hamdok, said Sudan was improving as it reconnected with the world economy but the country needed patience to address the deficit and attract investment.
This News Originally From – The Epoch Times