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Cloudburst!

The World Bank (WB) fears that the Coronavirus epidemic could push nearly 100 million people back below the poverty. WB President David R Malpass has warned that the situation could get even worse, if the lesser developed countries would have to start repaying their debts… Speaking at a media conference in Washington DC earlier this week, he urged the Developed Nations to consider this issue seriously. According to Malpass, the poor countries should be relieved of their accrued foreign debt…

David R Malpass

Soon after all the countries announced Lockdown because of COVID-19 pandemic in February, the WB had said in a statement that at least 60 million people, who managed to cross the Below Poverty Line (BPL) after a long struggle, would slip back in the darkness of poverty due to the shutdown of production and the service sector. Since then, the situation has not changed much. Now, the Global Lender has acknowledged that the effects of the pandemic would be even more long-lasting than predicted earlier. As per the estimate presented by the WB chief, the figure of 60 million (people in the BPL category) could touch 70-100 million or even more!

Malpass has informed the press that the poorest countries in the world, naturally, are in worst situation. He said that new agreements with the troubled nations were needed, so that debt repayment would not become a burden to them. The President also said that the WB was seriously considering this particular issue. Meanwhile, Malpass thanked the G-20 nations for suspending the debt repayment from the poor countries for the time being. However, he believes that the suspension of debt repayment shall not resolve the crisis. The poor countries should receive additional support so that they could be able to provide their citizens with social security and basic needs. Malpass revealed that the WB would allocate USD 160 Billion to the 100 poorest countries in June 2021 in order to help them overcome the crisis!

The WB President further warned that as long as public life would remain stagnant as a result of the pandemic, the number of people, falling in the BPL category, would increase. “All of this contributes to pushing people back into extreme poverty the longer the economic crisis persists,” he stressed. WB Chief Economist Carmen Reinhart recently called the economic crisis a ‘Pandemic Depression’. However, Malpass is less concerned with this terminology. He insisted: “We can start calling it a depression. Our focus is on how do we help countries be resilient in working out on the other side.

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