Developed countries should try harder to reduce the debt of poor countries, according to World Bank President David Malpasse. And they should also involve the private sector in that effort.
David Malpass said the coronavirus pandemic had exacerbated the already record debt burden of many poor countries even further. According to him, adequate measures must be taken in order to free up financial resources to these countries, in particular, finance health, education and, above all, food security. At the same time, developed nations should help those less developed more significantly with the fight against climate change.
“History tells us that countries that cannot find a way out of their debts are not growing, and are thus unable to achieve the significant reduction in poverty that plague their populations,” he said Malpass during his online speech at the London School of Economics.
According to him, the G20 countries should start seriously addressing the problem, creating an incentive for private creditors to also get involved in reducing the debts of poor countries. “States must strongly encourage the private sector to participate in solving the problem to the greatest extent possible,” added Malpass, saying private creditors must assume a greater degree of debt liability poor countries.
