(Adds Malpass citation, description)
Cairo, Sep 30 (Businesshala) – Volatile commodity prices and high interest rates could worsen debt conditions for poor countries, World Bank President David Malpass said on Thursday, calling on countries to maintain investor confidence. Urged for gradual fiscal consolidation.
By mid-2021, more than half of the world’s poorest countries “are in, or at risk of, an external debt crisis,” Malpas said in a speech in the Sudanese capital Khartoum ahead of the annual meetings of the World Bank and the International Monetary Fund. mid October.
“When the Debt Service Suspension or DSSI initiative ends later this year, low-income countries that resume debt service payments will have a narrower financial space,” Malpass said in a statement to finance vaccine purchases and other priorities. limiting his ability to do so.
Malpass reiterated his call for prompt cooperation to implement the G20 debt restructuring framework for poor countries, including the private sector, which has so far failed to increase tolerance to sovereign borrowers.
“It is time to pursue a gradual and people-oriented fiscal consolidation and restructuring volatile debt,” Malpass said.
At the same time, countries should try to redefine their debt payments while keeping international interest rates low, while eliminating extravagance.
Malpass also called for ramping up development efforts to help rebuild economies from the COVID-19 pandemic.
“To make an impact, we need education, nutrition and immunization programs that reach millions of children. We need digital cash transfer programs that can provide essential resources to billions of people in the next crisis,” Malpass said.
“In response to climate change, we need thousands of large public-private projects that connect the world’s resources from governments, MDB (Multilateral Development Bank) foundations, private investors and buyers of carbon credits.”
Malpas, who met earlier with Sudan’s Prime Minister Abdullah Hamdok, said Sudan was progressing as it reconnects with the global economy but patience is needed as the country seeks to tackle the shortfall and attract investment. (Reporting by David Lauder and Aidan Lewis; Editing by Alison Williams and David Evans)