UPDATE 1-World Bank Malpass Says G20 Must Accelerate Work on Poor Country Debt
(Add details from G20 press release)
By Andrea Shalal
ROME, October 30 (Reuters) – World Bank President David Malpass on Saturday called on the leaders of the Group of 20 rich countries to speed up work on restructuring the debt of low-income countries, including a freeze on payments of debt and compulsory participation of private creditors.
Malpass told G20 leaders meeting in Rome that progress in addressing the debt of the poorest countries has stalled and urgent efforts are needed to restart the process.
G20 leaders pledged to step up efforts to implement the Common Framework on Debt Treatment and underscored the importance of private sector participation, but did not include any language on a new debt freeze. debt, according to the text of their statement, which was seen by Reuters.
Several countries including China – the world’s largest creditor, accounting for 65% of official bilateral debt – have opposed a new freeze on debt service payments.
Malpass, who this month called for adding a freeze on debt service payments to the Common Framework, said developing countries face issues disrupting economic recovery, including the COVID-19 pandemic and the scarcity of vaccines, as well as inflation, energy shortages and a breakdown in the supply chain.
“The multiple problems are causing devastating setbacks in development,” said Malpass, citing rising poverty rates and growing fragility in dozens of countries, including Sudan, even as the debt of low-income countries has increased. increased by 12% during the pandemic, reducing their ability to invest. in anything else.
âProgress on debt has stalled,â Malpass said. “I urge you to explicitly accelerate the implementation of the Common Framework, to call for transparency and debt reconciliation, and to demand the participation of private creditors.”
Malpass said International Monetary Fund chief Kristalina Georgieva also supports a standstill on debt payment, but further action is also needed to balance the legal relationship between sovereign creditors and debtors.
(Reporting by Andrea Shalal, additional reporting by Jan Strupczewski; editing by Gavin Jones and Will Dunham)